Refuse to mediate? Don’t be surprised by the consequences!

Refuse to mediate? Don’t be surprised by the consequences!

Unless you have been living in a distant galaxy and have only just arrived on planet Earth you will know that there is a long history of reported cases in which parties, who have refused to engage in mediation without a very good reason indeed, have been routinely punished by the courts when it comes to dealing with costs. To be clear, having a very strong belief in the merits of your case is simply not a good enough reason to refuse to mediate.
 

The latest example of the courts coming down hard on parties reluctant to mediate is a case known as Rochford v Rochford [2020]. Although this case is currently unreported it is now routinely quoted by lawyers and clients attempting to persuade reluctant parties, who are refusing to mediate, to think again.

The case dealt with a disputed Will which, according to the Claimant sister, failed to make sufficient financial provision for her in her late father’s will. The Defendant sister, who was by far the biggest beneficiary of the Late Mr Rochford, didn’t agree and you can guess what happened next.

Very early on in the court proceedings the Claimant sister offered to mediate with her Defendant sister. That offer was refused because, it was argued, the claim was hopeless and insufficient financial disclosure had been made by the Claimant sister to allow a reasonable assessment of the case to be made in any event.

Following a trial which lasted two days in January 2021, the Claimant sister was awarded a sum in addition to the provision set out in her father’s will and, in doing so, beat a Part 36 offer that had been made by the Defendant sister earlier on in the proceedings. What is notable about this case is how the judge dealt with costs, ordering:

A) The Claimant sister’s costs were to be reimbursed by the Defendant sister on an indemnity basis.

B) The Defendant sister was to pay the Claimant sister an additional 10% on top of the award.

C) Interest would be paid by the Defendant sister at the rate of 5%.

D) There was to be an interim payment of £60,000 by the Defendant sister in respect of the Claimant sister’s costs which would be assessed by the court if not subsequently agreed.

It is pretty clear that the presiding judge was far from happy with the conduct of the Defendant sister who did, in the judge’s view, have sufficient information to settle the case long before it got to trial and whose refusal to mediate was deemed as unreasonable conduct which needed to be treated accordingly when dealing with party costs.

The Rochford cost decision is yet another judgement in a long line of cases which should serve to warn Parties about the risks of refusing to try and settle at an early stage in the court proceedings. The bottom line is that if you refuse to mediate you should expect tough treatment by the court when it comes to dealing with the recovery of inter-party costs.

It really does not matter how good you think your case is. If you refuse a reasonable offer to mediate then you should expect to be on the end of severe cost sanctions as a consequence.

 

Peter Vinden is a practising Arbitrator, Adjudicator, Mediator and Expert. He is Chief Executive of Gateley Vinden and can be contacted by email at peter.vinden@gateleyvinden.com

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