Recently, our client achieved a successful outcome in a trial, but the case serves as a timely reminder of an important point that the courts have been making for years: winning at a final hearing doesn’t always mean that litigation was the best option. Though our client prevailed in court, the judge’s comments, especially regarding costs, really emphasised that mediation is often the most sensible, cost-effective, and practical route for resolving disputes.
Litigation Success Can Still Be Costly
In this case, the other party represented themselves and turned down several chances to engage in settlement talks, including mediation. While the court didn’t impose any punitive costs for this refusal, it was clear that the defendant’s unwillingness to mediate placed them in a much worse financial position than if they had been open to settlement discussions earlier on. This outcome isn’t unusual. Many parties, when declining mediation, hope to get a better result in court. But here’s the issue: that strategy often misses the bigger picture.
What’s the Right Test?
The real question is not whether a party might win more by continuing litigation. The key question courts repeatedly highlight is whether, considering the risks, costs, delays, and proportionality, litigation is truly the best option over settlement. Even if a party wins at trial, they might recover only a fraction of their costs, spend a significant amount of time and money managing the case, face delays, or must deal with the risk of enforcement. In many cases, the outcome could have been reached much earlier and at a fraction of the cost through a realistic settlement. When settlement offers come up, whether through formal mediation or other means, parties should be evaluating them not by the best-case trial scenario, but by the potential downsides of continuing to litigate.
The Court’s Clear Stance on Mediation
Courts have made their position on mediation crystal clear. It’s no longer a subtle suggestion it’s a strong encouragement. Refusing to engage in mediation without a solid reason puts you at financial risk. Mediation isn’t a sign of weakness; it’s a practical and often more effective way to resolve disputes. The old idea of having “your day in court” doesn’t really apply in modern commercial disputes. The courts now lean toward finding pragmatic solutions, especially when a resolution can be reached outside of a long, costly trial.
Why Mediation Works
Mediation is effective because it gives both parties control over the outcome. It helps them explore creative, commercial solutions that might not be available through a court ruling. It also allows for a more private, confidential process and helps avoid the all or nothing nature of an outcome of a trial. Even when mediation doesn’t result in a final settlement on the spot, it often helps narrow down the issues, clarify risks, and create momentum toward a resolution.
Although this case ended well for our client, it highlights an important broader point: litigation shouldn’t always be the go to option. The courts encourage mediation for good reason, and parties who ignore it often end up at a disadvantage.
Taking a step back and considering the risks involved not just whether you might win in court is becoming essential. From my experience as a CEDR-accredited mediator, I’ve seen firsthand how early engagement in mediation often leads to better, more balanced outcomes for everyone involved.
For an initial consultation, or to discuss mediation or any ongoing dispute, please contact me directly by email or phone.
