Can you refuse an invitation to mediate without risking adverse cost orders? The short answer is yes, provided you have strong grounds for doing so. This was confirmed by the Court of Appeal in its recent judgment in Atlantic Shellfish Limited v The County Council of the County of Cork.
The Court Rules
Court rules allow judges in the High Court to adjourn legal proceedings at the request of one of the parties, or on their own initiative, to allow the parties to engage in alternative dispute resolution (ADR).
The rules also allow judges, when determining who should bear the costs of proceedings, to have regard to a party’s refusal “without good reason” to participate in ADR.
The power to make adverse cost orders discourages parties from simply refusing, without any good reason, to consider alternatives to having their dispute resolved by the courts.
Does this mean that if a party refuses to accept an invitation to mediate, he should be automatically penalised in costs? The Court of Appeal considered this for the first time in Atlantic Shellfish Limited v The County Council of the County of Cork.