Risks When Refusing To Mediate

The reality of pursuing formal Court proceedings will require much negotiation with a view to settling matters before a final trial.

Only a small portion of claims reach trial due to a number of factors, including the length of proceedings, the costs, and the inevitable risks at trial. At trial, a claim will not only be decided on its legal merits, but also on the facts of the case which often relies on the performance of witnesses’ evidence. A losing party is likely to be ordered to pay adverse costs to the winner, further adding to the blow of a loss.

In reaching a settlement, the parties can avoid delay, further costs, and the risks at trial. A party will also be aware of the outcome by way of an agreed settlement, offering a degree of certainty. Settlements are generally confidential which also allows matters to remain out of the public domain. In considering the drawbacks of pursuing proceedings to a final trial and the advantages of a settlement, reaching an early settlement begins to become an attractive alternative. Given the advantages of settling a claim, it is no surprise that the Court actively encourages parties to engage in alternative dispute resolution. Any party refusing to engage in alternative dispute resolution risks adverse cost orders being made against them, even if they are deemed the winning party.

Stoney-Andersen v Abbas & Ors [2023] EWHC 2964

Case background

The recent case of Stoney-Andersen v Abbas and others acts as a reminder to parties in dispute to consider means of alternative dispute resolution throughout. This case was pursued by the Claimant to remove the First Defendant as Executor and repay sums wrongfully distributed to the other Defendants, due to the Claimant’s failure to ignore the invalid amendments made to the Deceased’s Will. The Defendant did not challenge the amendments being invalid but initially contested his removal.

Before issuing proceedings, the Claimant invited the Defendants to attend mediation which was accepted conditionally. The Claimant then withdrew the offer to mediate. The First Defendant continued to invite the Claimant to mediate which the Claimant refused. On reaching a Court hearing the claim was no longer contested and the Court was left only to decide upon costs.

The Court held the Claimant should not have refused the mediation requests and would therefore be deviating from the general rule that costs follow the event. Whilst the Claimant was entitled to recover her costs therefore, the Court held the Claimant would only recover 50% of her costs. Such recovery would leave the Claimant being liable for half of her costs despite having been the winning party, demonstrating the importance of considering alternative dispute resolution throughout a claim.