Mediation upturn hit by Court of Appeal ruling

Hopes of a sudden rise in mediation have been shattered after the Court of Appeal ruled against fining two companies that refused to consider alternative dispute resolution.

In the long awaited action on the joint appeal of Halsey v Milton Keynes NHS Trust and Steel v Joy, the court laid down the principle that litigants must be encouraged to mediate but cannot be ordered to do so by the courts.

Also, while many cases are suitable for ADR, there should not be a presumption in favour of mediation.

The judgement flies in the face of Government efforts to dramatically reduce the volume of court litigation by substantially hiking the number of cases sent to alternative dispute resolution.

The Court of Appeal in ruled against fining defendant Milton Keynes General NHS Trust for declining mediation.

It found that the claimants’ application for mediation was “somewhat tactical”, and upheld the trust’s defence that the costs of mediation were disproportionately high.

The second case, Steel v Joy, involving personal injury allegations, the appeal court judges ruled mediation could not have succeeded because the defendant reasonably believed the claim had no merit.

Paul Hughes, litigation partner at Crutes, said the findings are not an attack on mediation. “The general tenor of the judgment is clearly in favour of mediation. [To] refuse to mediate still carries the potential risk of a costs penalty.”