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If you refuse to mediate it can cost you?

In family proceedings, Judges have an obligation to ensure that cases are dealt with "expeditiously and fairly" and in ways that "save expense". This explicitly includes "encouraging the parties to use an alternative dispute resolution procedure if the Court considers that appropriate". This includes mediation.

In the case of H v W the husband appealed the previous decision of the Court in which it was decided that his work bonus should be shared with his wife. This was a case involving financial proceedings following divorce. During the proceedings, the parties were directed by the Court to embark upon mediation in order to settle the issue of the husband's bonus. The Court had indicated that it was inclined to place a cap on the sharing of the husband's bonus from his work. The husband agreed to meet the costs of mediation in the first instance and both parties, ostensibly, agreed to mediate. However, subsequently the wife placed unreasonable conditions upon mediation including her choice of the most expensive mediator and the insistence that her lawyers be present during the course of mediation. Consequently, mediation did not take place as the husband and wife could not agree on a mediator. At the conclusion of proceedings where the Court gave its decision to cap any sharing on the husband's bonus from work to 25% payable to the wife, the wife then made an application for her legal costs. The Court refused to award the wife her legal costs as the Judge found her approach to mediation had been unreasonable including her insistence on the most expensive mediator and her insistence on legal representatives being present at the mediation which was neither necessary nor reasonable.

This is a lesson in how much the refusal to mediate can cost you. In this case, mediation had not taken place, the case progressed to a fully contested appeal and the husband and wife had amassed combined legal costs of almost £50,000.00. The husband's appeal to cap the sharing of his bonus payments was allowed and he had followed the direction of the Court in being willing to engage in mediation at his expense. The wife was unreasonable in her refusal to enter into that mediation. As a result, it cost her the legal costs of the appeal. This is a lesson to those who unreasonably refuse to mediate in that it can cost you in terms of your legal costs.

This case does not state that if you lose your case you will lose your costs. The success or failure of each party is not always determinative as to who will get their costs paid. In this case, the wife's approach to the mediation was considered unreasonable by the Court and effectively deprived the husband of the opportunity to resolve matters without the costs of the appeal. Therefore, taking all of the circumstances into account in this instance, costs should follow the event and the husband should be awarded his costs. The financial impact on the wife's case was significant. She had to pay her own legal costs of the appeal and the husband's legal costs.

Conclusion

It is not always the case that mediation will be successful. However, this case demonstrates that the parties should mediate and the opportunity of mediation should be taken seriously. If it is not, the Court can order that the person who unreasonably refused to mediate to pay their own legal costs and perhaps the other person's costs. This is not dependent upon the result.

Disclaimer: Whilst we do all that is possible in terms of its accuracy, this blog contains general information only. Nothing in these papers constitutes legal advice. You need to consult a suitably qualified lawyer from the firm on any specific legal problem or matter.

5 March 2015
Paul Summerbell
Warren's Law & Advocacy