Costs reduced for failure to mediate
The High Court has penalised a successful defendant for failing to mediate by awarding it only two-thirds of its costs even though it won.
The defendant did agree to a round table meeting or mediation but then changed its mind because it no longer considered mediation to be an appropriate use of resources. It failed to set out its reasoning further in writing.
The defendant had failed without adequate (or adequately articulated) justification to engage in mediation which had a reasonable prospect of success. The court dismissed the defendant’s argument that it thought that the claimants would only accept a financial offer which the defendant was unlikely to make, therefore ADR was not appropriate. The Judge observed that the defendant failed to allocate sufficient time, attention and resources to dealing with ADR (alternative dispute resolution) in parallel to substantive preparation.
You should take any ADR proposal seriously (even if the other side appears inflexible) and always to set out your position clearly in writing, with reasons.
Contact Keith Hardington on 01756 700200 and [email protected] for advice.