IS IT AN OFFER TO SETTLE?

Written by Graham Perry

Graham Perry M.A. Cantab FCIArb Experienced Arbitration Lawyer | China & Chinese Business Affairs | Public Speaker/Lecturer

10 April 2021

COMMENT FOR THE DAY #53

MEDIATION

Party A makes an offer in a mediation. Party B thinks the offer is “derisory” + an “insult”. Party B threatens to walk out of the mediation + inform the court that Party A did not engage in the mediation “in good faith” (i.e. in effect it refused to mediate) when it comes back to court and an argument on costs. What do you do?

Interesting question. What is the basis on which parties agree to mediate? Do they have to agree? Do they have to act in good faith? Are parties at risk of a costs order if they do not want to agree? Are parties being denied their right to go to court by being threatened with a costs order by a Judge?

Let’s step back. Why mediation? Why do the Courts encourage the parties to go to mediation instead of litigation? The answer is that it makes sense. Often it is possible, when the parties are around the table, to bring about a settlement. It is a better option than being locked in combat. Mediation is about Peace. Litigation is about War. And as Winston Churchill said, “It is better to Jaw-Jaw than to War-War”. Common sense does dictate that it better to explore the possibility of a solution that saves costs than of a conflict that increases costs – and pain. But are the Parties required to reach an agreement or even engage in negotiations?

Episode 2 on 13 April 2021

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