English & Wales Law of Mediation

Commercial and Civil Disputes

With respect to the law of mediation in England & Wales, on top of the obligations provided by the Civil Procedure Rules, a key case was decided in the Court of Appeal  on 11 May 2004, when it  handed down its judgment in the conjoined appeals of Halsey v Milton Keynes NHS Trust and Steel v Joy and Halliday.

The court was given the opportunity to look at when it might order costs against a successful party who refused to mediate at the invitation of the unsuccessful party.

In Halsey, a clinical negligence claim, the claimant's solicitors repeatedly invited mediation of the defendant Trust, which repeatedly declined because it correctly predicted that they were not liable on what was anyway a low quantum claim. The judge declined to deprive the Trust of its costs on winning, finding 'somewhat tactical' motives on the claimant solicitor's part, who was funding the case on CFA with a 100 per cent success fee. The appeal was limited to the issue of that costs order.

In reaching its decision the court articulated the following principles:

· To oblige truly unwilling parties to refer their disputes to mediation would be to impose an unacceptable obstruction on their right of access to the courts.

· In deciding whether to deprive a successful party of all or some of its costs for refusing to go to ADR it had to be borne in mind that this was an exception to the general rule in CPR Part 44.3(2) and the burden was on the unsuccessful party to show why the general rule should be departed from.

· Such a departure was not justified unless it could be shown that the successful litigant acted unreasonably having regard to all the circumstances of the case.

However the court considered the following as important but non-exhaustive factors to be taken into account:

· The nature of the dispute: some matters were intrinsically unsuitable for ADR.

· The merits of the case: a party’s reasonable belief that he had a strong case would be relevant to reasonableness of his refusal of ADR, for otherwise the fears of costs sanctions might be used to extract unmerited settlements.

· Whether other settlement methods had been attempted but rejected.

· Whether the costs of the mediation would be disproportionately high.

· Delay: this might be relevant if mediation was suggested late in the day and the effect of accepting it at that stage would be to delay the trial.

· Whether the mediation had a reasonable prospect of success.

· Whether the court had encouraged mediation: the more that the court had encouraged mediation, the more likely it was that the unsuccessful party would discharge the burden showing the successful party’s refusal was unreasonable.

The case of Halsey remains one of the key cases within the civil and commercial sphere.

The Employment Context

There has been a review of employment dismissal procedures conducted by Michael Gibbons where he wrote “My vision is of a greatly increased role of mediation; my attitude is based, as you know, on my knowledge of the use of mediation in resolving difficult family disputes, and also with some involvement in alternative dispute resolution through the civil courts.”

The recommendations of the review for the Government included “Challenge all employer and employee organisations to commit to implementing and promoting early dispute resolution, e.g. through greater use of in-house mediation, early neutral evaluation, and provisions in contracts of employment.”

and

“Offer a free early dispute resolution service, including where appropriate mediation, before a tribunal claim is lodged for those disputes likely to benefit from it. The Government should pilot this approach.”

Following the Report, the Government has issued a Consultation Paper, "Resolving disputes in the workplace", and is seeking views of businesses, individuals, trade unions, representative bodies and other interested parties on the recommendations made by the Gibbons Review.

Ad at February 2008 we are awaiting the final draft legislation to see precisely what will be the legal obligations to mediate within an employment setting.

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