When refusing to mediate is not unreasonable: lessons from MJS Projects (March) Ltd v RPS Consulting Services Ltd
The Technology and Construction Court’s decision in MJS Projects (March) Ltd v RPS Consulting Services Ltd [2025] EWHC 831 (TCC) provides a useful and practical reminder that, whilst the courts continue to strongly encourage alternative dispute resolution, a refusal to mediate will not automatically lead to a costs penalty. The case is particularly relevant for contractors, consultants and their advisers dealing with technically complex disputes where expert evidence is central to the outcome.
Design vs workmanship dispute
The underlying dispute concerned allegations of negligent design arising out of cracking in a container park near Felixstowe Port. The claimant alleged that the defendant’s design was defective. The defendant denied this and maintained throughout that the damage was caused by workmanship defects. At trial, the court rejected the claimant’s case and preferred the defendant’s evidence, in particular finding that the claimant’s expert evidence was unreliable. The present judgment deals with costs following that dismissal.
An attempt to avoid the usual costs consequences
As is often the case in construction disputes, the claimant sought to avoid the usual costs consequence of losing by arguing that the defendant had acted unreasonably in refusing to mediate at various stages. It also relied on alleged late changes in the defendant’s expert evidence. The claimant’s position was that, taken together, those factors justified a departure from the general rule that costs follow the event. The court rejected that argument.
Why the refusal to mediate was not unreasonable, and failure to properly engage with defence raised
A key aspect of the judgment is the court’s careful analysis of the parties’ conduct over time, rather than looking at isolated refusals to mediate. The claimant had repeatedly proposed mediation, both before and after proceedings were issued. However, the defendant consistently maintained that it required a proper understanding of the claimant’s case, particularly its expert evidence, before engaging in mediation. That position was rooted in the defendant’s long-standing case that workmanship defects, not design, caused the damage.
The court accepted that stance as reasonable. It emphasised that, although mediation should always be considered, there is no absolute obligation to agree to it at every stage. In particular, where a dispute turns on competing expert opinions, it may be entirely legitimate for a party to seek clarity on the opposing expert case before committing to the cost of a mediation. Here, the claimant had failed to engage properly with the defendant’s allegations of workmanship defects and had not provided its expert report on a without prejudice basis despite being asked to do so. In those circumstances, the defendant’s reluctance to mediate was not unreasonable.
Mediation is not the only form of ADR
Importantly, the court also recognised that mediation is not the only form of alternative dispute resolution. The defendant had engaged in other forms of settlement discussions, including without prejudice negotiations and offers, and had made a substantial offer shortly before trial. That broader engagement with settlement undermined the claimant’s argument that the defendant had simply refused to participate in ADR.
Timing matters: mediation offers late in time may be unhelpful
Timing was another significant factor. By the point at which mediation was again proposed shortly before trial, the parties were far apart and the proposal was subject to conditions which the defendant considered unattractive. The court was not persuaded that a late-stage mediation on those terms had any real prospect of success, particularly given the claimant’s continued failure to engage with the workmanship case. This reinforces a practical point: the closer a dispute gets to trial, the more difficult it becomes to argue that a refusal to mediate is unreasonable, especially where positions are entrenched.
Expert evidence scrutinised
The claimant also relied on alleged late changes in the defendant’s expert evidence, including additional calculations produced shortly before trial. The court rejected this as a basis for any costs sanction. It found that the additional work carried out by the defendant’s expert was part of the ordinary process of responding to the opposing expert’s criticisms. It did not materially affect the outcome and did not generate additional costs. The court described this as part of the “cut and thrust” of litigation, a phrase that will resonate with anyone involved in expert-heavy construction disputes.
On the other side of the ledger, the judgment contains strong criticism of the claimant’s expert. The court found that the expert failed to apply the correct legal test, did not properly address causation, and had not engaged with the workmanship issues that were central to the defence. His evidence was ultimately rejected in its entirety. The expert had also undertaken additional analysis immediately before trial without informing the parties, further undermining confidence in his evidence.
A high bar for indemnity costs
Despite those criticisms, the court declined to award indemnity costs. The threshold for indemnity costs is high and requires conduct that takes the case “out of the norm”. While the expert’s performance was found wanting, the court accepted that the claimant’s legal team had given appropriate instructions and could not reasonably have anticipated how the expert would perform under cross-examination. The claimant’s strategic decision to focus on design as the cause of the damage, rather than fully engaging with workmanship, was unsuccessful but not so unreasonable as to justify indemnity costs.
Costs follow the event, as expected
The result was a straightforward application of the usual rule: the unsuccessful claimant was ordered to pay the defendant’s costs on the standard basis, subject to detailed assessment. The court also ordered a substantial payment on account of costs, calculated by reference to the defendant’s approved costs budget with a modest reduction, together with interest.
What the findings in this case mean in practice
This decision highlights several practical points for those involved in construction disputes. First, whilst ADR remains strongly encouraged, parties are entitled to take a measured and informed approach to mediation. A refusal to mediate will not be penalised where there are good reasons, particularly where key information, such as expert evidence, has not been provided. Secondly, parties should be cautious about relying on alleged procedural or evidential missteps by their opponent as a basis for avoiding adverse costs consequences; the court will look at the overall conduct and whether any alleged failing had a real impact on the litigation. Thirdly, the case serves as a stark reminder of the importance of robust, properly reasoned expert evidence that addresses all relevant issues, including causation.
How CCC can help
Disputes of this nature often turn on the quality of the evidence, the framing of the issues, and the strategic decisions taken at an early stage, including how and when to engage in ADR. At Contract & Construction Consultants, we assist contractors, subcontractors and consultants in assessing the strength of their position, managing expert evidence, and developing a clear strategy for negotiation, or adjudication. Early advice can make the difference between a commercially sensible resolution and a costly trial outcome.
