Silence is not golden — the real cost of ignoring a mediation invitation

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By Simon Pestell

In the recent case of PGF II SA v OMFS (2013), the Court of Appeal upheld a decision of the High Court to deprive a successful party of its costs on the grounds that it had not responded to an invitation to mediate.

The case related to a claim for damages arising from dilapidations. The claimant made two Part 36 offers to accept firstly £1.125m and then £1.25m and followed that up with a detailed invitation to participate in mediation. The defendant did not respond to the invitation and instead made a Part 36 offer to settle of £700,000. The defendant’s offer was eventually accepted but very late (on the eve of trial) and, ordinarily, the claimant would be obliged to pay the defendant’s cost incurred from a date shortly after the offer was made and up to the date on which it was accepted…

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