Refusal to Mediate Leads to Indemnity Costs in civil cases
Fernandez v Fernandez & Ors
[2025] EWHC 2373 (Ch)
A recent High Court judgment in Fernandez v Fernandez & Ors [2025] EWHC 2373 (Ch) offers a stark reminder of the risks of refusing to mediate.
In this bitter family dispute, the losing party not only failed in his appeal but was hit with an indemnity costs order, interest at 2% above base rate, and an immediate payment on account of £38,832 — all because, as the judge found, “it was patently obvious that [he] just did not wish to mediate.”
The Case Background
The appeal arose from an acrimonious dispute over the estates and family trust of the Fernandez parents. The appellant, Julian Lindsay Fernandez, had been removed as executor and trustee by District Judge Wales in December 2024, following complaints by his siblings Leessa and Graeme Fernandez.
Julian appealed that decision to the High Court in Bristol. His appeal was dismissed by HHJ Paul Matthews, sitting as a High Court Judge, on 22 September 2025. The judge’s subsequent costs judgment, handed down on 6 October 2025, addressed what should happen next — and it made sobering reading for the appellant.
The Refusal to Mediate
The respondents had made repeated and extensive efforts to arrange mediation. On 14 April 2025, they proposed 26 possible mediation dates — five in May and twenty-one in June. They chased for a response on 9 May and again on 8 June.
A holding response finally came on 13 June, and a substantive response only on 23 June — ten weeks after the original proposal — rejecting all 26 dates and saying mediation was unlikely before the hearing fixed for July.
HHJ Matthews was unimpressed:
“In my judgment, it is unacceptable to take so long to respond to the mediation offer and suggested dates, especially when the answer was No. … It is equally unacceptable not to be able to make some re-arrangement which would enable the parties to mediate on at least one of those 26 dates. … It is patently obvious that Julian just did not wish to mediate.”
The judge emphasised that there are cases where refusal to mediate may be reasonable — but this was not one of them:
“Of course, there are cases where it is reasonable not to mediate. But, in my judgment, this was not one of them.”
Citing Jackson LJ in Thakkar v Patel [2017] 2 Costs LR 233, he added:
“The message which the court sends out in this case is that in a case where bilateral negotiations fail but mediation is obviously appropriate, it behoves both parties to get on with it. If one party frustrates the process by delaying and dragging its feet for no good reason, that will merit a costs sanction.”
The Financial Consequences
Because Julian had not only lost the appeal but had unreasonably refused to mediate, the judge awarded the respondents their full costs on the indemnity basis.
Their statement of costs totalled £77,663.91 (including VAT), and the judge ordered a payment on account of £38,832 (50% of the total) to be made within 14 days.
He also awarded interest on those costs at 2% above bank base rate from the dates the invoices were paid until judgment, and he ordered that the costs be subject to detailed assessment if not agreed.
To make matters worse for Julian, the judge held that he was not entitled to recover any of his own costs from the estates or the trust, finding that his appeal had been pursued entirely in his personal interest:
“Julian conducted this appeal entirely in his own interest, and not at all in the interests of the estates or the trust. Accordingly, Julian’s costs, and those of the respondents that he is ordered to pay, were not properly incurred… and he is not entitled to an indemnity in respect of them.”
Indemnity Costs Justified by Conduct
HHJ Matthews found that several aspects of the appellant’s conduct justified indemnity costs — including:
- his refusal to mediate,
- his pursuit of irrelevant factual enquiries and unpleaded issues, and
- his over-elaborate and repetitive submissions.
“In my judgment, my conclusions on points (i), (ii) and (iv) amply justify an award of costs on the indemnity basis.”
The Court’s Message on ADR
This decision reinforces the judiciary’s increasingly robust stance on ADR engagement. The courts expect parties to mediate where appropriate — especially in family, trust, and estate disputes where emotions and costs can spiral.
As HHJ Matthews’ judgment shows, delay or refusal without reasonable justification will be treated as conduct “out of the norm” — with serious cost consequences.
The financial lesson could not be clearer:
Julian Fernandez’s refusal to mediate cost him not only the appeal but an immediate £38,832, an eventual bill approaching £80,000 plus interest, and no right to reimbursement from the estate funds.
Conclusion
Fernandez v Fernandez stands as a powerful cautionary tale. Mediation is no longer optional etiquette — it is a core component of responsible litigation conduct.
As HHJ Matthews made plain, it is “patently obvious” that the courts will not indulge parties who “just do not wish to mediate.”
The case underscores a consistent message from Halsey, PGF II, and Thakkar:
⚖️ Refuse to mediate at your peril — you may end up paying for it on the indemnity basis.
Citation:
Fernandez v Fernandez & Ors [2025] EWHC 2373 (Ch), HHJ Paul Matthews (Bristol Chancery Appeals, 6 October 2025).Refusal to Mediate leads to an indemnity costs order.