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You’re not mediating!

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In my last blog, I was looking at the ways in which you can try and force an opponent to mediate.

If you are the party that reluctantly agrees to come to the negotiating table, what is likely to be the Court’s attitude if you then decide that you will not actively participate to achieve a commercial settlement; in effect, if you decide to ‘pretend’ to engage in the mediation process.

It is a tactic that is deployed for a variety of reasons in practice but you should think twice in light of the decision made in James Carleton Seventh Earl of Malmesbury & others –v- Strutt and Parker [2008] EWHC 424 (QB).

In the James Carleton case the Claimant landowners issued proceedings against the Defendant surveyors, Strutt and Parker, for professional negligence for failure to negotiate ‘turnover’ rent provisions in relation to the lease of land to Bournemouth International Airport. The Claimants were ultimately successful but they did not recover all their costs due in no small part to the stance that the Claimants had adopted in a mediation. The Court took the view that the Claimants’ position at the mediation was plainly unrealistic and unreasonable and commented that:

“For a party who agrees to mediation but then causes the mediation to fail by his reason of unreasonable position in the mediation is in reality in the same position as a party who unreasonably refuses to mediate. In my view it is something which the court can and should take account of in the costs order…”

So the salutary lesson for those who are not committed to resolving a dispute by way of mediation but nevertheless find themselves participating in a mediation is that you should not sit down at the mediation table for 5 minutes and then grab your coat and walk out. You will have to participate in the process, make concessions and at least give the semblance of engaging in order to minimise the risk of costs sanctions being imposed.
 

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