When is a Refusal to Mediate Reasonable?

A number of issues were considered by Lord Justice Patten in the Court of Appeal in the case of Gore v Naheed [2017] EWCA 369. This was a case in which the Defendant appealed a decision against the damages awarded against them and granting an injunction in relation to a right of way over neighbouring properties. The Claimant was awarded damages in the case despite the fact that there were no general damages pleaded.

In their appeal, the Defendant’s submitted that the Judge should have made some allowance in their favour with regards to costs on the basis that the Claimant refused and/or failed to engage with the Defendant’s offer of mediation. Reference was made to the decision in PGF II SA v OMFS Company 1 Ltd. Lord Justice Patten considered the judgement in this case and looked at the facts of the matter in question. He concluded that it was not considered unreasonable for the Claimant to refuse mediation given there was no realistic prospect of mediation being successful and mediation would therefore have only increased costs. It was agreed that the case was complex, raising questions of law and was therefore correctly deemed unsuitable for mediation.

In summary, the Court of Appeal overturned the Judge’s award of damages but the appeal against the injunction was not successful.

The decision of Lord Justice Patten therefore goes against many judgements handed down in recent cases, particular reference is made to the note of caution that came from the judgment of Lord Justice Jackson in Thakkar -v- Patel [2017] EWCA Civ 117.

Therefore, it still remains clear that all offers of mediation must be considered and where reasonable the offer must be accepted or parties will be at risk of costs sanctions. However, it needs to be borne in mind that declining mediation does not automatically result in a costs penalty. In this instance, despite the Claimant failing to partake in mediation, this was a decision that was deemed to be reasonable by the Judge when exercising his costs discretion, as it was apparent that it would be unsuccessful and only serve to increase costs.

Parties must therefore remain cautious when considering an invitation to participate in ADR.