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Mediation – Strong Encouragement from the Court of Appeal

Whether or not changes to the Civil Procedure Rules will ever be introduced to make mediation compulsory remains to be seen. However, the Courts continue to take every opportunity to endorse the use of a skilled mediator in the course of litigation and even after trial where an appeal is on foot.

Gregor Fisken Ltd -v- Carl [2021] EWCA Civ 792 involved a dispute over the sale of a Ferrari 250 GTO for some US $44 million. In particular the dispute concerned a further fee of US $500,000 due for successfully recovering and delivering the vehicle’s original gear box.

At the outset of the judgment Males LJ states:

I cannot help thinking that it would have been very much in the interests of both parties, if they were unable to resolve matters themselves, to have engaged the services of a skilled mediator at an early stage.  

Whilst the $44M sale price for the Ferrari might seem like the most notable feature of this case, it is the fact that Lord Justice Males concluded the Court of Appeal’s judgment with a paragraph on mediation which ought to stand out.

The Court of Appeal Judge went on to say that he had asked the barristers acting for both parties whether or not their clients had sought to engage in mediation and he was told that they had not. The barrister for the Respondent sought to justify this on the basis that the other party had failed to respond to settlement offers in the past so it was thought that mediation would not be worthwhile. The Court did not hold back on what it thought of the parties’ failure to mediate (especially where the Judge encouraged mediation at the time of granting permission to appeal). The Judge went on to state:

This is highly unsatisfactory. Strong encouragement from the court to consider mediation merits careful consideration and is not simply to be ignored or rejected out of hand […] I would invite submissions as to the consequences which should follow.

Those consequences are likely to be felt financially with the Court making a cost order to reflect its dissatisfaction with the parties lacklustre approach to mediation.

Should I Mediate?

More often than not litigation involves diametrically opposed parties often involved in a bitterly fought dispute. It is unlikely to be an overstatement to say that most litigants go into a mediation thinking their claim will not settle but even with that mindset, most skilled mediators will tell you that the majority of disputes do settle at (or soon after) a mediation.

Mediation is a dynamic process which benefits from skilled professionals both in the role of mediator and advisor. There are a multitude of factors which can unlock settlement through mediation however, there are very few reasonable reasons not to engage with mediation at some point before trial.

This is another in a long line of judgments where the Court has been quick and unforgiving in its criticism of the parties for failing to mediate.

For more information on the article above please contact Liam Tolen.

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