Partner Article

To mediate or not to mediate

With Watson Burton LLP Law FirmBusinesses involved in legal disputes are being encouraged to attempt to settle their disputes early using forms of Alternative Dispute Resolution, such as mediation. Encouragement exists both in the form of the significant advantages and successes available through mediation and also the threat of costs sanctions by the courts to parties who refuse. However, mediation is not appropriate in all disputes. Following on from last month’s article on mediation, we now review some recent cases where the High Court held it was not unreasonable for a party to refuse to mediate. 1. The case of Maurice Hickman –v- (1) Blake Lapthorn (2) David Fisher [2006] EWHC 12 (QB) was heard earlier this year: the defendants had acted for the claimant as solicitor and legal counsel in a personal injury action. Both defendants had been found liable to the claimant for damages for negligence and the court was now required to assess the legal costs payable. It was therefore considering the second defendant’s (Fisher’s) refusal to mediate or negotiate prior to the trial. The court held that even though there was a strong possibility a settlement could have been achieved at a sum close to that which the claimant was actually awarded at court, Fisher’s refusal to mediate or negotiate was not unreasonable. There had been a significant difference between the views of the claimant and of Fisher as to the value of the claim. It was not demonstrated to the court that Fisher’s view of his prospects at trial was unreasonable. Thus, no costs sanction was made against Fisher. 2. In another recently reported case, Wethered Estate Limited –v- Davis [2006] BLR 86 Ch.Div., the claimant was held not to have been unreasonable to refuse mediation prior to trial. In this case, the dispute between the parties had concerned the parking of a vehicle by the defendants on the claimant’s property. The claimant had first refused mediation because the vehicle remained on the land and later refused mediation until each party had clarified the issues in dispute. The dispute here involved interpretation of an agreement against a disputed set of facts. The court held that in this situation, refusal to mediate had not been unreasonable. Costs issues were determined in the claimant’s favour. In conclusion, whilst the courts are keen to encourage mediation by imposing cost sanctions on parties who have unreasonably refused to mediate, mediation is not always appropriate and, in such cases, the courts will not penalise parties who refuse. If you have any queries relating to this article please contact Catherine Chipchase of Watson Burton LLP (catherine.chipchase@watsonburton.com or 0191 244 4356).

This was posted in Bdaily's Members' News section by Ruth Mitchell .