Defendant which unreasonably refused to mediate escapes costs sanctions

When considering costs and exercising its discretion under CPR 44.2, the court has regard to all the circumstances including the conduct of the parties before as well as during the proceedings.

That conduct includes conduct by which a party refuses to agree to alternative dispute resolution (ADR).  In Northrop v BAE Systems[1], the High Court found that the defendant had been unreasonable in its refusal to mediate.  However, the defendant had made a without prejudice save as to costs offer that the claimant had failed to improve at trial.

The judge concluded that that neither party’s conduct (refusal to mediate/failure to accept the "without prejudice save as to costs" offer) should be taken into account to modify the general rule on costs.  As the defendant was the winning party, it was awarded costs on a standard basis without any reduction for refusing to mediate. For the full article on this case, including background and case comment, please click here.

[1]Northrop Grumman Mission Systems Europe Ltd v BAE Systems (Al Diriyah C4I) Ltd (No 2) [2014] EWHC 3148 (TCC) (3 October 2014)