0370 270 6000

Can a refusal to mediate be reasonable?

9 October 2014

In the case of Northrop v BAE Systems, the court had to determine costs after giving judgment in favour of BAE. Northrop submitted that BAE was entitled to its costs but those costs should be halved to reflect BAE’s unreasonable refusal to mediate.

The court examined all the circumstances including the conduct of the parties and the usual factors for determining costs but with specific focus on alternative dispute resolution (ADR).

The court held that whilst BAE had a reasonably held view that it had a strong case, that only provided limited justification for a refusal to mediate as mediation could have had a positive effect (even if the claim had no merit) with the mediator bringing an independent perspective. However, Northrop did not accept an offer of settlement which, had it done so, would have been better than the result achieved at trial.  Therefore, the court held that the fair outcome was that it would not depart from the normal costs rule, with Northrop being ordered to pay BAE’s costs on the standard basis.

This case demonstrates that the courts continue to send out a strong message to litigants that ADR should be considered even if one party believes their case to be effectively a ‘slam dunk’.

Click here to read our bulletin on this case.

Related opinions

IR35 rules to be scrapped from April 2023

The Chancellor’s recent mini-budget provided a significant announcement for business as it was confirmed that the off-payroll working rules (known as “IR35”) put in place for public and private sector businesses from 2017 and 2021 will be scrapped from April 2023.

View blog

Cameras in convenience stores: a potential hornet’s nest..?

A convenience retailer has opted to install cameras (the “Facewatch” system) at a limited number of its English stores to reduce crime and protect its staff.

View blog

Job applicant receives settlement due to unlawful age discrimination at interview

Janice Walsh applied for a job with Domino’s Pizza, hoping to secure a role as a Delivery Driver. However things quickly took a turn for the worse during her initial interview, with the very first question that she was asked relating to her age. Ms Walsh was ultimately informed that she had not been successful in her application.

View blog

Covid Rent Arrears: Cinema operators’ appeals dismissed

The Court of Appeal has dismissed two cases regarding rent arrears accrued during the Covid lockdowns. The cases are London Trocadero (2015) LLP v Picturehouse Cinemas Ltd and Bank of New York Mellon (International) Ltd v Cine-UK Ltd.

View blog

Mailing list sign up

Select which mailings you would like to receive from us.

Sign up