Mediation is an alternative method of resolving disputes, where the parties involved agree to appoint a third party, whose role is to assist them in coming to a settlement.
While mediation is not compulsory, the Court have encouraged the use of the same, particularly if the costs involved are considerably less than taking a matter all the way through the Court system. In order to encourage the parties to mediate, they have made it quite clear that if a party refuses to mediate, and they do not have a good reason to do so, then even if they succeed in the case, at trial, then they will not be entitled to recover the costs either in part or in full. In a recent case, where one party refused to mediate for “commercial reasons”, although those reasons were never stated. The Court, when refusing to make a costs order in that case, gave some guidance as to what factors would influence their decision either way namely:
• The party refusing mediation must have strong grounds.
• Strong grounds do not include that the matter cannot be easily mediated.
• That it can be a good ground to refuse to mediate if you believe you have a strong case. However, if you feel that your case is strong enough, then you would normally be expected to apply to the Court for an early determination of the matter by way of Summary Judgment Application. If you don’t then the Court will probably take the view that you obviously didn’t believe the case was as strong as you say.
• It is reasonable to refuse to mediate if sensible and realistic offers have already been made and have been rejected.
• It is not good grounds to allege that the parties are so far apart that mediation will not be effective. The whole point of mediation is to bring parties closer together.
• Refusing to mediate because of the additional costs that will be incurred is also not good grounds, as the costs of mediation are often less than allowing a matter to go to a fully contested trial.
• The burden of showing that the refusal was reasonable lies on the party refusing to mediate.
• If mediation is attempted but fails then no criticism can be raised by the parties because the whole process is confidential.
In the circumstances, it would only be in exceptional cases that mediation would not be appropriate. The consequences of refusing to do so can result in you succeeding in your claim but being unable to recover your costs either in part or in full.
