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Corenso (UK) Limited v The Burnden Group Plc, High Court, 1 July 2003

28 August 2003
The issues

ADR – Mediation – Costs – Failure to Mediate.

The facts

This was a commercial/contract case. After proceedings were commenced, letters passed between the parties discussing mediation and making attempts to negotiate. A Part 36 Offer was made by the Defendant in the sum of £64,000.00. That offer was improved shortly before Trial to £90,000.00. The Claimant sought to accept those offers. There were however issues on costs. The Claimant asked for its costs. The Defendant argued that the Claimant was not entitled to its costs and should pay part of its own costs since the Claimant had failed to respond to offers to mediate.

The decision

1. Failure to engage in ADR may have adverse costs consequences for a successful party.

2. A party may justifiably refuse to consider mediation if it takes the view that there are other forms of ADR.

3. This was a case where the parties had considered mediation. The Claimants had indicated that they were not convinced that mediation was the right forum, although they had never provided details of why they did not think it was the right forum.

4. Throughout, the parties continued to negotiate and it was clear that the parties were prepared to attempt to resolve the matter without going to Court. Negotiation or attempts to use an honest broker, might in some cases be as appropriate a form of ADR as mediation. So long as parties are showing a genuine and constructive willingness to resolve the issues between them, a party will not be automatically penalised because that party had not gone along with the particular form of ADR proposed by the other side.

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