EWCA Civ 1274
Respondents to the claim were awarded costs, despite declining mediation
This was a neighbour dispute in which the claimant had sought to restrain alleged trespass by his neighbours over his land. He was unsuccessful and appealed, again unsuccessfully. Despite a number of real attempts by the respondents to settle the dispute, the claim went to trial. Before the trial date, the claimant suggested mediation, which the respondents declined in the light of the claimant’s previous refusal to negotiate. The court was asked to decide upon costs.
Whether, having successfully defeated the appeal, the respondents should be entitled to their costs, notwithstanding that they had declined the claimant’s late offer of mediation.
The Court of Appeal (Peter Gibson LJ, Chadwick LJ, Hale LJ) awarded costs to the respondents. The respondents had not acted unreasonably by declining the offer of mediation, in the light of their attempts to negotiate and generous offers to settle. The claimant had appealed the trial judge’s costs order on the mediation point and Arden LJ had refused permission, on the basis that there was no evidence that mediation would have resulted in agreement. The usual order that the unsuccessful appellant should pay the respondent’s costs was unaffected.
The mere fact of an offer of mediation by an ultimately unsuccessful party does not mean that it will refuse to award costs to the successful party. It all depends on the specific facts of the case. Genuine attempts to negotiate and offers to settle will form a basis for refusing a late (and perhaps cynical) proposal of mediation. In appropriate cases it may well be sensible for a party proposing mediation (a) to do so as early as possible and, if necessary, to repeat the proposal and (b) to give the basis on which it is suggested that mediation would have a realistic prospect of success. It is important to note that negotiation should remain the key means of settling cases with mediation and other forms of ADR being important additional means by which resolution may be achieved.