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.’