Penguins: new lessons to be learned about the importance of mediation

Dispute Resolution

Hospitality - 1 minute read

Ok so this is not really about penguins, but I like the picture as it (clearly) depicts one penguin mediating between two other penguins. 

On a more serious note: we have yet another ruling from the Court of Appeal which underlines the need for parties to litigation to be reasonable and proactive when it comes to mediation, or risk dire costs consequences. 

This property related dispute was of relatively low financial value, in the region of £30,000 – £40,000. Not to say this was of low importance or value to the parties involved, but costs to trial were much higher on each side. It was a dispute ripe for mediation in the Court’s view. 

What went wrong? Well, mediation was proposed by one side,  but the Court found that the other party was unenthusiastic and inflexible in its approach to mediation, such that it never in fact took place. The Court penalised the unenthusiastic party in relation to costs. Because mediation was obviously appropriate and a party frustrated the process “by delaying and dragging its feet for no good reason”, it held that a costs sanction was in order. 

Lessons to be learned? If an opponent to a dispute proposes mediation, it is wise to proactively engage. It is probable your correspondence could come before a court on the issue of how the parties conducted themselves, and costs. 

The case? Case ref: Thakkar v Patel [2017] EWCA Civ 117

Businesses involved in disputes should think carefully not just about whether to take part in mediation, but the enthusiasm with which they do so, or risk being penalised by the court on costs, a ruling makes clear.