In the UK, refusing to mediate can have serious cost consequences for the party who refuses to participate in the process. The courts have consistently emphasised the importance of mediation in resolving disputes and have been willing to impose cost sanctions on parties who unreasonably refuse to engage in mediation.
One of the most notable cases in this regard is Halsey v Milton Keynes General NHS Trust, which was decided by the Court of Appeal in 2004. In this case, the court held that while parties are not required to mediate, they are expected to seriously consider the option of mediation and actively participate in the process if they choose to use it.
If a party unreasonably refuses to mediate, the court may impose cost sanctions on that party, even if they ultimately win the case. The court will consider a number of factors in determining whether the refusal to mediate was unreasonable, including the nature of the case, the merits of the parties’ positions, and the costs of mediation.
In recent years, there have been several cases where the courts have imposed cost sanctions on parties who have unreasonably refused to mediate. For example, in PGF II SA v OMFS Company 1 Limited, the court ordered the defendant to pay the claimant’s costs in full because they had unreasonably refused to engage in mediation.
In another case, Laporte and another v Commissioner of Police of the Metropolis, the court held that the defendant’s refusal to mediate had caused the claimants to incur additional costs that could have been avoided if the parties had engaged in mediation. The court therefore reduced the amount of costs awarded to the defendant to reflect their unreasonable refusal to mediate.
- Gore v Naheed & Anor [2017] EWCA Civ 369: In this case, the Court of Appeal held that the defendant’s refusal to engage in mediation was unreasonable and awarded the claimant an additional 10% on top of their costs.
- Thakkar v Patel & Anor [2017] EWHC 3103 (QB): In this case, the High Court held that the defendant’s refusal to engage in mediation was unreasonable and ordered them to pay an additional £25,000 in costs.
- Wastell v Orange Personal Communications Services Ltd [2007] EWHC 104 (Ch): In this case, the High Court held that the defendant’s refusal to engage in mediation was unreasonable and ordered them to pay the claimant’s costs on an indemnity basis.
These cases demonstrate that the courts in the UK take a dim view of parties who unreasonably refuse to engage in mediation. In each case, the party that refused to mediate was hit with significant cost sanctions. Therefore, it is important for parties to seriously consider mediation as a means of resolving their disputes in order to avoid potentially significant cost consequences.