In November 2023, we saw the court stress the importance of alternative dispute resolution (ADR) in Churchill v Merthyr Tydfil County Borough Council where it was confirmed that the Court could make an order for (a) parties to engage in ADR and/or (b) to stay proceedings for ADR to take place.
The importance of ADR has now been reiterated in the case of Conway v Conway & Anor. His Honour Judge Mithani KC sitting in Nuneaton County Court reduced the successful defendants’ costs by 25% due to the defendant’s unreasonable rejection of offers to mediate without compelling reason. Whilst not binding, the decision is persuasive and shows a clear sign from the courts with respect to the importance of ADR.
The submissions in Conway also referred to Northrop v BAE Systems, where the court found it unreasonable for the defendant to reject an offer to mediate. In light of Conway v Conway, perhaps the without prejudice offer made by the successful defendant was the saving grace preventing the court from making a reduction to the successful party’s costs in Northrop v BAE Systems.
Outside of the courtroom, on 22 May 2024, PD 51ZE came into force for small money claims up to £10,000. This had the effect that these claims are automatically referred to free one-hour mediation appointment. Mandatory mediation for higher value fast-track and multi-track claims is also currently being considered by the Ministry of Justice.
In essence, the courts are putting growing pressure on litigating parties to show engagement in out of court dispute resolution. It is also becoming increasingly clear that this should be a consideration even for parties who are likely to be successful.
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