The Court of Appeal has issued a ruling on the circumstances when it is appropriate to penalise a party who refuses mediation in personal injury litigation.
The judgment was reached in the consolidated appeals of Halsey v Milton Keynes General NHS trust and Steel v Joy and Halliday.
In both cases, the court declined to penalise the parties refusing mediation, ruling that the refusal to mediate was not unreasonable in the circumstances. It made the decision after giving consideration to the representatives of four alternative dispute resolution (ADR) firms.
Crutes Law Firm partner and solicitor Paul Hughes said: “At first blush this judgment appears to be a major setback to supporters of mediation.
“On careful analysis, however, the jury is out as to whether the guidance given by the Court of Appeal will in fact encourage the greater use of mediation, in particular in personal injury cases where the take up of mediation has been notoriously slow.”
Hughes said the general tenor of the judgment was in favour of mediation, despite failing to penalise for refusal to mediate in this particular case.
“The message in the vast majority of cases must be that to refuse to mediate still carries the potential risk of a costs penalty. Parties will increasingly need to carefully consider their position in deciding whether it is in their interests to mediate.
“Those in the insurance industry may feel that there are few cases that one truly wants to put before a judge. With that in mind, if the case has not been resolved by direct negotiation or a payment into court, it may be found that mediation offers a realistic alternative to achieve certainty and resolve the case.”
