Refuse to take part in ADR? It might just cost you!

In Conway v Conway & Anor [2024] EW Misc 19 (CC), His Honour Judge Mithani KC reduced the Defendants' costs by 25% as he found they had unreasonably refused to engage in Alternative Dispute Resolution. 

The Judge referred to the Court of Appeal case of Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 and expressed concerns prior to handing down judgment that the Defendants had failed to agree to mediation, stating that ‘The Defendants will have to advance compelling reasons why the offer of mediation was rejected out of hand by them.’

The Claimant claimed there was an oral agreement that he would be granted the option to repurchase a barn he had previously sold to the Defendants. The Defendants disputed that there was such an agreement. The Defendants refused various offers of mediation both prior to proceedings being issued and throughout the stages of litigation right up to the day of trial.

This is a clear example of the Courts applying Churchill v Merthyr Tydfil County Borough Council and emphasising the importance of ADR being considered at every stage of proceedings. Whilst the ruling in Conway is not binding, it will be persuasive as to arguments on costs. This paired with the implementation of PD 51ZE for a large number of Small Claims issued from 22 May 2024 onwards, which are automatically referred to a free mediation appointment. The 2-year pilot applies to most money disputes valued at up to £10,000; these developments combined show that ADR is fast becoming an integral and integrated part of the Courts' approach to dispute resolution, and is not something to be ignored.

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