The test of reasonableness when mediation is not pursued

While it is not always possible to settle a case through means of ADR such as mediation, the decision of Mr Nicholas Vineall QC (sitting as a Deputy Judge of the High Court) in the case of Epoq Legal Ltd v DAS Legal Expenses Insurance Co Ltd [2022] 4 WLUK 245 (27 April 2022) is a reminder that it is expected that parties will take reasonable steps to mediate to prevent further costs being incurred. The word “reasonable” was key in this decision, where the High Court refused to reduce a defendant’s costs following a successful trial outcome, despite a refusal to mediate.

After the trial, the claimant stated that the defendant’s costs should be reduced by 40% due to the defendant’s conduct in refusing to engage in ADR (notably mediation) being entirely unreasonable.

After reviewing the relevant without prejudice save as to costs correspondence, the Judge could not find any grounds to show that either party had taken any unreasonable attitude or position towards the mediation. There may have been an element of delay tactics by the defendant, but as the Judge declared, this was not “tantamount to a refusal to mediate”.

It is always important throughout a case, and in particular at key strategic moments (notably before issuing a claim), to attempt to enter into a form of ADR. Even if the outcome is not necessarily successful, reasonable attempts by both parties must be shown or there may be the risk of adverse costs orders being awarded depending on the outcome of the trial.

If you are in any doubt as to strategic decision on your case and when to mediate, please feel free to contact Guy Davis at [email protected] to assist you.