Can You Refuse To Mediate?

In its recent decision in Swain Mason and others v Mills & Reeve1, the Court of Appeal gave some encouragement to parties wishing to decline to enter into mediation to resolve their disputes.

Background

The courts encourage parties to use Alternative Dispute Resolution (ADR), including mediation, to resolve their disputes. This is derived from the Practice Direction on Pre Action Conduct and Pre Action Protocols, under the Civil Procedure Rules and Court Guides.

The court can penalise in costs a party who in its view has unreasonably refused to mediate. This can include depriving a successful party of an order that the losing party pay its costs. The court can also make case management orders such as a stay granting the parties time to mediate.

Facts of the case

Mr Swain and his family instructed Mills & Reeve solicitors (MR) to assist them in the sale of their shares in their company. Advice was sought as to the sale of the shares and some tax advice given as to how to structure the sale in relation to the proceeds of sale. As matters proceeded Mr Swain indicated he was suffering from an illness and was about to undergo an operation...