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Thakkar v Patel [2017] EWCA Civ 117

Cost consequences of failure to mediate

The Court of Appeal reaffirmed its view that a failure to engage in Alternative Dispute Resolution will have costs consequences.

The Court of Appeal heard an appeal against an order requiring the defendants to pay 75% of the claimants' costs of the claim, despite the outcome at trial being less advantageous to the claimants than the defendants (withdrawn) settlement offer.  The defendants failed to engage with the ADR process without good reason which left the Claimants disillusioned about pursuing mediation any further.  The Court noted that there was a real prospect of settlement had mediation occurred.  The Court of Appeal did describe the trial judge's order as "tough" but he had not acted outside his discretion and that this was clearly a case suited to mediation.

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Consideration as to whether a failure to respond to an offer to mediate is, in itself, unreasonable conduct which should lead to cost sanctions. Costs awarded to the successful party on an indemnity basis despite failure to mediate.
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Costs decision. Consideration of validity of Part 36 offer and reasonableness of failure to mediate at an earlier stage.
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Indemnity costs ordered on basis that losing party failed to engage with offer to mediate.

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