Too complex to mediate? Rethinking ADR in high-stakes cases

We recently saw a letter from an opponent suggesting a case we were both working on was “too complex” to mediate. 

Given the Court’s powers to require mediation now, in this article we examine whether there is ever a good reason to not agree to (or indeed offer) alternative dispute resolution (ADR). 

Clients of course always ask our guidance on ADR and in particular what we would recommend for their case. 

Whilst it is a fundamental tenet of the justice system that parties may “have their day in court” fewer and fewer cases reach trial and instead settle outside of the court process. While parties retain the option to proceed to court, the amendments to the Civil Procedure Rules effective from 1 October 2024 – alongside the recent case law of Churchill v Merthyr Tydfill County Borough Council [2023] and DKH Retail Ltd & Ors v City Football Group Ltd [2024] – make it clear that the courts now have the authority to direct parties to engage in mediation. As a result, parties are generally required to at least try to reach agreement before trial and if they refuse to engage in ADR, the courts will assess if that refusal was justified.

Acceptable reasons for declining mediation may include a genuine belief that it would be ineffective, concerns about disproportionate costs or delays, urgency of the relief sought or the need for judicial determination of  complex issues. In our view, a refusal to engage in ADR should be reserved for exceptional circumstances. Where there is no sound justification for a refusal, parties risk facing adverse cost consequences and any proposal received for ADR need to be considered very carefully.

“The case is too complex to settle at mediation”

In fact, even the most complex cases can settle at mediation. High value, cross-jurisdictional disputes and/or disputes which are based in one jurisdiction that have complex witness or expert evidence will in their nature  be costly to run, eat management time, carry an inherent amount of risk, and in many cases run for a long trial period. ADR in these circumstances will focus the parties’ minds; not least as the risks and costs of proceeding will come into focus.

There are also ways of dealing with the complexity in an ADR context. For instance, in order to reach a settlement it is not necessary (and in fact it is usually impossible) to have absolute certainty on certain aspects of a case; a pragmatic and commercial approach can be taken to a lack of full information or understanding on a particular point. Further, it is possible to break down a case into constituent parts; for instance, it is possible to use ADR to resolve part of a case or a particular issue. There is nothing to prevent the parties reaching a binding agreement on quantum (in the event of liability at trial being found against the Defendant) or reaching agreement on a specific issue and nothing else. Mediators are also experts at breaking things down in a mediation and then bringing everything back together. They can compartmentalize issues and have them discussed with one at a time. For example, they sometimes ask experts of a particular discipline meet together within a mediation to see where they have alignment and at the same time they can have lawyers discuss a specific legal issue.

Often, there are underlying issues that, while not formally part of the proceedings, can have a huge impact to a parties’ willingness to settle a claim. For instance, there may be significant commercial implications of not bringing the matter to a timely resolution or there may well be PR implications which mean that a publicly available judgement could have huge consequences for a particular business.

In our experience, the more complex the dispute, the more suitable it may be for mediation. Mediators frequently refer to the concept of “widening the pie- exploring whether there are interests or outcomes that either party values but which fall outside the scope of what the court can award. Bringing these elements into discussion can lead to creative solutions that both parties find acceptable. Such considerations are unlikely to emerge through the court process but can be pivotal at achieving a successful resolution through mediation.

“Offering mediation will appear weak”

This concern is now easy to deal with. Civil Procedure Rule 3.1 states that the parties are required to help the court further the overriding objective, and now the overriding objectives includes “promoting or using alternative dispute resolution”.

The parties therefore are actually obliged to at least seriously  consider ADR, and given so many cases include a mediation now, the perception of “weakness” has in our view decreased. It is now seen as a far more “normal” part of the process. An early offer to mediate could now in fact be viewed as a position of  strength as CPR 44.2(5) has been expanded to allow the court to use its discretion when making a costs award and penalise a party that has “unreasonably failed to engage in alternative dispute resolution”. 

Further, a confident party may want to put forward something different as well; it could offer early neutral evaluation on all or part of the case. This provides a non-binding independent opinion, which can help change the opinion of an opponent who you consider has an unrealistic view of their case.

“ADR will just add to the cost of the case”

Whilst every case differs, we consider that in most cases ADR will actually save costs. This happens in two potential ways:

1. If the case settles early as a result of the ADR then all future costs will not be incurred, meaning (usually) a very significant cost saving.
2. If the case does not settle, most of the work undertaken in preparing for ADR will have been needed anyway in some form. Whilst this is often difficult to quantify precisely, as cases run towards trial, more legal thinking is needed (and often that thinking will have been done in the preparation for ADR), trial bundles are needed (and therefore work in preparing mediation bundles can to a certain extent be recycled) and testing the strength of each party’s evidence will need to be undertaken.

Compared to most significant cases, the costs of ADR will not outweigh the benefit.

So, are there any cases where ADR is not appropriate?

Whilst ADR can be used very effectively at an early stage, and even before the issue of proceedings, you may want to fully understand the other side’s case (and your own case) properly before embarking a mediation or other forms  of ADR.  Certainly, you may feel more confident doing so. That said you could still explore the concept with your opponent and equally explain that you consider mediation can occur after the voluntary sharing of certain information/documents, effectively akin to pre-action disclosure. 

Your case may require the obtaining of an injunction; in that case, you may require the decision of a Judge. Even then, alternative options should still be considered. For example, formal undertakings could suffice, or ADR might help narrow the issues. 

Lastly, some cases may be of such significance that they will answer a novel legal point or set a new legal or industry precedent. These cases are rare, but in such instances, ADR may be less appropriate or likely to result in settlement.  

ADR is here to stay

The landscape of dispute resolution has shifted, and with the courts now empowered to direct parties towards mediation, the question is no longer whether ADR should be considered but how and when parties should engage in ADR.

While there may be rare instances where ADR is not appropriate such as urgent injunctions or precedent setting cases, these are the exception rather than the rule.

Complexity, costs and timing are no longer credible reasons to refuse to mediate. In fact, the more intricate and costly the dispute, the more valuable ADR can be at unlocking a pragmatic, creative and commercial solution that the court process cannot offer.

Ultimately, parties should approach ADR not as a concession but as a powerful tool to preserve relationships, protect reputations and deliver outcomes that are both practical and proportionate.