Another “slam dunk” for a party that thought they could be unreasonable

The courts are now stepping up to the plate and looking to penalise parties that shun, without proper reason, the opportunity to mediate.

Commercial disputes are ripe for mediation…in almost any case….actually almost EVERY case.

Henderson v Salica [2005] decided in the High Court a couple of months back came back to court on the issue of costs earlier this month. This put a defendant’s outright refusal to mediate under the spotlight…and the beam shone straight through and out the other side.

“Oh this matter is too factually complicated to be dealt with by a mediator” (a guess at the actual words used – but you get my gist) said the defendant. There was a belief in the defendant’s mind (or in the mind of those advising) that their case was so strong they didn’t want to engage.

They didn’t entertain the idea of ADR (Alternative Dispute Resolution) at all.

So how did the court penalise?

It had been a bad trial outcome for the defendant because it also failed to beat a Part 36 offer which it had rejected and failed to engage in any counter-proposal discussions.

The court slammed them.

Because of these poor tactical decisions enhanced interest was applied for the unreasonable litigation conduct, the Part 36 “miss” and the delay caused as a consequence to the claimant getting money due in respect of the claim.

So how much more did it cost the defendant? A cool million quid in interest. A lot of money but significantly over three times more than it would have been with appreciation of the changing landscape in litigation.

AVOID LITIGATION

Let me repeat that:

AVOID LITIGATION

Seems curious that as a litigation solicitor I should be saying that – it being the perceived wisdom that all litigation lawyers want to do is perpetuate the case, rack up fees, get the client to have a day in court and laugh all the way to the bank.

Clients want solutions. They want to get on with their lives free of the horrors of lawyers, judges, the endless wait for cases to get dealt with and the risk….oh the risk!

AVOID LITIGATION

Mediation is increasingly looking like a “must” not a “maybe”. And it certainly isn’t a “no”.

 

Adrian is a Civil and Commercial mediator (CMC No: 2293) and a solicitor.

This article is intended for general information only, applies to the law at the time of publication, is not specific to the facts of your case and is not intended to be a replacement for legal advice. It is recommended that specific professional advice is sought before relying on any of the information given. © Jonathan Lea Limited.