Case Update: The Impact of Silence in an Offer to Mediate

February 24, 2025

In the recent case Northamber PLC v Genee World Ltd & Ors (Rev1) [2024] EWCA Civ 428, the Court of Appeal established a new precedent regarding the impact of silence in response to an offer to mediate, specifically in relation to costs awards.

In this case, the Court redefined what constitutes a “clear offer to mediate” and examined the consequences for parties who fail to respond. The judge ruled that any party refusing to engage in Alternative Dispute Resolution (ADR) must provide a witness statement explaining the reasons for their refusal. Furthermore, the Court held that silence in the face of such offers would be deemed unreasonable and considered as a form of misconduct or breach.

The mediation offer in this case arose from a prior order made in October 2022, a year before the trial, encouraging the parties to resolve their dispute through ADR. The Claimant’s solicitors sent a letter to both Defendants reminding them of the order and reiterating that the Claimant was open to mediation. One Defendant’s solicitors replied, indicating they were seeking instructions from their client, while the other Defendant’s solicitors did not respond at all.

When judgment was delivered, the judge rejected the Claimant’s argument that the Defendants’ failure to respond to the mediation offer was unreasonable, noting that the Claimant had not followed up with the Defendants. The judge described the Claimant’s attempt at mediation as “half-hearted.” The Claimant subsequently appealed, asserting that the Defendants’ silence was indeed unreasonable.

Upon appeal, the Court of Appeal noted that it was unfortunate the parties could not settle through mediation, but emphasised that the Claimant had made a genuine attempt to mediate in line with the order, and the Defendants were at fault for failing to respond. The Court determined that, despite the Claimant’s lack of follow-up, it was the Defendants’ responsibility to engage.

As a result, the Court ordered the second Defendant, who had not responded to the mediation offer, to pay 70% of the Claimant’s costs.

To summarise, this case emphasises the Court’s view that failing to respond to an offer to mediate can be deemed as unreasonable and may have significant cost implications.

Amun Sunner
Paralegal – Commercial Department

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