Page 17 - PIC Magazine Issue 24 - Spring-Summer (Digital)

Every litigator should be astute
to react to any mention of ADR.
The duty is to respond constructively to any mention of Alternative Dispute Resolution. It might be considered premature in which case respond explaining why you hold that opinion. Never ignore any
reference to ADR.
A defendant which refused to mediate on account of a strongly held view that it was blameless, and which was indeed absolved from all blame was yet penalized in costs for their refusal to engage; see LAPORTE V METROPOLITAN POLICE (2015) 3 Costs LR 371.
I did ask Sir Rupert Jackson about mandatory ADR in 2016. He felt that it would be counter - productive to bludgeon parties into ADR and he considered that the existing costs regime was well able to penalize the unreasonable.
Sir Rupert sitting with Briggs LJ upheld a stringent adverse costs order in THAKKAR V PATEL (2017)
2 Costs LR 233. The claimant had persevered for 6 months in trying to drag the defendant to the mediation table before giving up. At trial the claimant recovered less than an early but quickly withdrawn offer to settle made by the defendant. It was wrong of the defendant to have frustrated ADR. Consequently, a tough costs award giving the claimant 75% of
his costs was upheld. Thus, ADR outweighed the offer.
There will always be cases where
it could be contended that ADR is not appropriate. Sir Alan Ward has said that there is no such thing as a case that is too difficult to mediate, a view shared by Sir Geoffrey Vos MR. Indeed, the more uncertain the matter the greater the attraction of seeking resolution outside the Court process. When 2 parties go into
trial presumably both think they will be successful. One is going to be wrong. A settlement in private upon mutually agreed terms will accelerate dispute resolution and there is no risk of a protracted appeal either. Parties enjoy control and select their Mediator and the timing and venue too. Imagine telling the High Court who you want to hear your case and at what time you fancy starting.
The changing economics of litigation has also influenced attitudes. There was a time not so long ago when funds were plentiful. Structural reforms attributable to the Jackson proposals have had a drastic impact.
The White Book 2024 notes found at the back of Volume 2 at page 2837 onwards are excellent. Old arguments against ADR such as “we are too far apart“ are forensically demolished.
A major argument in favour is that mediation could achieve an outcome which no court could impose. Consider what the Court of Appeal said in FAIDI V ELLIOT (2012) EWCA Civ.287.
ADR is not a universal panacea. In PARKER LLOYD CAPITAL LTD V EDWARDIAN GROUP LTD (2018) 6 Costs LR 1235 Lavender J accepted that the defendant was entitled to refuse to mediate in circumstances where the claimant was running a claim with untrue evidence and
the proposal from C was overtly tactical designed to try and extract a nuisance payment. That case is obviously exceptional and, on the facts, understandable.
Everything changed with the unanimous Court of Appeal judgment in CHURCHILL V MERTHYR TYDFIL (2023) EWCA Civ 1416. It decided that a Court can order parties to engage in ADR. The judgment of Lord Dyson in HALSEY (2004) was exquisitely dissected by the Master of the Rolls.
A statement that the Court could not make such an order was obiter. Where it would be reasonable and proportionate, the court can make an order but obviously it must never impede access to adjudication at trial.
The CHURCHILL decision was codified in the October 2024 Rule changes. The overriding objective now includes a reference to using and promoting ADR methods. Case management powers confirm that Judges have the power to order ADR and courts are obliged to consider ordering ADR in all fast track, intermediate track and multi-track claims.
Part 44 states that failure to comply with an order for ADR or unreasonable failure to participate would go to the issue of conduct when considering costs.
A modest but not insignificant costs penalty was imposed by the Court
of Appeal in NORTHAMBER PLC V GENEE WORLD (2024) EWCA Civ 428 against a defendant who remained silent in the face of an offer to settle. Costs were upped from 70% to 75%. The court did remind us that a costs penalty is not automatically to be applied where mediation is rejected,
as stated in GORE V NAHEED (2017) EWCA Civ 369. It is a relevant factor, and the direction of travel is emphatically pro ADR. A case might involve a serious point of law which demands resolution.
www.pic.legal Spring & Summer 2025
PARTNERS IN COSTS
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