Mediation costs are not automatically recoverable in litigation. Whether they can be recovered depends on how the court treats those costs within the framework of recoverable costs, proportionality, and conduct under the Civil Procedure Rules.

In practice, the recoverability of costs associated with mediation, including mediator fees and related legal costs, will turn on the track of the claim, the terms of any costs order, and how the court assesses the parties’ conduct, particularly in relation to ADR.

 

The General Position on Mediation Costs

Mediation is encouraged under the CPR as part of the court’s wider objective of dealing with cases justly and at proportionate cost. However, this does not mean that the expense of mediation is automatically recoverable.

Instead, these costs are usually treated as part of the overall costs incurred in the litigation. Their recovery depends on:

• Whether they fall within the scope of a costs order
• Whether they are considered reasonable and proportionate
• Whether they are recoverable within the applicable costs regime

As a result, even successful parties may not recover all sums spent on ADR.

 

Mediation Costs in Multi-Track Cases

In multi-track litigation, the position is more flexible, and ADR-related costs are more likely to be recoverable, subject to assessment.

Where a standard costs order is made (for example, “costs in the case” or “costs to the successful party”), the receiving party may seek to recover:

• Mediator fees
• Preparation time
• Attendance at the mediation
• Associated solicitor and counsel costs

However, recovery is not guaranteed. On detailed assessment, recovery may be subject too:

• Whether the mediation was reasonable to pursue
• Whether the sums claimed are proportionate to the value and complexity of the dispute
• Whether the process contributed meaningfully to resolution

Costs that are excessive, duplicative, or incurred too early have a considerable likelihood of being reduced.

 

The Role of Costs Budgeting

In multi-track cases subject to costs management, ADR expenditure should be addressed adequately within the costs budget.

If mediation is anticipated, parties should:

• Include those costs within the relevant phase (often the “ADR/settlement” phase)
• Ensure the figures are realistic and proportionate

Failure to do so may create difficulties on recovery, particularly where incurred costs exceed approved figures.

 

Mediation Costs in Fixed Recoverable Costs Cases

The position of recoverable mediation costs is significantly more restrictive in fixed recoverable costs regimes.

Under these schemes:

• Recovery is limited to prescribed fixed fees
• Additional ADR expenditure is not usually recoverable, even if reasonably incurred

This applies across many claims on the intermediate track and other lower-value cases. As a result, parties will often bear their own costs of mediation regardless of the outcome. While mediation may still reduce overall exposure, it will not usually translate into recoverable sums.

 

Mediation and Conduct: Costs Consequences

Even where ADR costs themselves are not fully recoverable, the decision to engage, or refuse to engage, in mediation can also pose significant cost consequences. The court may penalise a party that has unreasonably refused to mediate, depart from the usual costs order on the basis of conduct, or reduce or disallow the recovery of legal costs altogether.

In that sense, mediation has an indirect but potentially substantial impact on overall costs recovery, often outweighing the question of whether the costs of the process itself are recoverable.

From a strategic perspective, parties should ensure that their position is properly documented throughout. This includes recording any invitations to mediate, clearly setting out the reasons for any refusal, and demonstrating that the proposed mediation process was proportionate in the context of the dispute.

 

Practical Considerations for Litigators

From a costs perspective, mediation should be approached with both recovery and risk in mind.

Key considerations for legal professionals include:

• Whether ADR costs are likely to be recoverable in the relevant track
• How those costs will be treated on detailed assessment
• Whether the expenditure is proportionate to the claim value
• The potential adverse costs consequences of refusing ADR

In many cases, the costs protection benefits of engaging in mediation outweigh the risk of non-recovery of the mediation fees themselves.

 

In Summary

Mediation costs can be recoverable in litigation, but only in limited and fact-specific circumstances. Recovery is most likely in multi-track cases, subject to proportionality and assessment, and far less likely in fixed recoverable costs regimes.

Crucially, the costs consequences of refusing mediation may be more significant than the recoverability of the costs themselves. For litigators, the key issue is not simply whether mediation costs can be recovered, but how decisions around ADR influence overall costs exposure and recovery.

 

Need Advice on Recovering Mediation Costs?

As this article highlights, the recoverability of mediation costs is rarely straightforward. The key issue is often not just whether those costs can be recovered, but how mediation decisions influence overall costs exposure, conduct arguments, and the outcome on detailed assessment.

At Greener Costs, we regularly advise solicitors and litigators on the recovery and challenge of ADR-related costs, including how mediation is treated within costs budgets and on assessment.

If you are dealing with a matter where mediation has taken place, or is being considered, and need clarity on costs recovery or risk, we can assist.

Contact our team to discuss your matter:

• 📧 Email: info@greenercosts.co.uk
• 📞 Telephone: 01204 263047

 

FAQ: Mediation Costs in Litigation

Are mediator fees recoverable as part of legal costs?

Mediator fees may be recoverable in multi-track cases if they are considered reasonable and proportionate, but they are not automatically allowed on assessment.

Can mediation costs be claimed in fixed recoverable costs cases?

Generally no. In fixed costs regimes, recovery is limited to prescribed fees, and ADR costs are usually borne by the parties.

Do mediation costs need to be included in a costs budget?

Yes. In costs-managed cases, anticipated ADR costs should be included in the costs budget to maximise the prospects of recovery.

What happens if a party refuses mediation?

An unreasonable refusal to mediate can lead to adverse costs consequences, including reduced recovery or an unfavourable costs order.