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Appeal court judge outlines hesitation at penalising parties who shun mediation

Court: parties should be allowed their day in court

Litigants who shun mediation because they want their day in court should not be penalised for their conduct, a Court of Appeal judge has suggested.

The comments by Lord Justice Patten – which he made clear were his personal view – fly in the face of the generally harder line taken in recent times by the senior courts in imposing costs sanctions on those who unreasonably refuse to mediate.

Patten LJ was ruling in Gore v Naheed & Anor [2017] EWCA Civ 369 [1], brought by the claimant over an alleged obstruction of a right of way.

The claimant was the overall winner and was awarded his costs. The defendants argued at first instance and on appeal that the judge should have made some allowance in their favour for the fact that Mr Gore refused to or failed to engage with their proposal that the dispute should be referred to mediation.

They referred the judge to the 2013 case of PGF II [2], in which Lord Justice Briggs sent out a stark warning to parties which fail to engage with a “serious invitation” to take part in ADR.

Patten LJ said: “Briggs LJ emphasised the need, as he saw it, for the courts to encourage parties to embark on ADR in appropriate cases and said that silence in the face of an invitation to participate in ADR should, as a general rule, be treated as unreasonable regardless of whether a refusal to mediate might in the circumstances have been justified.

“Speaking for myself, I have some difficulty in accepting that the desire of a party to have his rights determined by a court of law in preference to mediation can be said to be unreasonable conduct particularly when, as here, those rights are ultimately vindicated.

“But, as Briggs LJ makes clear in his judgment, a failure to engage, even if unreasonable, does not automatically result in a costs penalty. It is simply a factor to be taken into account by the judge when exercising his costs discretion.”

The judge concluded that here the judge did take it into account but concluded that it was not unreasonable for Mr Gore to have declined to mediate.

“His solicitor considered that mediation had no realistic prospect of succeeding and would only add to the costs. The judge said that he considered that the case raised quite complex questions of law which made it unsuitable for mediation. His refusal to make an allowance on these grounds cannot in my view be said to be wrong in principle.”

Earlier this year, however, in Thakkar & Anr v Patel & Anr [2017] EWCA Civ 117, Lord Justice Jackson said: “The message which the court sends out in this case is that in a case where bilateral negotiations fail but mediation is obviously appropriate, it behoves both parties to get on with it.

“If one party frustrates the process by delaying and dragging its feet for no good reason, that will merit a costs sanction.”

As a result, he upheld an order that the defendants pay 75% of the claimants’ costs in a case where both parties achieved a measure of success at trial but the original judge had felt it could have settled through mediation much earlier.

“The costs sanction was severe, but not so severe that this court should intervene,” said Jackson LJ.