How to deal with settlement approaches in the early stages of a dispute
We recently highlighted the Court of Appeal decision in PGF II SA v OMFS Company 1 Ltd, in which a costs sanction was imposed on a defendant because of its failure to respond to the claimant’s request to mediate. Ignoring the other party’s request amounted to an unreasonable refusal to mediate for which the defendant was penalised.
The courts’ strong support of alternative dispute resolution (ADR) procedures such as mediation is in keeping with Lord Justice Jackson’s costs reforms, which are forcing many parties and their lawyers to rethink how they approach the early stages of litigation.
ADR (of which mediation is just one method) has been around for a couple of decades. Yet, in the PGF case, Lord Justice Briggs felt compelled to refer in his judgment to Lord Justice Jackson’s ‘clear endorsement of ADR as a process that is still insufficiently understood and still under-used’…
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