Conway v Conway and Another (Rev1) [2024] EW Misc 19 (CC) is a yet another case demonstrating the increasing importance the Court places on mediation and the penalties that might be applied to a party unreasonably refusing to engage in mediation. In this instance, refusing to mediate cost the Defendant a five-figure sum.
The case concerned a claim for a declaration from the court that prospective purchasers of a barn were not entitled to enter a barn. The Claimant and Defendants had orally agreed that the barn, which was located on land owned by the Claimant, would be sold to the Defendants. Before the sale concluded, the Defendants started to convert the barn, spending significant sums on it. The oral agreement was never set out in writing and the sale fell through when the relationship between the parties broke down, at which stage the Claimant brought its claim to prevent the Defendants from accessing and continuing the works on the barn. Whilst the Court ultimately found in favour of the Defendants, the important takeaway from the case concerns the Defendant's refusal to engage in mediation.
The Claimant had offered to mediate on a number of occasions, including before the claim was issued. Those offers were ignored by the Defendants on the basis that they believed they were almost certain to win at trial and that breakdown in their relationship with the Claimant meant any mediation would have been unsuccessful.
On the first day of the trial the court once more encouraged the parties to settle the dispute, at which stage the Claimant made a without prejudice offer to settle. The Defendants rejected that offer without advancing a counteroffer.
A final attempt to settle the dispute was made during a period where the trial was adjourned. The Claimant again offered mediation which the Defendants rejected unless the Claimant agreed to cover all costs of the mediation.
The Judge held that:
- He did not think it was possible for the Defendants to say that they were almost certain that they would win at trial, indicating that the Claimant could have persuaded the court.
- The Defendants were mistaken to think that mediation would fail simply due to the parties' broken relationship.
- There was no evidence to suggest that the Claimant would not have increased his without prejudice offer to such a figure which could have prevented the Defendants from issuing a claim.
- It is unreasonable for one party to require the other to incur all the costs of a mediation as a requirement to engage in mediation.
It was also highlighted that trained mediators can put forward alternative approaches to settlement which in this case may have prevented the claim being issued by the Claimant or proceeding as far as it had.
As a result, despite successfully defending the claim, the Defendants' recoverable costs were reduced by 25% (amounting to a reduction of £11,750) because of their refusal to mediate.
Whilst mediation may not be compulsory just yet (see Mediation: Is it compulsory? | Kuits Solicitors), this case once again emphasises the principle that the courts will require good reason from any party who does refuse an offer to mediate.
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