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Alternative Dispute Resolution & the costs risks of ignoring/refusing an invite

A recent Court of Appeal case demonstrated its view on mediation, and alternative dispute resolution in general, by placing a costs sanction on a defendant who failed to respond to the claimant’s invitation to resolve the dispute by mediation. This case is an example of the tough stance the courts are taking when dealing with post-Jackson cases and the emphasis the new CPR has placed on avoiding litigation.

In the past it has not been mandatory for parties’ to a dispute to attempt mediation, or any form of alternative dispute resolution (ADR) for that matter, but it has always been encouraged and looked upon favourably by the courts. However, the emphasis now appears to have changed and there appears to be a presumption that parties’ will attempt to resolve the dispute by alternative dispute resolution before it reaches a litigious stage and that a refusal of ADR will not be tolerated by the courts.

The judgment of Lord Justice Briggs related the need for a more proportionate approach to dealing with civil litigation with the current economic climate. The need to cut down on pointless costs and expense was one of the key features of the Jackson reforms and this judgment is a clear example of the overarching principle of the new CPR being applied.

The present case only dealt with a wholesale failure by the defendant to respond to an invitation to mediate from the claimant, not a refusal. It is possible that a refusal will be justified in some cases but it should be made clear at the time why the party does not want to resort to ADR but this won’t necessarily mean the court will not impose a sanction on the refusing party if the court deems it an unreasonable and unjustified. Following this decision, it is clear the best way to handle an invitation to engage in ADR is to fully consider it and engage, or refuse and fully justify the refusal whilst keeping in mind the new reality that sanctions are likely to be imposed by the court when it comes to costs.


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