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Mediation costs – tips and traps

The Agreement to Mediate will set out the Mediator’s fee and who will pay it in the first instance. The Register and those administering it do not seek to influence or standardise mediators’ fees.

In commercial mediations the starting point is often that each party will pay its own costs, but in personal injury and clinical negligence claims it is more common for costs to be in the case. The Agreement to Mediate should specify this.

Be aware of National Westminster Bank Plc v Feeney ([2006] EWHC 90066 (Costs) and [2007] (Costs Appeal) ) where a successful party failed to recover both the mediator’s costs and its costs for preparing for and attending at the mediation because:

  • the mediation agreement entered in to by the parties on the mediation provider’s standard terms was on the basis that the mediator’s fee would be borne equally by the parties who would bear their own costs;
  • the Tomlin Order agreed when settlement was reached did not deal explicitly with the costs of the mediation; and
  • it was held that the Tomlin Order did not alter the mediation agreement.

See also See also Lobster Group Ltd v Heidelberg Graphic Equipment Ltd [2008] EWHC 413.

To avoid this costs trap check the provisions relating to costs:

  • first, before agreeing and signing the Agreement to Mediate
  • secondly, when drafting the settlement agreement or Tomlin Order at the mediation.

In personal injury and clinical negligence claims where the defendant is going to pay some damages, and therefore some costs, it is often agreed that the defendant will pay all of the mediator's fee and both parties' costs. Defendants can, in appropriate cases, make this clear from the outset on the basis that it may help persuade the claimant to mediate.

Subject to the terms of the Agreement to Mediate, the costs of mediation are recoverable, as costs, in the usual way and this is the case whether the mediation takes place before or after the commencement of proceedings provided that the mediation is carried out as part of, and not prior to, the pre-action protocol work. (See National Westminster Bank Plc v Feeney (see footnote 17); McGlinn v Waltham Contractors Ltd [2005] EWHC 1419 (TCC); [2005] All E.R. 1126; Roundstone Nurseries Ltd v Stephenson Holdings Ltd [2009] EWHC 1431 (TCC); 2009 WL 2392342.)

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