ADR at any cost? When refusal is reasonable
In the recent case of Belson & Ors v Belson & Ors [2025] EWHC 2989 (Ch), the Court rejected an argument that claimants who had succeeded in a trusts and estates dispute should be deprived of their costs because they had refused to engage with the first defendant’s settlement and mediation proposals. The decision confirms that parties will not be penalised for refusing to mediate where the court believes alternative dispute resolution (ADR) would only succeed if grounded in a clear evidential base, or in circumstances where a party’s own non-compliance means there is no realistic prospect of ADR succeeding.
Background
In recent years the English courts have become increasingly willing to impose costs sanctions on parties unreasonably refusing to mediate. This reflects the English courts’ strong support for ADR, with the Court of Appeal in Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 concluding that courts have the power to order parties to engage in ADR.
Since 2024 the Civil Procedure Rules (at CPR 44) have explicitly stated that in considering costs the court will take into account whether a party has failed to comply with a court order mandating ADR or unreasonably failed to take part in an ADR process, for example where this is proposed by the other side. In one recent case, Smith v Campbell [2026] EWHC 144), the High Court denied the successful claimant any costs recovery, making no order as to costs. This was because (among other things) the claimants had unreasonably refused to mediate.
Decision
The case of Belson v Belson involved a trusts and estates dispute, where the successful claimant was unwilling to mediate when ADR was proposed by the first defendant, but where the Court determined that refusal was reasonable in the circumstances.
By a consent order dated 5 September 2023 (the Consent Order), the claimants obtained an order for the first defendant to produce an account of the property and money he held as fiduciary. Costs matters had been dealt with up until that date, so the remaining issue between the parties concerned the claimants’ costs from 5 September 2023 onwards. The Court reaffirmed the general rule under the Civil Procedure Rules that the unsuccessful party pays the successful party’s costs, with any departure from that rule to be assessed by reference to all the circumstances, including conduct and admissible settlement offers.
The first defendant argued that the claimants should be deprived of their costs because they had refused his repeated ADR proposals. The first defendant asserted more than 20 attempts to seek an out of court resolution. However, the Court found that many such attempts pre‑dated the relevant costs period (so were made at times when other issues were in dispute between the parties) and/or were made at times when mediation could not realistically take place.
Further, in his role as a fiduciary, the first defendant had a duty to produce a clear and evidenced account of receipts and payments under the Consent Order. However, his efforts were consistently incomplete or inconsistent, and lacked supporting documentation. Without a reliable account, the Court found that it would not have been possible to facilitate resolution by way of ADR.
In these circumstances, the Court found that the claimants’ refusals to engage in resolution outside of court were not unreasonable. The Court also observed that several months after the Consent Order was made, the first defendant instructed new counsel who effectively conceded that the iterations of accounts provided up to that point were inadequate when he stated that the account formulation process was “continuing”, and no further ADR proposals were made.
The Court also dismissed the first defendant’s additional contention that the claimants’ failure to recover more than they had offered to the first defendant in without prejudice save as to costs (WPSATC) settlement offers should reduce his costs liability. This was on the basis that the claimants’ recovery remained substantial by way of comparison to the WPSATC offers and the first defendant made no counter‑offers.
Applying CPR 44.2, the Court held the claimants were the successful party and that there was no basis to depart from the general rule. The first defendant was ordered to pay the claimants’ costs for the period post-dating the Consent Order and was refused any right to indemnify himself from any of the funds he held as fiduciary.
Comment
The courts will undoubtedly continue to penalise unreasonable refusals to mediate, so parties will need to consider any offer to mediate very carefully and to remain cautious about refusing to engage. However, this decision demonstrates that courts may conclude that in the circumstances of a particular claim successful ADR would require evidential preparation and it is not unreasonable to refuse ADR in its absence.
The decision sits neatly alongside Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416, which while concluding that courts have the power to order ADR, did so in large part on the condition that doing so would serve the aim of resolving the dispute fairly, quickly and at reasonable cost. This decision acknowledges that condition by confirming that ADR should not be treated as a shortcut past necessary evidential groundwork that makes it both fair and effective. It is a second judgment in fairly quick succession, following Grijns v Grijns [2025] EWHC 2853 (Ch) earlier last year, where a ‘refusal’ to engage in ADR has not resulted in costs consequences. Parties therefore should not feel compelled to mediate where they have good grounds not to do so.