By David Watkinson, Garden Court Mediation
In May this year I blogged about the case of Thakkar v Patel  EWCA Civ 117 as an example of a case in which the Court of Appeal was encouraging parties to mediate their dispute or face serious cost consequences [Mediation? “Get on with it” says the Court of Appeal]. In that case the Court found that mediation was “obviously appropriate” and did not occur because of lack of co-operation by the defendant. I commented then that “no two cases are the same”. Now along comes the case of Gore v Naheed  EWCA Civ 369.
In this case the Court of Appeal (differently constituted) held, on the defendant’s appeal, that the trial judge had not erred in principle when, awarding the costs of the claim to the successful party, he made no allowance for the claimant’s refusal or failure to engage with “[the defendant’s] proposal that the dispute should be referred to mediation” [para 48].
Patten LJ, giving the judgement of the court, said of the trial judge that he had taken the failure to engage into account but “concluded that it was not unreasonable for [the claimant] to have declined to mediate. His solicitor considered that mediation had no realistic prospect of succeeding and would only add to the costs. The judge said that he considered that the case raised quite complex questions of law which made it unsuitable for mediation” [para 50]. And so he did not err.
The area of law involved was relating to easements and no-one would deny its complexity.
However, Patten LJ also referred [para 49] to PGF II SA v OMFS Co 1 Ltd  EWCA Civ 12 (upon which the defendant had relied) as a case in which;-
“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. Speaking for myself I have some difficulties in accepting that the desire of a party to have his rights determined by a court of law in preference to mediation can be said to be unreasonable conduct particularly when, as here, those rights are ultimately vindicated. But, as Briggs LJ made clear…a failure to engage even if unreasonable, does not automatically result in a costs penalty. It is simply a factor to be taken into account by the judge when exercising his costs discretion”.
Note the rather dismissive treatment in my view, given to Briggs LJ’s judgement in PGF. It was not just “as he saw it”. It was the judgment of a fully constituted Court of Appeal in which the only issues raised concerned mediation and which were fully considered, in contrast to the brief treatment to the issue given in Gore as one of three issues in that appeal. Reading PGF [especially paras 34-40 and 56] one would be left, as I see it, with the general understanding that failure to mediate was more than “simply a factor” in the sense of a one of a number of evenly matched factors but rather a factor of prime importance such that failure to properly deal with a mediation request would ordinarily be likely to lead to costs consequences.
Perhaps these cases can be reconciled by focusing on the result in Gore and concluding that a case in which complex questions of law are raised can constitute one of the circumstances in which a party can be justified in refusing an offer to mediate. Of course such a factor can also make the outcome at court less predictable and so encourage settlement. The exercise of judgement when such an offer is made, and how it is responded to, remains as tricky as ever.