Parties to a dispute are strongly encouraged to engage in ADR to try and negotiate a settlement of a dispute before commencing legal proceedings which should only be used as a last resort.
ADR is often quicker and significantly cheaper than court proceedings. There are many forms of ADR including mediation, adjudication, arbitration and expert determination. ADR will likely be ordered by a court once proceedings are issued so it is sensible to properly consider and engage in ADR before incurring substantial litigation costs. The most common form of ADR ordered by a court is mediation.
In the majority of cases, engaging even briefly in a half day mediation will protect your position, demonstrate reasonable conduct to a court and will likely clarify the real issues in dispute and possibly lead to a settlement of the dispute.
Generally, once proceedings are issued a court will give directions for the management of the case and it now has a duty to consider whether to order or encourage the parties to participate in alternative dispute resolution.
The case of Churchill v Merthyr Tydfil BC [2023] EWCA Civ 1416 made clear that a court has the power to stay the proceedings and order the parties to engage in ADR. A court has the power to do so where such an order is proportionate and does not undermine the parties’ right to a judicial hearing.
In addition, at the end of a case a court has the power to consider how the litigation has been conducted by the parties and will have regard to whether a party failed to comply with an order for ADR or unreasonably failed to engage in ADR. Should a party have unreasonably refused ADR or not complied with an order of the court to engage in ADR a court will have the power to impose costs sanctions.
A court will not generally accept that a refusal to mediate is reasonable if it is on the basis that you do not believe that the other side will compromise or because you believe your case is strong or want your day in court. Reasonable grounds for refusal of mediation include for example that previous attempts at mediation have failed and a further attempt may be unlikely to succeed.
In the case of Northamber PLC v Genee World Ltd & Ors (Rev1) [2024] EWCA Civ 428, the Court of Appeal considered the costs consequences for parties who remain silent in the face of an offer to mediate. It held that “silence in the face of an invitation to participate in mediation is, as a general rule, of itself unreasonable even if a refusal might have been justified by the identification of reasonable grounds.”
In this case one party breached the court order requiring them to explain their failure to agree to mediation and the court took this conduct into account when deciding the issue of costs. Costs sanctions were applied and the court held that the appropriate penalty was to increase the claimant’s cost recovery by 5%.
The most common form of ADR used in property and rights of way disputes is mediation. The mediator is independent and will facilitate negotiations helping the parties to explore possible settlement options. The role of the mediator is not to determine the issues in dispute or impose a solution on the parties.
The mediator is appointed by both parties who jointly pay his fees. A mediator’s fees will vary between approximately £2,000 to £10,000 plus vat depending on the experience of the mediator and the complexity of the matter in dispute.
A successful mediation will result in a written settlement agreement being drawn up clearly setting out the agreement reached. It is a binding contract.
Quinn & Co have considerable experience in representing and achieving favourable settlements for our clients in mediation. Should you wish to discuss your need to be represented at a mediation or possible grounds for reasonably refusing ADR please contact Joseph Quinn on 01392 248858 or email us at mail@quinnlaw.co.uk or fill in our contact form and we will call you as soon as possible.
This article is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such