Mediation is a useful tool that might assist in the settlement of some personal injury claims.
However, practically all personal injury claims settle or are discontinued without the aid of mediation. In those that do not, can a party afford to refuse to mediate if mediation is offered by the other side or recommended by the court?
Although the question of costs where there had been a refusal of mediation had been dealt with by the Court of Appeal in Dunnett v. Railtrack (2002) 1 WLR 2434, there was no attempt to produce a definitive judgment on the issue until Halsey v. Milton Keynes NHS Trust; Steel v. Joy (2004) EWCA Civ 576.
The judgment in Halsey was that there is no jurisdiction to order a party to mediate. However, the courts may adopt "robust" forms of encouragement to mediate, i. e. cost sanctions (paras. 11, 30). The general rule is that costs follow the event (CPR 44.3 (2) (a); judgment paras. 5, 12). The burden of proving otherwise, i. e. that the successful party acted unreasonably in refusing mediation, is on the unsuccessful party (para. 13). There is no presumption in favour of mediation (paras. 16, 28). The court will not investigate why a mediation failed (para. 14). What is "unreasonable conduct"? There is no exhaustive check-list (para.16).
Nevertheless the court did isolate and list six relevant factors to take into consideration, from (a) to (e).
When should the court make a recommendation for ADR in a personal injury/clinical negligence claim? The Court of Appeal said that the form of order currently used by Master Ungley in clinical negligence claims should be routinely made in "general personal injury litigation". "The parties shall by -------- consider whether the case is capable of resolution by ADR. If any party considers that the case is unsuitable for resolution by ADR, that party shall be prepared to justify that decision at the conclusion of the trial, should the judge consider that such means of resolution were appropriate, when he is considering the appropriate costs order to make.
The party considering the case unsuitable for resolution by ADR shall, not less than 28 days before the commencement of the trial, file with the court a witness statement without prejudice save as to costs, giving reasons upon which they rely for saying that the case was unsuitable." Clearly such a witness statement will have to be drafted comprehensively and at no little cost. Is this really cost-effective in a run of the mill case?
As a matter of fact this is not the Master Ungley order, for Master Ungley defines ADR within his pro forma order as including a round table meeting without a mediator. Meanwhile from 1st May 2004 in any case where damages for personal injury over £100,000 are claimed in a case continuing in Manchester , it is directed that a Joint Settlement Meeting (JSM) should be considered at an early stage.
It is inherent in this direction that, on the Northern Circuit at any rate, a round table meeting in a personal injury claim may be better and more cost effective than a mediation, and that neither a mediation nor a JSM should be imposed in smaller claims.