UK: Silence Is Not Golden: The Price Of Ignoring ADR Requests

Last Updated: 17 January 2014
Article by Ben Rees

In PGF, the Court of Appeal adopted a 'modest extension' of the principles set out in Halsey v Milton Keynes General NHS Trust1 relating to the costs consequences of an unreasonable refusal to engage in alternative dispute resolution (ADR).

PGF commenced proceedings against OMFS in October 2010, claiming £1.8 million in respect of alleged breaches of repairing covenants. On 11 April 2011 the claimant's solicitors sent two letters to the defendant – one was a Part 36 offer of £1.25 million, the other invited the defendant to take part in early mediation. The mediation offer anticipated that the defendant may wish to review the claimant's disclosure, that the parties may benefit from experts meeting to exchange information, and set out specific dates for the mediation. It concluded by requesting the defendant's agreement to mediate, or for an explanation for any refusal. The same day, the defendant's solicitors made a Part 36 offer of £700,000. It did not refer to the claimant's letter and it appears that the parties' letters crossed.

Neither Part 36 offer was accepted and nothing further was heard in respect of the claimant's mediation request. On 19 July 2011 the claimant by its solicitors sent a further invitation to mediate, along with a chaser letter on 1 August 2011; the defendant's solicitors promised a full response by 3 August 2011, but no response was received in relation to the mediation request (it should be noted that the defendant, by its solicitors, was providing full and lengthy responses in relation to other matters pertaining to the ongoing litigation).

On 10 January 2012, the day before the trial, the claimant accepted the defendant's Part 36 offer of £700,000. In accordance with Civil Procedure Rules 36.10, the ordinary consequence of this would be that the claimant was obliged to pay the defendant's costs for the 'relevant period' (in this case from 2 May 2011 to 10 January 2012).


In Halsey, the Court of Appeal addressed the extent to which the court should use its powers to encourage parties to engage in ADR. Unlike in PGF, which concerned a failure to respond to an ADR request, Halsey considered communicated refusals (which, it was claimed, were unreasonable).

Whilst acknowledging that parties should not be compelled to mediate, the Court stated that parties should be encouraged to enter into ADR procedures. The court's general ability to consider a party's conduct when deciding whether to depart from the general rule that an unsuccessful party should pay the successful party's costs includes the power to deprive a successful party some or all of its costs on the grounds of a refusal to agree to ADR.

The Court of Appeal went on to set out guidelines relevant to the question as to whether a party had unreasonably refused to mediate.

PGF: First Instance

The claimant argued that the defendant's refusal to engage with the ADR proposals constituted an unreasonable refusal to mediate, and as such the defendant should not be entitled to recover its costs for the relevant period, and indeed that the defendant should pay its costs for that period. The judge held that the defendant's silence did amount to a refusal to participate in mediation and, applying the Halsey principles, that the refusal was unreasonable. As such, the defendant was refused the right to recover all of its costs incurred during the relevant period.

The defendant appealed, and the claimant cross-appealed (claiming that the judge had not gone far enough and that the defendant should pay its costs for the relevant period).

PGF: Court of Appeal Decision

The Court of Appeal held that the first instance decision to deprive the defendant of its costs for the relevant period was within the range of proper responses to the defendant's conduct. The court held that silence in the face of an invitation to participate in ADR is, as a general rule, of itself unreasonable even where the refusal to mediate might have been capable of justification.

This extension of the Halsey principles was justified on the basis that: (i) the investigation by the court of alleged reasons for refusal to mediate, where none were given at the time, poses difficulties in determining whether the belatedly advanced reasons are in fact genuine; (ii) a failure to provide reasons for a refusal to engage in ADR is destructive of the objective to engage in the ADR process.

In rejecting the claimant's cross-appeal, the Court of Appeal noted that a costs order of the nature applied for by the claimant, whilst in principle within the court's power, was a sanction that should be reserved for only the most serious and flagrant failures to engage with ADR.


PGF sends out a clear message as to the court's views on ADR as a method of resolving disputes which the court fully endorses and will seek to encourage parties to utilise, including with recourse to costs orders.

Following PGF, it is likely that a failure to respond to, or engage with, a party's ADR proposal will be held to be an unreasonable refusal to mediate which may be punished when it comes to costs. As such, if subject to a proposal made by the other side to enter into ADR, detailed consideration should be given to doing so and a positive decision made. To the extent that there are reasonable grounds not to mediate sufficient for a party to refuse to enter into ADR, these grounds should be substantively set out in writing to the other side.


1 [2004] EWCA Civ 576, [2004] 1WLR 3002

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Ben Rees
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.