Do the courts expect parties to use remote mediations? Can a party be criticised (and potentially penalised on costs) for refusing to engage in a remote mediation?

Do the courts expect parties to use remote mediations? Can a party be criticised (and potentially penalised on costs) for refusing to engage in a remote mediation?

Produced in partnership with Henrietta Jackson-Stops, mediator of IPOS Mediation

This question is difficult to answer as it has yet to come before the court and, as all litigators know, exactly what a court is going to do is difficult to predict! However, recent case law indicates that the courts are, perhaps, becoming tougher on parties who unreasonably refuse to try alternative dispute resolution (ADR)—see, eg the recent case of Wales (t/a Selective Investment Services) v CBRE Managed Services where the successful defendant was deprived of a substantial proportion of its costs on the basis of an unreasonable refusal to mediate. This decision follows closely behind those in DSN v Blackpool FC (see News Analysis: Indemnity costs under Part 36 and extended for refusing to engage in ADR (DSN v Blackpool Football Club)) and BXB v Watch Tower where the claimants successfully sought indemnity costs on the basis that the defendants had both refused to mediate.

Even before coronavirus (COVID-19) ‘lockdown’, the pressures on the court system and its administration, shortage of judges and pressure for witnesses were being cited as reasons to encourage more mediation. With the increased backlog in the courts, that pressure is now only going to be worse. In addition, the courts themselves have adapted to remote working and have continued hearings, albeit by video. In Re Blackfriars, the court refused the adjournment of a five week trial due to start in June 2020 on the basis that the parties should explore how to hold the hearing remotely (see News Analysis: Business as usual? High Court to hear five-week trial remotely in light of the coronavirus (COVID-19) pandemic (Re One Blackfriars Ltd)) and the continuing guidance from the Lord Chief Justice is that as many hearings as possible should be online. In such circumstances, where courts are successfully hearing online trials (which often involve many more moving parts than mediations) it may be considered that the courts will have little sympathy for the party who, without better explanation, simply relies on the inability to meet face-to-face as a reason for not having attempted ADR. Of course, there will be circumstances where remote mediation is not appropriate—for example, where accessibility to the appropriate technology is difficult—but arugably such circumstances will be limited. As with face-to-face mediation, even if settlement is not achieved, there is much that can be gained from hearing from the other side, exploring the issues further and having the opportunity to test one’s case—all of which can be done in a without prejudice online environment.

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