A recent case casts light on the Courts’ approach to penalising parties who do not respond to invitations to mediate.
Proposing mediation (and replying properly): the costs lesson from
Gable Insurance AG (in liquidation) v Dewsall & Ors
[2025] EWHC 3399 (Ch)
Why this judgment matters
Deputy Judge Robin Vos was dealing with reserved costs after a substantial piece of Business & Property Court litigation involving (among other things) freezing orders, a search order, and disputes about the proceeds of sale of Weald Hall. A key issue was how the court should reflect party conduct—including ADR engagement (or silence)—when deciding costs under CPR 44.2.
The judgment is a practical reminder of two linked propositions:
- Courts can and do penalise unreasonable ADR conduct in costs, including failure to engage or respond.
- But “ADR conduct” is judged in context: the clarity of the invitation, the realistic utility of mediation for that party, and who it was really directed at can make all the difference.
Background in brief (and the scale of costs)
The wider proceedings were brought by the liquidators of Gable Insurance AG (GIAG) against multiple defendants. The underlying claim concerned alleged misappropriation of very significant sums (reported publicly at c. £12m+), with the main trial judgment handed down on 5 September 2025.
By the time of this costs decision (handed down 23 December 2025), the court was dealing with:
- the costs of GIAG’s claim against Mrs Judith Dewsall (she succeeded overall on the claim against her); and
- reserved costs for major interim steps—especially the search order and freezing orders.
The figures show why the costs stakes were so high. The judgment records GIAG’s search order-related costs (excluding the bench warrant application) at around £4.8m, very roughly broken down as:
- obtaining the search order: ~£410k
- executing it: ~£850k
- post-execution steps (privilege/relevance review etc.): ~£3.56m
So when a party argues “you didn’t respond to mediation—reduce their costs”, the court is not talking about a trivial margin.
The mediation point: what the court was asked to do
GIAG accepted Mrs Dewsall was the “successful party” on the claim against her, but argued her costs should be reduced (25–40%) due to conduct, including failure to engage in ADR / respond before she was joined.
The court refused to reduce Mrs Dewsall’s recoverable costs on that basis. The reasoning is the real takeaway.
Why
non-response
can trigger costs penalties (the general rule)
Under CPR 44.2, the court considers “all the circumstances”, including conduct. That routinely includes ADR conduct.
The modern authorities make the point sharply:
- In PGF II SA v OMFS Company 1 Ltd [2013] EWCA Civ 1288, the Court of Appeal treated silence in the face of a serious mediation proposal as itself capable of being unreasonable conduct, justifying a costs sanction.
- In Churchill v Merthyr Tydfil CBC [2023] EWCA Civ 1416, the Court of Appeal confirmed courts have power, in principle, to stay proceedings / require engagement in non-court dispute resolution where proportionate and consistent with a fair trial.
Put simply: ignore ADR at your peril—and “we said nothing” is often worse than “we said no, for reasons”.
Why there was
no ADR costs penalty
here (and the rationale)
Although the judge accepted in principle that failure to engage in ADR might be penalised, he found it not sufficiently unreasonable on the facts to justify cutting Mrs Dewsall’s costs.
The key reasons (all practical):
1) The invitation wasn’t clearly aimed at
her
, as a dispute in her own right
The principal ADR letter (17 January 2024) was framed around exploring resolution with Mr Dewsall, and asked solicitors to discuss with both Mr and Mrs Dewsall. The court treated that as materially different from a clear proposal to mediate the specific claim against Mrs Dewsall.
2) Timing: she didn’t yet know the case against her
When the January letter went, she was not fully aware of the nature of the claim against her; draft amended Particulars followed later. That dulled the force of any criticism that she personally failed to engage.
3) Proportionality: it was unrealistic to expect “standalone” mediation against her
The judge held that, given the limited nature of the claim against Mrs Dewsall in the overall litigation picture, it was unrealistic to expect her to engage in mediation in isolation. In substance, the real onus to respond lay with the principal defendant.
4) The court still noted she “should have responded”… but that didn’t cross the threshold
This is the nuance: the court did not endorse silence as good practice. It simply found that, in context, her non-response wasn’t sufficiently unreasonable to justify a costs haircut.
The consequences in this case (what orders flowed from the overall costs exercise)
Because the judgment is a costs “consequentials” decision, it’s rich in outcomes. The headline results recorded include:
- Mrs Dewsall recovered her costs of the claim against her on the standard basis (GIAG’s requested reduction refused).
- Mr Dewsall faced indemnity costs in several places (e.g., first freezing order; search order) reflecting conduct well “out of the norm”.
- The search order costs were treated differently depending on party roles:
- Mr Dewsall: GIAG’s search order costs on the indemnity basis (with the very large £4.8m spend in play).
- Horatio: GIAG’s search order costs on the standard basis.
- Mrs Dewsall: no order as to costs as between her and GIAG on the search order—reflecting overall justice: she won at trial, the search order primarily targeted Mr Dewsall, but her disclosure had also been incomplete.
And importantly for “responding properly” as a wider conduct lesson: the court also reduced costs where a party’s procedural choice was heavy-handed (bench warrant route), showing that how you litigate (not just whether you “win”) can move the costs dial.
Practical drafting lessons: how to propose mediation so you can rely on it later
1) Make the proposal
party-specific
If there are multiple defendants (or mixed claims), spell out clearly:
- Which claims/issues you want mediated (e.g., tracing claim to Weald Hall; disclosure issues; quantum; settlement structure).
- Whether you are proposing a global mediation or inviting a specific party to mediate their part only.
Why it matters: in this case, the ADR letter’s emphasis on mediating “with Mr Dewsall” weakened the argument that Mrs Dewsall’s silence should cost her money.
2) Include the essentials that show it was a “serious invitation”
A “serious” invitation (the kind courts expect a response to) usually includes:
- a proposed mediator / shortlist (or nominating body)
- proposed timing window
- format (in person / remote; 1 day; position statements)
- cost sharing proposal
- what documents/information will be available (so the other side can assess usefulness)
This is what makes any later “they ignored mediation” argument more persuasive under the PGF II line.
3) Put a clear “reply by” date—and say why
Set a reasonable deadline (often 7–14 days in commercial cases) and state you will draw any failure to respond to the court on costs.
That is exactly the kind of structure that turns silence into a costs risk under PGF II.
Practical response lessons: how to reply without storing up a costs problem
Best practice response (even if you think mediation is pointless)
- Acknowledge promptly.
- Say yes / no / “not yet”—but do not say nothing.
- If “no” or “not yet”, give short, case-specific reasons (e.g., need for disclosure first; pending application; lack of information), and propose an alternative:
- mediation after exchange of X documents
- a without-prejudice meeting
- ENE
- a narrow issues mediation
This approach is consistent with the modern judicial emphasis on ADR engagement (and avoids the “silence” trap).
If you’re one of several parties, be explicit about
scope
If you’ll only mediate on a “global” basis, say so. If you’ll mediate only your part, say so. Otherwise you risk later argument about whether you were refusing reasonably or simply stonewalling.
The core lesson from
[2025] EWHC 3399 (Ch)
on ADR correspondence
This case shows a court will ask, very concretely:
- Was the mediation proposal clearly directed at this party and this claim?
- Was it realistic and proportionate to expect them to mediate separately?
- What did the proposal actually say, and what did the party know at the time?
If your invitation is clear and your opponent stays silent, you are much closer to the PGF II territory of costs consequences. If the invitation is broad/ambiguous, you may struggle to turn the other side’s non-response into a meaningful costs penalty—exactly what happened here.