Sanctions for not mediating?

This from John Webb:

I was reading an interesting piece in Lexology about mediation and the Civil Proceedings Rules (well it was raining a lot). The piece, produced by Donald Lambert and Nicole Finlayson of Pennington Manches Cooper, gives a very succinct summary of the place of mediation in the civil justice system. I was drawn in particular to this section on sanctions for failure to mediate:

“Sanctions for failure to mediate

Are there any sanctions if a party to a dispute proposes mediation and the other ignores the proposal, refuses to mediate or frustrates the mediation process?

If a party refuses to mediate, ignores a request to mediate or otherwise acts in a way to frustrate the mediation process, they risk sanctions in the form of an adverse costs order being made against them, which could potentially be substantial. Under CPR 44.2, the court has discretion as to whether costs are payable by one party to another, in what amount and when. In deciding how to exercise that discretion, the court will consider (among other things) the parties’ conduct, including in relation to mediation.

The default position in English litigation is that costs follow the event (ie, the losing party pays the winning party’s legal costs). Nonetheless, that position can be departed from. In Halsey v Milton Keynes General NHS Trust ([2004] (EWCA Civ 576)) the question before the court was whether it should use its discretion under CPR 44.2 to impose a costs sanction against the winning party on the grounds that it had refused to mediate. It was held that the court has the power to deprive a winning party of some or all of their costs on this basis, but the burden is on the losing party to demonstrate that the normal rule should be departed from. To justify such a departure, it must be shown that the winning party acted unreasonably in refusing mediation (or ADR generally), by reference to considerations set out in that case.

Thakkar v Patel ([2017] (EWCA Civ 117)) is an example of a party frustrating the mediation process. The claimant attempted to arrange a mediation, but the defendants procrastinated and delayed for so long that the claimant lost faith in the process. This was found to be unreasonable behaviour on the part of the defendant, and a substantial costs order was made against them.”

Of course we all recognise that a primary strength of mediation is its voluntary nature which tends to bring about collaboration in place of conflict, but it is worth noting that the courts are increasingly seeing mediation at an appropriate alternative to use of court time to resolve disputes – and taking costs away from unreasonable ‘winners’ where mediation could and should have been used.

You can read the full article here: UK Mediation sanctions