Is The Court Of Appeal Sending Out Mixed Messages About Mediation?
Below Andrew Miller KC, Civil and Commercial Mediator at 2 Temple Gardens, discusses with Lawyer Monthly the issues surrounding mediation, and what parties should do to maximise chances of success when entering into alternative matters of dispute resolution.
Lawyers have long been aware of the need to encourage their clients to consider the alternative dispute resolution arena. The possible costs consequences for a successful party that fails to engage are equally familiar to all those who practice in the field of dispute resolution. The Courts have been fairly consistent in this respect, namely that ADR, and in particular mediation, is to be encouraged. However, 2017 has seen the Court of Appeal sending out mixed messages on the question of parties’ obligations to engage in ADR and in particular mediation.
The Court’s guidance on the use of mediation can be traced back to 2004 when they robustly encouraged ADR in Halsey v Milton Keynes General NHS Trust  1WLR 3002. However, the Court’s view that the refusal to participate in ADR could result in costs sanctions was partially undermined by placing the burden on the unsuccessful party to show the successful party had unreasonably refused to engage.
It took nine years before the Court of Appeal again gave detailed consideration to ADR. In PGF II SA v and – OMFS Company 1 Ltd  EWCA CIV 1288, Lord Justice Briggs determined that silence in the face of an invitation to participate in ADR was – as a general rule – unreasonable conduct, regardless as to whether a refusal would have been reasonable.
Briggs LJ justified this extension of the Halsey reasoning on the basis that it would always be difficult to belatedly investigate whether a refusal to participate in ADR could be justified. Briggs LJ characterised this as an important message to civil litigants not to ignore a serious invitation to participate in ADR.
In January 2017, the Court of Appeal was again confronted with the issue of the parties’ obligations in respect to ADR in the case of Thakkar & Anor v Patel & Anor  EWCA Civ 117. In Thakkar, In Thakkar, a claim and counterclaim between a landlord and ex-tenants over dilapidations the trial Judge criticised both parties for their failure to engage in mediation. However, criticism was greater towards the Defendant, who overall financially was the losing party. What distinguishes this case is that despite the absence of a refusal to mediate, the Judge at first instance found that the Defendant’s actions in dragging his feet prevented mediation from taking place. Thus, a finding of fact made by the Judge was that if the parties had entered into mediation, it would have resulted in the settlement of the action.
On appeal, Lord Justice Jackson agreed with the trial Judge, stating “he would be astonished if a skilled mediator failed to bring the parties to a sensible settlement.” Jackson LJ sent out his own message to court users, namely, that where mediation is appropriate “it behoves both parties to get on with it”, and that a failure to do so would justify costs sanctions.
The messages from the Court of Appeal over a 15-year period were clear and consistent in respect to potential costs sanctions for parties who failed to embrace the ADR process. At least, it seemed that way until May 2017.
In Gore v Naheed & Anor  EWCA Civ 36, the issue of a party’s obligation to enter into mediation again found its way to the Court of Appeal. On appeal, the Defendant argued that the Claimant should have been penalised on costs given his refusal to mediate. The matter came before Lord Justice Patten, who took a different view to Brigg LJ’s general rule, and stated: “I have some difficulty 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.”
Is this a volte-face by the Court of Appeal? The short answer is no. It is certainly a mixed message compared to the Court of Appeal’s strong comments in Thakkor. However, Gore was not a case where a party had either failed to respond to a request to mediate or failed to engage at all with the process. Crucially, the question as to whether or not it was reasonable to refuse to mediate was raised and adjudicated upon at first instance. The trial Judge had found that the refusal to mediate was reasonable in the circumstances; therefore, the Court of Appeal would have had some difficulty in amending the costs award made in favour of the winning party.
So, where does this leave practitioners when advising their clients on mediation as part of the litigation process? In my view, the Gore case has changed nothing. The primary consideration for all practitioners should be the litigation risk of a court making a costs sanction against a successful litigant, in the event of a refusal or failure to engage in ADR and mediation. It remains the case that sanctions are not automatic. However, it is equally clear that the onus is on any party who does not wish to participate in ADR/mediation to spell out reasons for refusal. A failure to do so will likely lead to a finding of unreasonable conduct on the part of that litigant.
The Court of Appeal remains a strong proponent for ADR and mediation. This was echoed in the recent case of Emojevbe v Secretary of State for Transport  EWCA Civ 934 in July 2017. The Court allowed the Claimant’s appeal of a summary judgment in favour of the Defendant. However, Lord Justice Lloyd Jones sounded a warning to the Claimant in respect of the merits of his case and therefore the costs risks he faced if the matter proceeded to trial. That warning included a strong encouragement to the parties “to attend mediation as a route to achieving a settlement without further court proceedings.” In short, Lloyd Jones LJ expressed the Court of Appeal’s continued view that using mediation as an alternative or adjunct to the litigation process may be, and often is, the preferred course of action.
The messages may have been mixed this year, but closer inspection reveals that the Court of Appeal clearly remains a major proponent of ADR and mediation.
This article was originally published in Lawyer Monthly and can be accessed here.