ADR Key Cases

Essential case law on Alternative Dispute Resolution and the consequences of unreasonable refusal to mediate.

Important Notice

There is now a large body of case law in which the High Court and Court of Appeal have given guidance about the correct approach when Alternative Dispute Resolution (ADR) has been suggested and the consequences that follow if an offer to engage in it has been unreasonably refused.

Judicial movement is in a relentless direction: those who refuse to engage in ADR (including ADR in costs disputes) without good reason, will face costs sanctions. In addition, the court can impose types of ADR on parties (e.g. Early Neutral Evaluation) even against their wishes.

1. The Starting Point

Halsey v Milton Keynes General NHS Trust [2004] 3 Costs LR 393

"All members of the legal profession should now routinely consider with their clients whether their disputes are suitable for ADR"

PGF II SA v OMFS [2013] 6 Costs LR 973

"In my judgment, the time has come for this court firmly to endorse the advice given in Chapter 11.56 of the ADR Handbook, that silence in the face of an invitation to participate in ADR is, as a general rule, of itself unreasonable..."

2. Recent Cases Illustrating The Approach

BXB v Watch Tower and Bible Tract Society of Pennsylvania [2020] Costs LR 341

The Defendant failed to follow a court direction to consider ADR at all stages and refused to attend a joint settlement meeting without explaining why. Indemnity costs ordered from 6 months earlier than the last date that Claimant's Part 36 offer could have been accepted.

DSN v Blackpool Football Club [2020] Costs LR 359

Claimant beat his Part 36 offer at trial. Defendant failed to engage in mediation and failed to advance adequate reasons for declining. Award of indemnity costs from one month after the court had given a direction about mediation.

Wales v CBRE Managed Services Ltd [2020] Costs LR 603

Claimant offered to mediate prior to issue of proceedings, and again a month before trial. The Court accepted that mediation would have had a reasonable prospect of success. Defendant's costs reduced to 50%.

3. Costs Penalties in Detailed Assessment Proceedings

Reid v Buckinghamshire Healthcare NHS Trust [2015] EWHC B21 (Costs)

"If the party unwilling to mediate is the losing party, the normal sanction is an order to pay the winner's costs on the indemnity basis, and that means they will have to pay their opponent's costs even if those costs are not proportionate to what was at stake."

Various Claimants v Mirror Group Newspapers (SCCO 4 October 2016)

"It seems to me that there has been a blanket refusal by the defendant to engage in any sort of alternative dispute resolution... The defendants' conduct is unreasonable to a high degree and such to justify an award of costs on the indemnity basis."

4. Early Neutral Evaluation

Lomax v Lomax [2019] Costs LR 1431

Under CPR 3.1(2)(m) the court can order ENE whether or not the parties agree. The defendant had unreasonably refused to engage in ADR. Indemnity costs ordered from the date of unreasonable refusal, not from the expiry of the Part 36 offer.

Case Law Resources

For full reports of these and other costs cases, visit:

Costs Law Reports →

Avoid Costs Sanctions

Don't risk adverse costs consequences. Contact CADR to discuss ADR options for your costs dispute.

Get in Touch