Costs judiciary continue to send clear message on mediation

feeThe implications of ignoring invitations to mediation when engaged in costs proceedings have been further confirmed in Master Simons decision in Bristow v Princess Alexander NHS Trust & Ors.

This follows Master O’Hare’s decision in Reid v Buckinghamshire Healthcare NHS Trust [2015] EWHC B21 (Costs) which we reported last December, which was the first instance where a losing party was penalised by their refusal to attend mediation.

The costs judiciary are sending a clear message that when a party receives an invitation to mediate in costs proceedings for detailed assessment, regardless of whether they are the unsuccessful paying party or the successful receiving party, careful consideration should be given before refusing or ignoring the offer; where refusal is unreasonable, parties will face sanctions.

In Bristow, the Defendants argued that they did not enter into the mediation because the parties were so far apart.

Master Simons was of the view that this was an unreasonable refusal to mediate, that the case could have reached settlement through mediation and stated:

“The parties should be encouraged to enter into mediation and if one party fails to enter into a mediation and that failure is unreasonable then there should be a sanction”.

“It took three months for them [the Defendants] to reject and they gave no good reason other than the fact that the case had already been set down for a detailed assessment”.

“I think that the correct sanction is that the claimant should receive their costs on an indemnity basis on their 80 per cent costs as a sanction for the defendants’ failing to engage in mediation”.

Hannah Rawlins, Registrar of Costs ADR gave the following guidance to practitioners:

“It is clear that mediation is becoming increasingly important in costs proceedings and parties should seriously consider if they refuse to mediate, whether that is conduct that is reasonable. To date, we have not seen a “reasonable refusal” in the the courts in costs proceedings and it is in the interests of all parties to consider carefully how the courts will react should a reasonable offer to mediate be refused. The judgement from Master O’Hare previously and now Master Simons provides a clear direction that mediation is being endorsed and that if invitations to mediate are addressed late, ignored, or refused altogether, sanctions will be imposed by the court on the offending party”.

What are your experiences? Have you encountered any indication of a "reasonable refusal"?

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