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AGREEING TO MEDIATE – BETTER LATE THAN NEVER
May 31, 2018
Background
The latest twist in the issue of cost consequences for a party which has refused a proposal to mediate a dispute has been played out in a specific ruling on costs by Mr Justice Arnold in Shakir Ali and Anr v Channel 5 Broadcast Ltd [2018] EWHC 840 on 28th April 2018. Earlier (22nd Feb 2018) the judge had ruled against Channel 5 in the claim brought against it by Mr and Mrs Ali for breach of Article 8 ECHR (right to respect for private and family life and the home) arising out of the filming of their eviction from property they had been renting from a private landlord, following the making of a possession order, sought after rent arrears had arisen, by High Court Enforcement Officers. The film was shown on television as part of the series “Can’t Pay, We’ll Take it Away”.
The judge found that the manner in which the filming had been carried out did amount to a breach of privacy, not outweighed by Channel 5’s Article 10 rights (freedom of expression) and awarded the claimants 10,000 pounds damages each.
The costs arguments
Three issues arose related to whether the Claimants were entitled to recover the whole of their (assessed) costs. The first was on the basis that the claimants’ solicitors had (allegedly) refused an offer of mediation, although a mediation eventually took place, but was unsuccessful.
Was there a refusal to mediate?
The defendant’s solicitors first raised mediation in a letter dated 29th Feb 2016 (letter before claim 17th Feb 2016) stating that Channel 5 was prepared to enter into an ADR procedure “should that appear advantageous”. To that the claimants’ solicitors replied (10th June 2016) that as “fundamental issues of law and regulation [are] in dispute, we do not consider ADR would be productive or appropriate…but our clients will be prepared to keep under review the option of ADR”.
At that stage the claimants were seeking an injunction (not to repeat the programme) and Channel 5 replied (14th June) that that part of the claim was “perfectly suitable for ADR”. On 30th June the claim form was issued and shortly after the programme was repeated. The claimants wrote on 3rd August restating “these circumstances do not appear conducive to ADR…However we remain fully prepared to engage with ADR at a suitable time and invite proposals”.
By December 2017 virtually all preliminary stages to trial had been completed and Channel 5 had offered an undertaking not to broadcast any footage showing the claimants’ eviction in future. The offer of mediation was repeated, the point being made that the claimants concern seemed to be not about money but a public apology. This time the claimants’ solicitor agreed (letter dated 1st December 2017).
The judge’s ruling
The judge decided that the claimants had not refused to engage in ADR and so were entitled to their costs for the relevant period. His reasons were:-
- While not accepting the first proposal, their solicitors had said they would keep the offer under review
- While not accepting the second proposal, the claimants’ solicitor had stated that “they remained fully prepared to engage… “ and invited proposals
- No proposals were made until November 2017 when the claimants “promptly” agreed.
Comment
With all respect to Arnold J’s careful rulings in this case , that approach does appear generous to the claimant’s side as
- They did not agree to mediation in June/August 2016. Their answer was that we do not agree now. We might at some stage in the future but make no promises.
- It is no surprise the defendants made no proposals. By that stage (August 2016) they had made two offers at an early stage of the proceedings and the claimants’ position had not changed.
As a result costs continued to mount over a near two year period.
Conclusion
The defendant’s counsel cited PGF II SA v OMFS Co 1 Ltd [2013] EWCA Civ 12 (which I referred to in my previous blog on this topic) for the general approach being;-
“the need, …….., for the courts to encourage parties to embark on ADR in appropriate cases and said that silence in the face of an invitation to participate in ADR should, as a general rule, be treated as unreasonable regardless of whether a refusal to mediate might, in the circumstances, have been justified.” [para 49].
Ordinarily the difficulty of the issues involved would not be regarded as impediments in themselves to mediation. Indeed the reverse might be thought to be the case as the more complicated the more potentially expensive. Nevertheless the Court found as it did. A lesson could be that if you are going to refuse an offer of mediation, qualify it so that it does not appear to be an outright refusal. Even if we treat this as another case turning on its own facts it would appear prudent to keep in mind the general approach not to remain silent.
