Refusal to mediate – sanctions won’t always apply – Gore v Naheed & Ahmed [2017] EWCA Civ 369

Refusal to mediate – sanctions won’t always apply.

Following the decision of Briggs LJ in PGF II SA v OMFS Company 1 Limited [2013] EWCA Civ 1288, there has been increased focus on the duties of parties to litigation to consider some form of ADR, most usually mediation.

In that case, Briggs LJ said:

“In my judgment, the time has now come for this court firmly to endorse the advice given in Chapter 11.56 of the ADR Handbook, that silence in the face of an invitation to participate in ADR is, as a general rule, of itself unreasonable, regardless whether an outright refusal, or a refusal to engage in the type of ADR requested, or to do so at the time requested, might have been justified by the identification of reasonable grounds”

and went on

“ this case sends out an important message to civil litigants, requiring them to engage with a serious invitation to participate in ADR, even if they have reasons which might justify a refusal, or the undertaking of some other form of ADR, or ADR at some other time in the litigation…the court’s task in encouraging the more proportionate conduct of civil litigation is so important in current economic circumstances that it is appropriate to emphasise that message by a sanction which, even if a little more vigorous than I would have preferred, nonetheless operates pour encourager les autres”

However, in a more recent case before the Court of Appeal, Gore v Naheed & Ahmed [2017] EWCA Civ 369, Patten LJ has made it plain that there is some difference of opinion in that Court as to the approach to be adopted, as may be seen from his rather caustic phrasing:

“Mr McNae referred us to the decision of this Court in PGF II SA v OMFS Company 1 Ltd in which Briggs LJ emphasised the need, as he saw it, for the courts to encourage parties to embark on ADR in appropriate cases and said that silence in the face of an invitation to participate in ADR should, as a general rule, be treated as unreasonable regardless of whether a refusal to mediate might in the circumstances have been justified. Speaking for myself, I have some difficulty in accepting that the desire of a party to have his rights determined by a court of law in preference to mediation can be said to be unreasonable conduct particularly when, as here, those rights are ultimately vindicated”

Clearly Patten LJ struggles to accept the basic concept of some form of primacy of mediation over litigation.

He went on to note that even if the failure to engage in ADR was found to be unreasonable, this would not necessarily and automatically result in a penalty in costs (a point also made by Briggs LJ in “PGF”). It is a factor to be taken into account, but not determinative of itself. There is perhaps a distinction to be drawn between failing to respond at all to an invitation to mediate and a refusal to mediate, but in Gore the Judge below had taken the refusal into account, but concluded that such a step was not unreasonable – there were complex issues of law which made the case unsuitable for mediation.

The decision thus falls within the description of the law as described in “PGF”, particularly bearing in mind the fact that costs remain within the discretion of the Judge, but the emphasis on the question of refusal to mediate as to how this should be applied on any costs award is clearly weaker in Gore. The case may well therefore be a useful one to have in the armoury where there is an allegation of poor conduct on this ground.