CoA punishes defendant that refused ADR invitation

Topics: Costs, fees and funding,Courts business

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  • Lord Justice Briggs

The Court of Appeal has thrown its weight behind alternative dispute resolution in another example of tough enforcement of the Jackson reforms.

In PGF II SA v OMFS Company 1 Ltd, Lord Justice Briggs (pictured) said the defendant’s refusal even to respond to the claimant’s invitation to mediation amounted to unreasonable conduct.


The defendant was penalised through a costs sanction upheld by the court.

ADR is one of the key aspects of the post-Jackson world and this case is the first sign that courts will not tolerate parties that refuse it.

Briggs said: ‘In my judgment, the time has now come for this court firmly to endorse the advice given in chapter 11.56 of the ADR Handbook, that silence in the face of an invitation to participate in ADR is, as a general rule, of itself unreasonable, regardless whether an outright refusal, or a refusal to engage in the type of ADR requested, or to do so at the time requested, might have been justified by the identification of reasonable grounds.’

The judgment extends the scope of Halsey v Milton Keynes Gneral NHS Trust (2004), which established that the court should not compel parties to mediate.

Briggs added: ‘The court’s task in encouraging the more proportionate conduct of civil litigation is so important in current economic circumstances that it is appropriate to emphasise that message by a sanction which, even if a little more vigorous than I would have preferred, nonetheless operates pour encourager les autres.’

After the case settled with the claimant’s last-minute acceptance of the defendant’s part 36 offer, the trial judge, Mr Recorder Furst QC, sitting as a deputy judge of the Technology and Construction Court, penalised the refusal to mediate by depriving the defendant of its costs.

Kate Andrews, a partner at Browne Jacobson, who represented the respondent, said: 'This case is of importance to all who embark on litigation. It demonstrates a clear and unequivocal endorsement by the Court of Appeal as to the value of ADR, (including but not limited to mediation) and highlights the fact that a party who refuses to engage in the process of ADR can, and will, face costs sanctions.’



Readers' comments (15)

  • The EWCA is to be congratuilated on following the lead of Sir Henry Brooke, Sir Alan Ward and others and making it plain that what the most litigious country in the world discovered twenty years ago - that mediation makes sense in almost all disputes - should finally cross the Atlantic. It is good to see that the work that the CMC and CJC did in assembling the ADR Handbook has been judicially recognised. A fine day for civil jusitce.

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  • A good decision. It's high time referral between the courts and mediation became normal and expected. The Law only deals with the legal narrative of cases. The conflict drivers of litigation are often non legal. Those aspects of cases need to be dealt with in mediation as a matter of course. When free movement between litigation and mediation becomes normal we will be on our way to a functional DR system that is capable of dealing with all aspects of disputes. It will be faster, more humane and cheaper.

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  • If solicitors had not lost the ability to negotiate, mediation would not be necessary. Lots of cases used to settle through a few letters and a couple of telephone calls. Now, the same result is achieved only after a mediation costing well into five figures.

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  • The fact that the Jackson ADR Handbook runs to 336 pages simply confirms that the expensive system of litigation is being replaced by an expensive system of mediation. It's surprising that nobody seems to recognise that this is scarcely a positive development.

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  • Regrettably, whichever process is applied, litigation or mediation, the crucial element is "the man in the middle". If I had wanted someone with little or no experience in the art of reaching judicial decisions as well as having only a passing understanding of the law, I would have stopped a person in the street.
    It is all well and good the Judiciary refusing litigants access to the judiciary under the myth of "proportionality". - a properly prepared case isn't cheaper the less competent the Tribunal - but it diminishes the access to Justice in a form acceptable to both litigants.

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  • And what of the situation where a Claimant with little or no prospects of succeeding in a claim deliberately and with one eye on costs suggests ADR?

    Is it proportionate or reasonable for the Defendant to have to enter into ADR then?

    Or will the Courts see through a Claimant's tactics in those circumstances?

    Ultimately ADR is not the magic answer to all cases, particularly where liability is severely in dispute and there is to all and intents and purposes nothing to mediate.

    Is a Defendant to mediate each and every case simply because a Claimant's solicitor throws a one-line mention of the same into a letter?

    If so then it is pointless pretending that a Claimant has to prove its case, and we may as well 1) compel the forced settlement of all claims regardless of merit, leading to the increase of ever more speculative claims being put forward and 2) do away with the Court system entirely.

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  • Anonymous 1.56 is absolutely right.

    Woolf and the judiciary in general did not understand that much "litigation" never got near a court-but was settled by the common sense of solicitors.

    A perfect example of intellect not understanding the realities.

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  • Anon of 1:56 and others are not alone in getting this wrong.
    (1) lawyers have not lost the ability to negotiate - transaction lawyers do so all the time. What some litigators appear to have lost is the will. Praise be for the enlightened, who still put the client first.
    (2) Mediation rarely needs to cost 5 figures. A good commercial mediator plus a partner-level solicitor for each side are readily available (at provincial rates anyway) for well under £10K in all. Shop around!
    (3) I'm not aware of any sanctions for failing to settle. The costs sanctions are for refusing to try.
    (4) the more lawyers whinge about measures to reduce the cost of dispute resolution, the more the paying public will gag on the stench of self-interest.

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  • Most mediators are also experienced solicitors or barristers (certainly the mediators here in East Anglia) and are adept at keeping a close eye on the legal aspects whilst helping the parties achieve sensible, realistic outcomes at (comparatively) very modest cost.

    If the legal costs continue to mount up during the mediation, that is to do with the way that the lawyers approach it, rather than the cost of the mediation itself. In family mediation (where disputes are often of high value and can involve complex issues as well as high emotions - and so often more difficult than civil mediations) the norm is for solicitors and counsel not to take part but to be available to advise the parties if needed. That system works extremely well, at much less cost than the civil mediation model, and can often be more collaborative.

    Mary Banham-Hall says above that the drivers of dispute are very often non legal. I agree. Mediation is much better suited to help the parties to resolve those issues, and can result in imaginative solutions that would not be available from the courts.

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  • The only danger I see is a scenario where the mediation process is gradually spoiled by an ever increasing, over involvement of legal procedural-ists or paper flappers who start reproducing the rigmarole of the court system into a process designed to cut through the faff and resolve the key issues.

    For example, the small claims process should never have needed the participation of lawyers save to articulate clear statements of position, and yet we regularly see solicitors instructing senior barristers and blizzards of documentation blinding the parties and the DJ to the point where an argument over an errant tin of salmon turns into the OJ Simpson trial.

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