The Judiciary has launched an onslaught against those who ignore or frustrate the suggestion of Alternative Dispute Resolution (ADR). This is not a one-way street. Either party could be in the wrong. The sanction applied is inevitably financial. Costs otherwise payable could be reduced or additional costs in excess of what would ordinarily be due could be awarded, typically on the indemnity basis.
Judges admire those who suggest ADR and despise those who block it.
In DSN V BLACKPOOL FOOTBALL CLUB (2020) EWHC 596 Griffiths J laid into the defendant.
In giving Directions in the case Master McCloud ordered that
“At all stages the parties must consider settling this litigation by any means of Alternative Dispute Resolution (including Mediation); any party not engaging in any such means proposed by another must serve a witness statement giving reasons within 21 days of that proposal; such witness statement must not be shown to the trial judge until questions of costs arise.”
The defendant refused to engage and filed a witness statement asserting that it had a “strong defence.” The reasons given for refusing to engage in mediation were inadequate. They were, simply, and repeatedly, that the Defendant “continues to believe that it has a strong defence”.
No defence, however strong, by itself justifies a failure to engage in any kind of ADR. Experience has shown that disputes may often be resolved in a way satisfactory to all parties, including parties who find themselves able to resolve claims against them which they consider not to be well founded.
Settlement allows solutions which are potentially limitless in their ingenuity and flexibility, and they do not necessarily require any admission of liability, or even a payment of money. Even if they do involve payment of money, the amount may compare favourably (if the settlement is timely) with the irrecoverable costs, in money terms alone, of an action that has been successfully fought.
The costs of an action will not always be limited to financial costs, A trial is likely to require a significant expenditure of time, including management time, and may take a heavy toll on witnesses, even for successful parties. which a settlement could spare them. As to admission of liability, a settlement can include admissions or statements which fall short of accepting legal liability, which may still be of value to the party bringing a claim.
The upshot? The claimant was awarded costs upon the generous indemnity basis for a year of the litigation.
So, the astute will raise ADR. If it is suggested to you then it is your duty to respond promptly and constructively.