In the recent case of
Richards & Anor v Speechly Bircham Llp & Anor (Consequential Matters) [2022] EWHC 1512 (Comm), HHJ Russen cited the case of
Northrop Grumman v BAE Systems [2014] EWHC 3148 (TCC) in which Ramsey J set out, starting at paragraph 56, the six factors which have a bearing on the reasonableness of a refusal to mediate. Those factors are:
- The nature of the dispute
- The merits of the case
- The extent to which other settlement methods were attempted
- The costs of ADR
- Prejudicial delay caused by ADR, and
- The prospects of successful ADR
In addition, he stated, at paragraph 73, that
“any admissible offer to settle made by a party which is drawn to the court’s attention, and which is not an offer to which costs consequences under Part 36 apply” should also be taken into account.
In the prior case of
Garritt-Critchley v Ronnan [2014] EWHC 1774 (Ch); [2015] 3 Costs LR 453, the Defendant was ordered to pay the Claimant’s costs on the indemnity basis for failing to engage in mediation.
In
Gore v Naheed [2017] EWCA Civ 369 the lower court’s decision to disallow indemnity costs on the basis that it was not unreasonable for the Claimant to decline to engage in mediation was upheld by the Court of Appeal.
In
Richards referred to above, in considering the six factors referred to in
Northrop, HHJ Russen held that the Defendants’ failure to engage in constructive mediation was not sufficient to justify an Order against them for costs on the indemnity basis, and instead awarded costs on the standard basis up to and including trial.
Each case will clearly be taken on its individual merits, but the factors outlined above should always be considered when deciding whether or not to engage in mediation.
