Failure to Mediate
Mediation is an effective tool in resolving disputes for
many reasons. The use of mediation can allow a dispute between
parties to be resolved both quickly and at a lower cost to those
involved. However, some parties are not fully aware of the benefits
of entering into mediation as an attempt to resolve a dispute and,
as a result; the option can be dismissed. In addition, many parties
feel that they should have their "day in court", regardless of the
cost of doing so. Recently, two cases have focused on this
unwillingness to participate in mediation.
In the Court of Appeal case of Rolf v De Guerin the
Defendant refused to mediate. The case surrounded the construction
of an extension to the Claimant`s house. An agreement was entered
into between the parties but the Claimant failed to make payments
to the Defendant and, as the Trial Judge found, the Claimant`s
husband`s aggressive and interfering role, led to the Defendant
ceasing work and treating the agreement as at an end. Before and
during proceedings, the Claimant attempted to enter into settlement
discussions with the Defendant; which included the suggestion of
mediation. This was rejected by the Defendant.
When the Defendant was asked by the Court as to why he was
unwilling to mediate, his reasons included that he would not have
been able to demonstrate to a mediator what the Claimant`s husband
was like and also that he wanted his "day in
At trial, the Defendant won. However, the Claimant then
appealed on a number of grounds, including the Order for costs made
by the Trial Judge in favour of the Defendant. The Claimant`s
argument was that in refusing to participate in mediation, the
Defendant`s behaviour was wholly unreasonable. The Trial Judge
agreed that the Defendant`s refusal to mediate was unreasonable and
made no Order as to costs.
In the second case, SPGF II SA v OMFS Co & Another,
consideration was again given to the fact that a successful party
may not be successful in recovering its costs if it unreasonably
refuses to mediate. In this case, the Defendant refused to mediate
on the basis of what had happened at a previous mediation between
the two parties in 2010 (in relation to a different dispute). The
refusal was also based on the belief that there was not enough time
for the parties to enter into and fully engage in settlement
discussions prior to trial.
Again, as with the case of Rolf, the Trial Judge held that
it was unreasonable for the Defendant not to respond to the
suggestion of mediation. The Judge did not give any consideration
to the previous conduct at an earlier mediation, which had not been
raised by the Defendant at the relevant time. Rather, there had
just been a straight out refusal to co-operate.
The refusal by a party to an offer to consider mediation
without true justification may therefore often be seen as
unreasonable behaviour and can deprive a successful party of its
Courts are keen to encourage mediation between parties and a
failure to overcome obstacles to mediation during proceedings will
not be justified by excuses or the need to have a "day in court".
What these cases highlight is that parties should give serious
consideration to the advantages of mediation before simply
dismissing them without true justification to avoid penalties for
1 February 2012
This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.