The High Risk Of Refusing To Mediate

Alternative Dispute Resolution Strongly Supported By Judiciary


David Shirt, Press Officer | 0161 838 3094

Companies that refuse mediation when in dispute with another organisation must be aware that they face the risk of paying substantial indemnity costs when the matter goes to Court – says a leading litigator at national law firm Irwin Mitchell.

The warning follows the High Court case of Garritt-Critchley v Ronnan.

In this case, which concerned a dispute over the allocation of shares in a company, the claimant’s position from an early stage was that it was willing to mediate with defendant on a claim worth over £200,000.

The defendant claimed however to be confident of its position and refused to mediate stating that the parties were too far apart to make the process work.

After the four day hearing but before the judgment was handed down, the defendant accepted an offer of £10,000 plus costs which was put forward by the claimant. 

The claimant asked the Court to order indemnity costs on the basis that the defendant’s refusal to mediate was unreasonable. The judge agreed and ordered costs of £161,000.

In summing up his reasons as to why these costs should be met, Judge Waksman QC, disagreed with the defendant’s view that there was no middle ground in the dispute and said their lack of confidence that an agreement would ever be reached was unrealistic.

Judge Waksman also rejected the argument that mediation was not possible because both sides disliked each other and said that although there was a lack of trust on both sides, the skill of a mediator to overcome this should not be overlooked.

Mark Elder, Commercial Litigation Partner and Accredited Mediator at Irwin Mitchell in Birmingham, said: