When you don’t have to mediate to dispose of baseless claims – latest guidance from the court

Executive summary – what you need to know at a Glance

It is a pillar of English Court procedure that parties should use mediation and other forms of ADR to seek to resolve their disputes. This was confirmed in the decision in Churchill v Merthyr Tydfil Council [2023] and subsequent introduction of express powers allowing the Courts to order ADR, including mediation. Whilst the Courts have stopped short of mandating mediation or another form of ADR in every case, the guidance over the past few years from the Court of Appeal down has built on the seminal decision in Halsey v Milton Keynes General NHS Trust [2004] that mediation should take place in every case unless there is a good reason otherwise and, further, that a party who succeeds in a case may be penalised in costs if they have unreasonably failed to engage in mediation.

Grijns vs Grijns & others [2025] is one of the few cases in which a Court of first instance has found circumstances where it would have been reasonable to refuse mediation, including that the current policy supporting mediation does not require a party to “buy off” an unfounded claim. Correctly, a party will not be allowed (where they have a claim without substance) to use mediation and the threat of a potential cost penalty as a sword to force a settlement from a defendant who entirely reasonably does not see why it should pay off a bad claim.

What will still be important for a party who declines to mediate is a clear record of the basis for doing this in order to support its position that its conduct of the case overall was reasonable when the Court weighs up whether or not to reverse the usual position that the successful party should have their costs.

Details of the case

Grijns vs Grijns & others [2025] was a dispute between a number of members of the same family about the claimant’s rights to continue to occupy a property owned by his mother.  The case was hard-fought with “no stone unturned” and the Claimant was, ultimately, unsuccessful.  When the Defendants sought their costs, the Claimant submitted that their failure to engage was justification for disapplying the usual rule of costs following the event.

Master Bowles' judgment considered the key authorities in relation to engagement or not in ADR, including Halsey, PGF(II) SA v OMF S Co Ltd [2014] and Jackson’s ADR Handbook 4th edition.  The Master accepted the position in the ADR Handbook as endorsed by Briggs LJ in PGF(II) that “as a general rule, failure to respond to a serious request to mediate, even if, the date of request, good grounds exist for refusal to mediate, or refusal to mediate along the lines requested, was in itself, to be regarded as unreasonable”. Whilst this is the general position, it is not invariable and a refusal to mediate is not automatically considered to be unreasonable by a Court.  Furthermore, the Master considered that the fact of refusing to mediate should not automatically give rise to a cost penalty but should be regarded as one factor when assessing the overall conduct of a party when undertaking the balancing process under CPR Part 44 in relation to liability for the costs of the proceedings.

The Master considered that the Claimant had in the circumstances been reasonable in deciding not to pursue mediation.  Indeed, as the Master found, there was simply no basis for the claim and that the claim was essentially being pursued unreasonably based on a construct and, therefore, it was not appropriate to consider a costs penalty against the Defendants.  The Master further considered that the pursuit of the litigation was an improper attempt to pressurise the defendants.

It should also be noted:

• as part of the overall circumstances, that the Court considered that the Claimant’s conduct warranted an order for indemnity costs.
• the Court also reflected on a party not engaging with settlement offers and referred to the Glencore International case which held that whilst parties should make reasonable offers to settle, consider sensible and reasonable offers to settlement, and engage with them, they should not be compelled or required when confronted with wholly unrealistic offers to waste time and cost dealing with them.  It was not helpful for parties to fear automatic cost penalty because they refuse to feel compelled to settle unfounded litigation on unjust terms.

Key Takeaways

A party does not have to engage in mediation when faced with an unfounded or wholly unmeritorious case.  Clear reasons for believing this that can be relied upon later for not mediating should be recorded in correspondence

The Court should not automatically impose a costs penalty when mediation has not been engaged with and in relation to the manner in which the litigation was run should also be part of the exercise of balancing the factors in CPR Part 44 when in comes to awards of costs.