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Do I Have to Mediate?

If you are involved in litigation, you may well have been advised to consider attempting to resolve the dispute by mediation. The Court rules require parties to consider alternative dispute resolution, such as mediation, and indeed solicitors have a duty to advise their clients about it.

What is mediation?

Broadly, mediation is a negotiation process whereby the parties to a dispute come together with an independent third party (the mediator) to seek a resolution. The process often lasts for a day, and the parties remain apart from each other for much of the time, with the mediator acting as a “go between” with a view to assisting to bridge the gap between the parties’ positions and facilitating a settlement.

There are many benefits to mediation, not least that a settlement this way will often be quicker, and cheaper, than pursuing a case to trial. The process is confidential and the parties have more control over it than the Court process, which is of course at the hands of a Judge. Further, the involvement of a third party is often invaluable in breaking through any deadlock.

However, it is not uncommon for parties to be reluctant to engage in mediation. This might be for tactical or financial reasons, because of the particular personalities involved, because they don’t consider it is the right time or simply because they do not see the point.

Do I have to take part?

Whist there is no absolute obligation on you to propose mediation, we are often asked whether you must agree if it is proposed by your opponent.

The short answer is no. Mediation is an entirely voluntary process, indeed even the Court cannot order you to take part. However you could be faced with costs consequences at the end of the case, regardless of the outcome, if the Judge considers that you “unreasonably” refused to mediate. This means that if you refuse to mediate, even if you go on to win your case, the usual rule that the loser pays the winner’s costs might not be applied.

When faced with a proposal to mediate you should therefore carefully consider your response. Simply ignoring it is generally not a good idea as the Court will usually consider that silence of itself to be unreasonable. There is a lot of case law around the circumstances that might give rise to a “reasonable” and an “unreasonable” refusal to mediate. However the starting point for your considerations should be those set out in the case of Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576, which include:

  1. The nature of the dispute. Alternative dispute resolution is not always appropriate. For example, there might be complex legal issues that require a decision by a Judge, or a party might be seeking an injunction, which requires a Court order.
  2. The merits of the case. If a party reasonably believes it has a very strong case then this might be a reason not to mediate. However, belief in the merit of your case may not be sufficient on its own and the Court would usually look for something more.
  3. Other settlement options. The Court in Halsey noted that mediation often succeeds where previous attempts at settlement have failed.
  4. Costs of mediation. If the costs of a mediation are disproportionately high in comparison to the amount in dispute, then this is a factor to be considered when deciding whether it is appropriate to mediate.
  5. Delay. Timing of the proposed mediation is relevant and particularly whether it would delay the trial.

So, if mediation is proposed, you should carefully consider the position to adopt and ensure that you are able to justify that position, not only to your opponent but to the Court. It will always be fact-sensitive and will depend on the individual circumstances of the case, and it will be up to the party who proposed the mediation to persuade the Court that any refusal was unreasonable.

More positively, there are often very good reasons to mediate and, generally, a request to mediate should not come out of the blue – your solicitor should discuss your ongoing settlement options with you and agree a strategy towards resolution.

We have considerable experience in dealing with mediation, and tactical and strategic decisions, in disputes of all shapes and sizes. If you would like to discuss further please contact Sarah Holland on 0117 959 5438 or sholland@loneystewartholland.co.uk.