The decision of Lodhia v Twelve Trees Management Company (Bromley-by-Bow) Ltd & Ors is, on one level, a sprawling and highly unusual costs judgment arising out of discontinued defamation proceedings in the Media and Communications List. Yet beneath the procedural complexity lies a useful and timely illustration of the modern judicial approach to mediation, ADR conduct and costs consequences.
For mediators, litigators and judges alike, the case demonstrates an increasingly clear judicial message: parties are expected to engage genuinely with alternative dispute resolution, but mediation cannot be used as a tactical shield against proper case management or adverse costs consequences.
The claim arose from a dispute between a leaseholder and management entities connected with a residential estate in East London. Proceedings were brought in defamation and malicious falsehood following publication of a newsletter criticising the claimant’s conduct in relation to service charge disputes and related litigation activities. The litigation then expanded dramatically, generating multiple applications, amendments, postponement requests, disputes over evidence, and ultimately discontinuance shortly before trial.
Although the judgment principally concerns costs following discontinuance, mediation featured repeatedly throughout the procedural history.
One of the more striking aspects of the case is the court’s treatment of an application for a stay of proceedings to facilitate mediation. The claimant sought a stay until September 2026 on the basis that mediation should take place. However, the court refused the application. Steyn J accepted that the defendants were willing “in principle” to engage in mediation, but concluded that this did not justify halting the litigation given the history of delay, adjournments and procedural disruption already affecting the proceedings.
That distinction is important. The judgment reflects a developing judicial approach whereby courts actively encourage mediation whilst simultaneously resisting attempts to use ADR as a reason to derail orderly progress of litigation. The modern position is no longer one of simple encouragement at any cost. Rather, the courts increasingly expect mediation to sit alongside robust case management, not replace it.
Mr Justice Linden’s later costs judgment reinforces this approach. The claimant sought to avoid the normal costs consequences flowing from discontinuance under CPR 38.6 by arguing, amongst other things, that:
- the defendants had failed properly to engage with mediation;
- settlement proposals had been rejected;
- and the defendants had behaved unreasonably in relation to ADR.
The court rejected those submissions.
Importantly, the judge specifically noted that the defendants had in fact been prepared to engage in mediation and had engaged with proposals for ADR, even though agreement could not ultimately be reached as to the terms of mediation or settlement. That finding proved significant when considering whether the usual costs consequences of discontinuance should apply.
The judgment therefore provides a practical reminder that courts are not merely interested in whether mediation was mentioned. They are examining whether parties engaged constructively, realistically and proportionately with ADR opportunities.
The decision also demonstrates the limits of relying on mediation conduct as a costs shield where the broader litigation conduct is problematic. Throughout the judgment, the court focused heavily upon the claimant’s procedural conduct, including repeated adjournment applications, abandoned claims, changes of position and disputes concerning evidence. Against that background, mediation arguments carried relatively little weight.
This is consistent with the wording of CPR 44.2 and CPR 44.4. ADR conduct forms part of the overall discretionary costs exercise; it is rarely determinative in isolation. A party cannot ordinarily expect to escape adverse costs consequences merely by pointing to mediation proposals if the court considers that party’s wider conduct unreasonable.
The judgment also illustrates the increasingly sophisticated judicial understanding of ADR dynamics. Historically, parties sometimes assumed that simply proposing mediation would provide significant costs protection. Modern courts appear more willing to analyse:
- the timing of ADR proposals;
- whether proposals were genuine or tactical;
- whether parties were truly engaging with settlement possibilities;
- and whether ADR applications were being deployed to create delay or procedural advantage.
That trend can be seen across multiple divisions of the High Court and reflects the wider post-Churchill v Merthyr Tydfil CBC landscape, where courts possess greater confidence both in encouraging ADR and in scrutinising parties’ conduct surrounding it.
Perhaps the most significant lesson from the case is therefore one of balance.
The courts are plainly pro-mediation. Indeed, the judgment repeatedly recognises the importance and relevance of ADR conduct. However, the courts are equally concerned with efficiency, proportionality and procedural discipline. Mediation is encouraged, but it is not treated as an automatic justification for adjournments, stays or immunity from costs consequences.
For practitioners, the practical implications are clear:
- ADR proposals should be genuine, timely and workable;
- mediation should not be advanced merely as a tactical response to litigation difficulties;
- parties should engage constructively with reasonable proposals;
- and where litigation conduct overall is poor, mediation arguments alone are unlikely to rescue a party on costs.
Viewed in that way, the case serves as a useful illustration of the modern relationship between mediation and litigation. ADR is no longer peripheral to the civil justice system. It is central to it. But with that centrality comes scrutiny. Courts are increasingly prepared to examine not simply whether parties mentioned mediation, but how, when and why they engaged with