An unreasonable refusal to mediate is a relevant factor which a court may consider when deciding who should pay the costs arising out of a case. There have been a significant number of cases dealing with the issue in recent years.
In Murray and another v Bernard  EWHC 2395 (Ch) the claimants initially refused an offer by the defendant to mediate. However, during the course of the case, at an interim hearing, they were warned by a judge that their approach was a potentially a high risk strategy. The claimants then had a change of heart and accepted that they would mediate.
However, the mediation did not then happen because the defendant felt he was not ready. He said before mediation could take place he needed to prepare and also undertake additional steps relating to his defence, disclosure and witness statements. The claimants noted that these matters need not affect when mediation could take place – mediation is not a mini trial and can take place at any stage.
It was held that, on the facts, the reason why the mediation did not happen was due to the defendant and the court held that this was not a case in which it could be said that the claimants failed to mediate. Although the claimants originally refused to mediate, they had changed their minds. It was noted that this was not a game in which the claimants had only one opportunity to mediate for the purposes of the cost rule.
This case demonstrates that when it comes to mediation an initial refusal may not always result in adverse costs consequences. However, refusing to mediate remains a high risk strategy and the court has a wide discretion when it comes to costs recovery. Each case will depend on its own facts.