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When should you consider mediation

Leaving it too late : the cost consequences

The Courts have recently considered the above issue in Car Giant Ltd. And another v London Borough of Hammersmith.

In this case the Claimant was successful in claiming damages for dilapidations following the end of the Defendant’s lease.

The Claimant had failed to beat the Defendant’s part 36 offer, it was accepted that the Claimant should pay the Defendant’s costs from the date of expiry of the date for accepting that part 36 offer.   One argument the Defendant used was that, pursuant to CPR 44.3, those costs ought to be paid on an indemnity basis because the Claimant had unreasonably delayed in agreeing to mediate or take part in some form of ADR.

The Judge appreciated that an unreasonable refusal to engage in mediation might be a reason to order indemnity costs. However this was not a case where there had been an outright refusal to mediate – a mediation had taken place – it was just the mediation only took place shortly before the trial. The mediation date was October 2016 whereas the offer to mediate was made in May 2015.

The Judge’s view was this was a case where mediation had taken place but unfortunately was not successful. He did not accept that if mediation had taken place earlier on in the case, say in May 2015, that it would have been more likely to have been successful.  Therefore he did not consider the delay to mediation could have caused any increase in costs.

The Judge also gave further guidance to say that the court should be slow to criticise a party over a decision when to mediate when those decisions have tactical importance. In this case the party required the experts to provide their complete view.   The Judge considered this a reasonable position to take in not agreeing to mediate at an earlier stage.

The judge therefore ordered that the Defendant's costs after the expiry of the relevant period were to be assessed on the standard basis.

Article prepared by Associate Solicitor Kathy Trist  

To speak to Kathy Trist, please contact her direct on 01392 285015