The recent Court of Appeal decision in Thakkar and another v Patel and another  EWCA Civ 117 has re-established the Court’s encouragement towards the use of mediation. The Court awarded a costs sanction against the Defendant for ‘dragging its feet’ in the parties’ attempts to mediate.
So what is the Court’s approach to mediation and what is expected of parties in Court proceedings?
In brief, mediation is a way of resolving a dispute without the Court’s involvement. It involves an independent third party (a mediator), who aims to help the parties come to an agreement. It can be used in all types of disputes: from personal injury to professional negligence; property disputes to contract claims. Mediation can be attempted before Court proceedings have been issued, or once the Court process has started. We will look here in more detail at the Court’s involvement in mediation.
The overriding objective
One of the Court’s key objectives is for active case management and the encouragement of alternative dispute resolution (known as ADR). Mediation is a form of ADR. This applies whether you are involved in a small claims matter or more complex proceedings,
It is the parties’ duty in proceedings to assist the Court with this objective and they are encouraged from an early stage to settle the claim and negotiate. The Court process is designed to give parties the opportunity to consider ADR. The Court requires confirmation relatively early into the proceedings of what steps are being taken to attempt this and reasons if no attempt has been made. The idea is that mediation can reduce costs and delays for all parties involved. It can also provide the parties with more creative ways of settling a dispute than the Court.
For small claims matters, there is a free mediation service to which the Court will refer the parties should they indicate that they are willing to enter into mediation.
Mediation may not be appropriate in all circumstances especially if one party is at a particular disadvantage to another. As a general rule, however, it will only be appropriate to refuse to mediate if you can show good reason. For example: the mediation would not have reasonable prospects of success; would be disproportionately expensive; or the parties have unsuccessfully attempted other types of ADR.
The Court’s powers
Should the parties not mediate where the Court thinks it would have been appropriate to do so, it may impose a stay on proceedings until the parties have attempted mediation. It also has a wide discretion in relation to costs orders for the case. For example, where the Court feels that the winning party acted unreasonably in refusing to mediate prior to trial, it may order that the losing party pays a lower proportion of the winning party’s costs than had the winning party attempted mediation. The Court will consider the appropriateness of mediation, the conduct of parties and the attempts to settle prior to the proceedings in making a costs order.
Although the Court has wide powers and discretion, it does not have the power to force parties to mediate; to do so would be contrary to a person’s rights under the European Convention of Human Rights. The Court’s aim is to simply encourage.
Overall, the decision to mediate should be taken seriously as the Court will certainly look at this when making a decision on costs.
If you are involved in a dispute and would like some advice regarding mediation, contact our dispute resolution team today on 0800 988 7756 and arrange a free consultation.