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The cost of refusing to mediate

27 February 2012

In PGF II SA v OMFS Company I Limited the claimant landlord issued proceedings against the defendant tenant in relation to breaches of repairing covenants.

On 10 January 2012, the claimant accepted a Part 36 offer of the Civil Procedure Rules made on 11 April 2011.

In determining costs the court decided to depart from the presumption that the claimant would be liable for the defendant’s costs from the expiration of 21 days (ie 3 May 2011) from the date of the Part 36 offer to the date of acceptance on the grounds it was unreasonable for the defendant not to agree to mediate. The court therefore made no order for costs for the period from 3 May 2011 onwards.

This is a useful reminder to all litigators of the importance of considering the useful alternative dispute resolution, and in particular the sanctions which may be imposed by the court when a party ignores a request, or unreasonably refuses to mediate.

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