Which Type of Mediation is Better asks the High Court?

4th June 2021 Commercial Litigation

The recent costs judgment in Beattie Passive Norse Ltd & Anor v Canham Consulting Ltd (No. 2 Costs) [2021] EWHC 1414 (TCC) (28 May 2021) had some interesting points about mediation and the costs consequences of refusal to engage with it.

It is not necessary for my purposes to go into the details of the case. Suffice it to say that one of the two Claimants was awarded a derisory sum in damages and the court held that a large part of their case was “factually untruthful”. The Defendant was accordingly seeking its full costs on an indemnity basis. The Claimants sought to argue that the Defendant had unreasonably refused mediaitioj and that when it had agreed to mediate it was only prepared to engage in a form of mediation know as blind bidding. This was argued by the Claimant to be an unsatisfactory approach to ADR.

The court rejected both arguments. The Defendant had mediated and so it was not an issue of refusal to mediate but a delay in doing so.  However at the time that mediation was refused the Claimant was continuing to advance a case which was later found to have no basis in fact. The court also took the view that it was reasonable to consider disclosure and  witness evidence before mediating. For all these reasons the court was not prepared to accept the argument.

The court did not dwell on the second argument as it was largely irrelevant by this stage. However the judge did say that it was “reluctant to impose a qualitative analysis on different types of mediation”.

There are three points worth noting here. First, is a repeat of the key point that refusing to mediate is a big problem but refusing to mediate until later is far easier to justify and the court is reluctant to get involved in a debate about exactly when mediation should occur. Second, a refusal to mediate is not a get out of jail free card and will not protect a party from the consequences of a bad case. Third, the court is not inclined to get into a debate as to what form of mediation has been used. An honest effort is enough.

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David Smith is a Partner located in Londonin our Commercial Litigation department

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