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By Paul Sandford, Director, ASM Plus

From the point of view of mediation and indeed all types of Alternative Dispute Resolution (ADR) this very authoritative and well explained Blackpool decision makes it abundantly clear that parties to court cases who either dismiss opponents’ requests for mediation and/or disregard requests for discussions for settling out of court will be subject to heavy costs penalties.

This decision is not the first of its kind but whereas in the past there has perhaps been a tendency for senior members of the judiciary to criticise those who declined to mediate, “wrongdoers” of this ilk have not always been held to account.  The judgment demonstrates a very high level of well explained objectivity but nonetheless makes it abundantly clear that in appropriate circumstances, parties to court cases who have behaved inappropriately or demonstrated poor judgment will be both strongly criticised and financially penalised.

Lawyers and judges who in the past have at best paid lip service to the notion of mediation will now do so at their peril.  Lawyers who do not take Griffiths J’s authoritative guidance into account may very well find themselves the subject of a formal complaint and/or a claim for substantial compensation.  It is distinctly possible that an insurance company might take the view that the failure to advise in respect of mediation was so fundamental that it was justified it either declining to provide cover or demanding much heavier premiums in the future.

Griffiths J’s authoritative guidance is entirely consistent with the views that have long been taken by myself and my ASM Plus associates

An outline of the case: –

  1. D issued court proceedings claiming financial compensation from Blackpool. The basis of this claim was that D had been the victim of sexual abuse, perpetrated by a member of Blackpool’s staff.  Ultimately, following a trial that had taken place a short time prior to the judgement which I am commenting on being published, the same judge awarded D damages (compensation) of approximately £20,000.
  2. It appears that from the very start by emphatically denying liability and maintaining that it had “a good defence”, Blackpool adopted a very robust approach and declined to entertain any suggestion of either out of court settlement negotiations or going to mediation.
  3. In his judgment, Griffiths J heavily criticised Blackpool for declining to properly entertain requests for settlement discussions and a suggestion of a £10,000 settlement figure. Equally, the judge expressed considerable concern about the refusal on Blackpool’s part to respond positively to the request for mediation.  He very authoritatively stated that simply maintaining the “good defence” contention was wrong. (3)

What are the implications of this case?

In financial terms the net effects of the matter going all the way to trail were not only that Blackpool had to pay more compensation than might otherwise have been the case up but it was presented with a cost bill that was significantly larger than it would otherwise have been.  We are not told exactly how much that bill was but given that it took some considerable time for matters to be resolved, two sets of lawyers were involved and ultimately there were two presumably lengthy court hearings I suspect that the amount in question was at least five times as much as the £20,000 compensation figure  referred to above.

Other than perhaps in small claims cases, in the civil courts, successful parties will normally expect to be paid their costs.  However, in practice successful parties would not normally expects to be paid all of the costs incurred by their lawyers.  Claims for costs are very strictly vetted by specialist judicial officials and in many instances, a successful party would probably receive something in the order of three quarters of those legal costs.

However, in cases such as the Blackpool case parties who decline to enter into settlement negotiations or to consider mediation or some other form of ADR, can be ordered to pay “indemnity costs”.  This means that the “losing party” would indeed have to pay the full sum of costs incurred by the “successful party” lawyers.

Additionally, as in the Blackpool case there would be very heavy criticism both of the parties themselves and their lawyers.  I do not doubt that aside from the financial implications of this case, a lot of unwanted adverse publicity has been generated and that reputations that may already have been under scrutiny could be damaged further.

Not least because the judge in the Blackpool case gave such an authoritative, well explained judgment, it has very wide implications.  Strictly speaking, the decision was made by the judge whilst presiding in the division of the high court that deals with civil cases.  However, there is no suggestion in the judgment that the views expressed should be confined to civil cases and I have no doubt that very serious note will have been taken by specialist judges in other courts who preside over cases relating to commercial, land and trust issues.

Equally, I have absolutely no doubt whatever that careful note has been taken by judges who sit in the Family Court.  For the most part, the Family Court has very much encouraged mediation but it may very well be that now, judges will take a very robust approach when dealing with parties who have declined to mediate, possibly on the basis that “ I don’t trust him/her”, “it wouldn’t do any good” or “it’s too late for that” will now find themselves being even more strongly encouraged to mediate and very strongly warned of what might happen if they decline to do so.  Such encouragement will doubtless reflect the views of many practicing family lawyers, and indeed mediators who like their civil counterparts will now be expected to ensure that they advise their clients of the Blackpool case and its implications.  I will shortly publish some further articles that consider the implications of this case a little further.

  • Hereinafter referred to as “Blackpool”.
  • Case reference [2020] EWHC 670 (QB) – most easily accessed on the Bailli website – https://bit.ly/3fH224l
  • See for instance the following excerpt included in paragraph 28 of Griffith J’s judgment:

“The reasons given for refusing to engage in mediation were inadequate. They were, simply, and repeatedly, that the Defendant “continues to believe that it has a strong defence”. No defence, however strong, by itself justifies a failure to engage in any kind of alternative dispute resolution. Experience has shown that disputes may often be resolved in a way satisfactory to all parties, including parties who find themselves able to resolve claims against them which they consider not to be well founded. Settlement allows solutions which are potentially limitless in their ingenuity and flexibility, and they do not necessarily require any admission of liability, or even a payment of money.”

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