8. The Sanctions for Refusing to Engage in ADR Processes

Abstract

This chapter assesses the possible sanctions for refusing to engage in alternative dispute resolution (ADR) processes. The court will look at whether a party complied with the requirements of Practice Direction—Pre-Action Conduct and the Pre-Action protocols in making decisions about costs. If a party unreasonably refuses to consider ADR, before issue, after issue, or after judgment and pending appeal, they can be penalized in costs. If a successful party unreasonably refuses ADR, they may be deprived of some or all of their costs or ordered to pay some or all of the losing party's costs, including costs on an indemnity basis. Pulling out of an ADR process at the eleventh hour is likely to be judged unreasonable conduct and may result in an adverse costs order. Moreover, the court will not consider ‘without prejudice’ material in considering costs, unless privilege is waived by all the parties to the dispute, or the correspondence is explicitly written on the basis that it is ‘without prejudice except as to costs’.