29/10/2013 – Article by Sion Morris – Technical Claims Manager

A recent decision in the Court of Appeal has highlighted the importance of Alternative Dispute Resolution A.D.R (Alternative Dispute Resolution) and Mediation. Often these important practices are overlooked, however the Courts are now punishing parties who refuse to co-operate or take up the offer of Mediation prior to escalating matters to litigation.

In the case of PGF II SA v OMFS Company 1 Ltd (Property/Building Dispute), Lord Justice Briggs criticised the defendant’s refusal to respond to the offer of mediation from the claimant, ruling this to be unreasonable conduct. LJ Briggs referred in his summing up to the recently published Jackson ADR Handbook (Messrs Blake, Brown and Sime) and precedent laid down in Halsey v Milton Keynes General NHS Trust (2004). The defendant was punished severely for refusing to respond to the offer of Mediation. This is the fundamental aspect of this case; that no response was provided by the defendant. It must be noted that more than one offer was made to Mediate. Despite a last minute acceptance from the claimant of the defendant’s Part 36 offer and further appeals, the costs orders stood and were granted in favor of the claimant.

The underlying message from Jackson in the recent reforms is that a culture change was needed among the civil litigation community, so that widespread benefits of participating in ADR and Mediation were better recognised.

Defendants and claimants alike need to be aware of not only Part 36 and Calderbank offers, but of the offer and utilisation of A.D.R or Mediation which can be as effective if not more so when settling claims. It can also provide the same security when it comes to protection on costs, especially when negotiating and making offers alike pre and post litigation.

Litigation should be seen only as a last resort. A.D.R and Mediation is a clear requirement and part of the Pre-Action Conduct, S.1.2 (2), S8.1 & S8.2. It is highlighted within the Civil Procedure Rules that the court will require evidence of A.D.R or Mediation being considered, emphasising the importance to consider and offer this at all negotiating stages. Although it is not compulsory, and Litigation is sometimes the only option, the courts are changing their attitude on how parties conduct themselves on the lead up to trial and punishing those who readily refuse to mediate.

PGF II SA v OMFS Company 1 Ltd (2013)

Halsey v Milton Keynes General NHS Trust (2004).

MOJ Practice Direction – Pre-Action Conduct


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