The Costs Consequences of Refusing Mediation – Are the Courts Going Soft on Sanctions?

November 20, 2023


This month David Watkinson reflects on the case-law he has described previously in his blogs on this topic and notes that a reader could have drawn the conclusion that any proposal to mediate had better be complied with or costs consequences will follow. However, more recently, David finds the approach, particularly at High Court level, has become more considered and nuanced.


Summary of key cases

It all begins with PGF II SA v OMFS Co Ltd [2013] EWCA 1288, which has been summarised as follows (in Gore v Naheed [2017] EWCA Civ 369 @ para 49 Patten LJ) as when,

“Briggs LJ emphasised the need, as he saw it, 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”.

And in Thakkar v Patel [2017] EWCA Civ 117, Jackson LJ said :-

“The message which this court sent out [in PGF II] was that to remain silent in the face of an offer to mediate is, absent exceptional circumstances, unreasonable conduct meriting a costs sanction, even where mediation is unlikely to succeed. The message which the court sends out in this case is that in a case where bilateral negotiations fail but mediation is obviously appropriate, the parties should get on with it” (para 31)

And in DSN Blackpool Football Club [2020] EWCA 670 (QB), Griffiths LJ said :-

“No defence, however strong, justifies by itself, a failure to engage in any kind of alternative dispute resolution” (para 28)


However, other cases represent a less stark approach. In Orientfield Holdings Ltd v Bird & Bird LLP 2015 [EWHC] 1963 HHJ Pelling QC sitting as a High Court judge said:-

“When and on what basis an approach made by a party to mediate is a judgment call” (para 76) and

“That a party considers its case a strong one, is not a legally justifiable reason for refusing to mediate” (para 78)


In that case, despite the claimant having taken into account the relative strength of the respective cases in deciding not to mediate, the learned judge did not impose any costs sanction as the parties had agreed to delay mediation until a certain point was reached, had kept open the prospect of mediation throughout the case, and the proposal to mediate had been made close to trial, justifying refusal as the prospects of success of the mediation were low and involved extra expense and the interruption of preparation for trial.


And most recently we have the costs judgment of Richards & Anor v Speechly Bircham LLP [2022] EWHC 1512 (Comm) in which HHJ Russen KC, (sitting as a High Court Judge) ruled as follows:-

“In my judgment, the Defendants’ failure in this case to engage constructively with the mediation proposals does not justify an order for costs against them on the indemnity basis. To make such an order would involve elevating that factor over others which weigh in their favour. Those others include them successfully resisting a significant part of a claim put at around £4.3m…and doing significantly better than either of the Claimants’ Part 36 offers proposed….” (para 25)

In circumstances where neither side made a cost-effective Part 36 offer, the Defendants’ unreasonable conduct in relation to mediation is …sufficiently marked by an order that they pay the Claimants’ costs down to and including trial on the standard basis. That is an appropriate “sanction” for them not engaging in a process of ADR which might have curtailed those costs in a significantly lower sum at an earlier stage of the proceedings.” (para 26)



From the caselaw, it is possible to draw the following trends and principles:-

  • simply refusing a proposal for mediation is, by itself, unreasonable
  • the strength of a party’s claim or defence or the perceived weakness of the other party’s case are not legally justifiable reasons for refusing mediation
  • whether to propose or refuse mediation is a judgement call
  • refusal should be supported by reasons which can withstand the scrutiny of the Courts


Costs sanctions may not follow ‘unreasonable refusal’ if other factors make such an order unjust such as:-

  • willingness to negotiate settlement
  • pursuing other means of settlement eg Part 36 offers, ENV (Early Neutral Evaluation)
  • continuing to consider mediation
  • if the proposal for mediation was too close to trial
  • the losing party was partly successful in a significant part of the case


The cases emphasise that ADR options must be taken seriously by the parties. So at all stages the means to settle claims should be considered and reasoned decisions made which can be placed before the court (which the court may, in any event, have ordered).



While costs consequences may not necessarily follow when parties decide not to mediate, the decision whether or not to mediate is still one requiring anxious consideration and the weighing of the pros and cons. Nevertheless, although the waters are choppy, we may be seeing a turning of the tide. The courts are possibly becoming less absolute about applying a cost sanction where a party refuses to mediate, just as the calls for mandatory mediation are getting louder – but that is a topic for another day.

Garden Court Mediation

Garden Court Mediation