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A recent case shows how judges are pushing parties to engage in ADR

June 13, 2024 by Rachel Rothwell

A recent case shows how judges are pushing parties to engage in ADR

An otherwise unremarkable dispute about a property transfer in Nuneaton County Court caught the attention of the legal profession this month because of a finding over costs.

The case shows the gusto with which some courts are now incentivising parties to engage in alternative dispute resolution.

In Conway v Conway & Anor, despite succeeding in the dispute, the defendants’ costs were apparently slashed by 25% because they had rejected offers to mediate.

Judge Mithani KC said: ‘One matter that seriously concerns me is why the defendants did not agree to mediation when it was put to them.

‘The importance of mediation can never be over-emphasised: see, for example, the recent decision of the Court of Appeal in Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416.’

The judge added that the defendants would need ‘compelling reasons’ to explain ‘why the offer of mediation was rejected out of hand by them.’

While this ruling is only at county court level and so not binding on other cases, it is significant in that it shows how last November’s Churchill ruling is being keenly applied by the lower courts. Churchill was a hugely important case in which the Court of Appeal ruled that parties can lawfully order parties to engage in ADR.

According to a report by the Law Society Gazette, in Conway, Judge Mithani reduced the amount of costs the defendants could recover by 25% because they had unreasonably refused to engage in ADR. However, the court refused to reduce the costs by 100%, as the claimants suggested, as this would be too draconian.

The Gazette reports that the claimant’s solicitor had offered pre-action mediation before proceedings were issued in 2022, but the defendants did not respond to this. Later that year, the claimants made a second offer to mediate. The defendants replied setting out that the dispute was unsuitable for mediation, that mediation would delay any final determination and increase costs, and that any agreement reached at mediation would not be final and binding.

A final mediation offer was made by the claimants after the first day of trial, in what turned out to be an eight-day hearing. The claimant made a without prejudice offer which was rejected without counter-offer, and described as ‘absurd’ by the defendants.

According to the Gazette, it is understood that Judge Mithani found the decision to turn down mediation in October 2022 was misconceived, and that the defendants were minded to continue with the litigation. He considered that it was not possible for the defendants to say they were almost certainly likely to win, and so mediation had no merits whatsoever.

The Ministry of Justice is currently consulting on a change to the overriding objective to reflect the Churchill decision, which would give judges an express power to order parties to use alternative dispute resolution, and would specify that ‘unreasonable failure to participate’ in ADR might be reflected in costs orders. But the decision in Conway highlights that, even without this change to the procedural rules, some judges are already keenly pushing forward the ADR agenda.


June 13, 2024 by Rachel Rothwell

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