The Civil Procedure Rules set out litigation should always be a last resort and disputing parties should try to aim to settle the dispute outside of Court. If proceedings are commenced, parties are encouraged to avoid this progressing to a final hearing. Engaging in mediation helps to reduce legal costs for both parties.  

Case law demonstrates the need for parities to remain flexible in litigation and be prepared to negotiate. This is especially in view of the Covid-19 pandemic when judicial resources are being substantially stretched.  

In the recent case of Wales v CBRE Managed Services Ltd [2020] EWHC 1050 the court ordered costs sanction against the successful party as a consequence of the unreasonable refusal to mediate. Litigants could expect a diminution in their costs of as much as 50%.   

What constitutes an unreasonable failure to mediate?  

The Court of Appeal have shed some light on factors that may be relevant in determining if a party have unreasonably refused Alternative Dispute Resolution (ADR): 

• The nature of the dispute – Will not apply where injunctive relief necessary.   

• If other settlement methods have been attempted – mediation often succeeds whether other attempts at settlement have failed. 

• Costs of mediation would be disproportionately high   

• Whether there is reasonable prospect of success – this must be viewed objectively.  

• Delay – the mediation would delay the trial taking place.  

Whether or not you believe you have a strong enough case to succeed at trial, it is recommended you participate in engaging in mediation as this demonstrates your commitment to resolving the matter outside of court.  

If you are involved in a dispute and require advice, please contact our offices on 0113 266 0735.