Wragge Lawrence Graham & Co

UK 200 2014 position: 28

Ignore requests to mediate at your peril

In Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 567, the Court of Appeal held that the court should not compel parties to mediate; however, a refusal to engage in alternative dispute resolution (ADR) could amount to unreasonable conduct and expose a party to cost penalties.

The court has taken this principal further in what has been described as a ‘modest extension’ of the principle set out in Halsey. In PGF II SA v OMFS Company 1 Ltd [2013] EWCA Civ 1288, the Court of Appeal considered that, as a general rule, a failure to respond to an invitation to participate in ADR is itself unreasonable, irrespective of whether a party has a good reason not to mediate.

The claimant claimed some £1.9m in relation to alleged breaches of a tenant’s repairing covenant. Following two Part 36 offers from the claimant (in October 2010 and April 2011), it wrote to the defendant inviting it to participate in mediation; it repeated the invitation some months later. Both requests to mediate went unanswered. The claimant sent a further Part 36 offer three weeks before the trial. The defendant also made a Part 36 offer in April 2011 and it was this offer that was accepted by the claimant the day before the trial was due to start…

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