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Refusing Mediation Will 'Cost'

13/07/2012

The High Court has given yet a further warning to litigants who refuse to attend mediation during the course of a claim.

In the case of PGFII SA v OMFS Co; Bank of Scotland [2012] EWHC 83 (TCC) the Defendant made a Part 36 offer on the same day that the Claimant made a Part 36 Offer and invited the Defendant to attend a mediation. The Defendant was silent in response to the offer of mediation. Two months later, the claimant again raised the issue of mediation but the Defendant, again, did not reply.

A day before the trial, the Claimant accepted Defendant’s Part 36 offer.

Ordinarily in this scenario under CPR Part 36, the Claimant (the offeree) would be entitled to its costs up to the expiry date of the Defendant’s offer (May 2011) but liable to pay the Defendant’s costs (the Offeror) from the expiry date up to the date of acceptance of the offer (May 2011 to January 2012).

The Judge held that the Defendant had been unreasonable in refusing to mediate and disallowed the Defendant’s costs; some 8 months’ worth of legal costs.

Litigation Solicitor Stephen McArdle comments: “this case highlights yet again the importance of litigating parties to properly consider the settlement of disputes and claims where it is reasonable to do so; including mediation. The courts will exercise their discretion and make adverse costs orders where a party unreasonably refuses to mediate, even if that party has won at trial”.

KBL has an experienced dispute resolution team who can assist with mediation. For more information, please contact Stephen McArdle