Civil Engineering Reference
In-Depth Information
In
Swain Mason and Others
v.
Mills & Reeve
(2012), the claimants had proposed
mediation and the Judge had also encouraged parties to consider this. The defendant
consistently declined on the basis they considered the claim to be without merit. The
Judge at first instance took the view that the refusal to mediate was unreasonable and
tookthisintoaccountinamanneradversetothedefendantinhisdecisiononcosts.
However, the Court of Appeal took a different approach. The defendant had been
successful in its defence as far as allegations of breach of duty were concerned. The
position it took was ultimately found to be justified on this important matter. The
first instance Judge had considered that there was a real possibility that, had there
beenamediation,bothpartieswouldhavegainedanunderstandingoftheweaknesses
of their cases. The Court of Appeal was not clear what weaknesses would have been
revealed and noted that the Judge had not gone on to say that, even if they were, this
could have led to a settlement. The first instance Judge had taken into consideration
that an advantage of mediation would be to avoid the risk of 'collateral reputational
damage' to the defendant. The Court of Appeal disagreed. It thought that some pro-
fessional defendants may, quite reasonably, wish to vindicate themselves in respect
of claims.
The Court of Appeal was also concerned at the first instance Judge's suggestion
that a mediated settlement was 'not unrealistic'. In contrast, it characterized the par-
ties' positions as 'a hundred miles apart'. In the circumstances, it was difficult to see
how a mediation could have had reasonable prospects of success. Also, as nothing
hadchangedinthecasetonecessitateare-evaluationofliability,theinitialreason-
able refusal to mediate did not become unreasonable by reason of it being maintained
throughout.
Attention was drawn to the Court of Appeal's statement in
Halsey
that mediation is
not a panacea. It can have disadvantages as well as advantages and is not appropriate
for every case.
In
Halsey
,thecourtwantedtobeclearthatpartieswerenottobecompelledto
mediate and it was a relevant factor that a party reasonably believed it had a strong
case. That reasonable belief could be sufficient justification for a refusal to mediate.
The Court of Appeal in
Swain Mason
considered the fundamental question to be
whether it had been shown by the unsuccessful party (in this case, the claimants) that
the successful party had acted unreasonably in refusing to mediate. In this case it was
thought they had not and therefore that the first instance Judge had been wrong to
take it into account in his decision on costs.
In
ADS Aerospace Limited
v
.EMSGlobalTrackingLimited
(2012), the court took
a similar approach. The defendants had claimed $16 million. Their claim was dis-
missed. he claimant sought a reduction in the defendants' costs entitlement to reflect
the defendants' unwillingness to mediate. The Judge, again with reference back to the
principles in
Halsey
, found that the onus was on the claimant to show the defen-
dant had acted unreasonably, but that they had not established this. The relevant
factors were:
•
The defendant had made four attempts to initiate a discussion.
•
The claimant felt strongly that it was entitled to substantial compensation and did
not appear interested in a nuisance payment.
