Mediation

09 Oct 2015

Going to court to have disputes determined has just got more expensive. The new court issue fees mean it now costs £10,000 to issue a claim of £200,000, rather than £1,515.

But do you really need to go to court?

Happily the answer is no because disputes CAN be settled long before this arises, either voluntarily or under direction through the Civil Procedure Rules.

These Rules include a Practice Direction for pre-action conduct before a case goes to court stating: “Litigation should be a last resort – the parties should consider whether negotiation or some other form of Alternative Dispute Resolution (ADR) might enable them to settle their dispute without commencing proceedings. Parties should continue to consider the possibility of reaching a settlement at all times, including after proceedings have been started”.

One of the forms of ADR is mediation, which is a structured negotiation facilitated by a mediator who is trained and accredited to help the parties in the dispute to achieve a settlement.

If one or both parties don’t wish to use mediation, the Practice Direction states that the court has power to impose sanctions on a party, including a stay on proceedings, interest and cost penalties.

The courts have imposed harsh cost consequences on those parties who have unreasonably refused to mediate. For example, not recovering costs to which they would otherwise have been entitled, and having to pay costs on an indemnity basis.

While in the case of Halsey v Milton Keynes General NHS Trust [2004] EWCA (Civ) 576, the Court of Appeal decided that to oblige parties to refer their dispute to mediation would be unacceptable, obstruct their right of access to court and would be a violation of Article 6 of the Human Rights Convention, more recently there have been calls to review this.

For example, in the case of Bradley v Heslin [2014] EWHC 3267 (Ch) the judge suggested a form of wording for directions in boundary disputes and rights of way disputes, which would make it compulsory to attempt mediation in such cases. The judge said: “The Court cannot oblige truly unwilling parties to submit their disputes to mediation: but I do not see why directing the parties to take (over a short defined period) all reasonable steps to resolve the dispute by mediation before preparing for a trial should be regarded as an unacceptable obstruction on the right of access to justice”.

There are many benefits to mediation, starting with the fact it is a quicker and cheaper solution, and the parties can agree solutions that a court could not order. Mediations are generally confidential and enable the parties to preserve relationships and to move forward to concentrate on their businesses and/or lives. It’s well worth considering as a option.