Mediation is an alternative method of resolving disputes and involves an independent third party helping to negotiate a settlement.  It’s a process that the courts are eager to encourage, as Peter Allen explains.

In the past the courts have, on occasions, held that parties who refuse to go to mediation may be punished in costs.  In a recent case a party made an offer to settle the claim against it; that offer was not accepted by the claimant, who sought to arrange mediation instead.  The defendant delayed so long that the claimant lost confidence in the process and decided not to pursue the mediation after all. 

The matter went to trial and the claimant was awarded less than the sum that had originally been offered by the defendant in settlement.  Normally, this would have led to the claimant having to pay the costs that the defendant had incurred after the offer was made.  However, the judge said that had mediation occurred there would have been a real chance of settlement and the vast majority of the parties’ costs would have been saved.  The judge therefore ordered that the defendant pay 75% of the claimant’s costs.

The Court of Appeal upheld this order. 

Although it was tough on the defendant, the court said that parties should not unreasonably refuse to refer a dispute to mediation, and should not drag their heels in setting up a mediation.  If they do, then costs sanctions may be merited.

This is a further warning to parties to seriously consider mediation to resolve a dispute.  If you won’t go to mediation you may not receive your costs, even if you are successful!

For further advice on how mediation works and how it can, in many cases, successfully resolve disputes, please contact Peter Allen.  Peter is an Alternative Dispute Resolution Group accredited mediator with many years’ experience of litigation in the construction sector and can be reached at our Chelmsford Office on  01245 453813 or email peter.allen@birkettlong.co.uk.