Disputes concerning finances, inheritance and property are often complex, and therefore expensive to resolve through court. These types of disputes also frequently involve family members, which can make them particularly distressing. These factors mean that parties often attempt to resolve these disputes outside of court, and a popular way to do that is through mediation.
Mediation is one form of alternative dispute resolution. Alternative dispute resolution is a term used to describe any way of resolving a dispute outside of court proceedings. This includes formal mediation, arbitration, expert determination, early neutral evaluation, informal negotiations and exchanging offers through correspondence.
In a mediation, a neutral third party (the mediator) works with all parties to help them to try to reach a resolution. Mediation is confidential, and the mediator cannot impose a settlement that the parties don’t agree to. Mediation can take place in person or remotely (via video call), and parties don’t need to see each other if they don’t want to.
Reaching a settlement through alternative dispute resolution, such as mediation, has many advantages. Alternative dispute resolution is generally quicker and cheaper than going to court, it allows parties to avoid the risk and the stress of a drawn-out court procedure, and parties can agree practical solutions that a court might not be able to order.
As of 1 October 2024, there will be an added incentive to attend mediation, as refusing to attend could affect how much of your costs you are able to recover from your opponent, or how much you have to contribute towards your opponent’s costs.
Upcoming changes to the Civil Procedure Rules will mean that “any failure by a party, without good reason, to attend non-court dispute resolution” will be a basis for the court to depart from the usual position on costs. These changes will apply to claims under the Inheritance (Provision for Family and Dependants) Act 1975 and claims under the Trusts of Land and Appointment of Trustees Act 1996.
The Inheritance (Provision for Family and Dependants) Act 1975 allows certain categories of people (including spouses and children) to bring a claim against the estate of someone who has died if reasonable financial provision has not been made for them. The Trusts of Land and Appointment of Trustees Act 1996 allows trustees, and others with an interest in property that is subject to a trust, to apply to the court for various orders (including an order for property to be sold).
The court has a wide discretion as to how to deal with costs at the end of a case. The general rule is that the loser pays the winner’s costs. The winner’s costs are usually assessed on the standard basis, with the court looking at whether the winner’s costs were reasonable and proportionate before determining how much the losing party should pay. However, this general rule is often just the starting point, with there being lots of circumstances that might affect the position on costs (for example whether an offer has been made and rejected).
From October 2024 onwards the court may depart from the general rule that the loser pays the winner’s costs where one party has refused to attend a mediation (or another form of alternative dispute resolution) without having a good reason to do so. What would constitute a good reason for refusing to attend a mediation will depend on the facts of each case. For example, good reasons may be that there has already been an unsuccessful attempt at mediation, or one party’s conduct might mean that a mediation is unlikely to be successful.
You should always think carefully before refusing to attend a mediation or another form of alternative dispute resolution, as this decision could have a big impact on how the court determines who is responsible for costs at the end of the case, irrespective of who wins.
If you need advice on mediation or alternative dispute resolution then please get in touch, and one of our team will be happy to help.