What the 2026 CPR and Court Push for Mediation Mean for Commercial Disputes in the UK, a Practical Guide for Litigators and In‑house Counsel

Last updated: 14 May 2026

Commercial mediation in the UK has shifted from a negotiation tactic parties could comfortably ignore to a case‑management reality that judges actively enforce. Amendments to the Civil Procedure Rules (CPR) that took effect on 1 October 2024 embedded the promotion of alternative dispute resolution (ADR) as a core objective of court case management, giving judges explicit tools to order parties into mediation. Through 2025 and into 2026, Commercial Court, Technology and Construction Court (TCC), and Circuit Court judges have exercised those powers with increasing regularity, reshaping the costs landscape for any party that refuses to engage.

This guide provides litigators and in‑house counsel with the decision framework, tactical checklists, costs‑risk scenarios, and sample drafting they need to navigate commercial mediation in the UK as it operates today.

Can Courts Order Commercial Mediation in the UK? The Practical Legal Position

Yes, since 1 October 2024, courts in England and Wales possess express procedural authority to order parties to engage in mediation or another form of ADR. The practical question is no longer whether the power exists but how readily judges will use it and what happens if a party refuses. Industry observers expect the frequency of court‑ordered mediation to continue rising throughout 2026 and beyond.

The Rule Changes: CPR Amendments Effective 1 October 2024

The CPR amendments introduced on 1 October 2024 made several structural changes that embed ADR into the fabric of civil litigation:

• Overriding objective expanded. The overriding objective in CPR Part 1 now expressly references the promotion of ADR as part of dealing with cases justly and at proportionate cost.
• Active case management duties broadened. CPR Rule 1.4 duties on active case management were amended to include encouraging and facilitating ADR, giving judges a clear textual hook to direct mediation at any case management conference (CMC).
• Directions questionnaires and case management. Practice Directions were updated so that directions questionnaires require parties to state their position on ADR, silence or blanket refusal can now attract judicial scrutiny.

The Chartered Institute of Arbitrators described these amendments as a “historic moment” for ADR in England and Wales, while Norton Rose Fulbright’s analysis noted the changes “reflect courts’ power to compel ADR” and remove lingering doubt about judicial authority.

Leading Case Law: Churchill and the Court of Appeal

The Court of Appeal’s decision in Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 was the judicial catalyst. The court held that judges do have the power to order parties to engage in a non‑court‑based dispute resolution process, provided the order does not impair the claimant’s right of access to the court. The CPR amendments that followed in October 2024 codified this principle into procedural rules, giving it daily operational force.

Key takeaway: The combination of Churchill and the October 2024 CPR mediation changes means the court’s power to order mediation is now both judicially endorsed and procedurally embedded, treat it as a standing litigation risk.

When Judges Will (and Won’t) Order Mediation, Realistic Thresholds

Not every case will attract a mediation direction, but the threshold for doing so has dropped considerably. Understanding the factors judges weigh helps litigators anticipate orders and advise clients accordingly.

Factors Judges Consider

• Proportionality. The value of the claim relative to likely trial costs is the single strongest driver. Where projected costs approach or exceed 30–40 % of the sum in dispute, early indications suggest judges are highly likely to direct mediation.
• Complexity and number of issues. Multi‑issue commercial disputes, particularly those involving multiple contracts or cross‑claims, are seen as strong candidates because mediation allows creative, global settlements that a court cannot impose.
• Previous ADR engagement. A party that can demonstrate genuine previous attempts to settle (Part 36 offers, without‑prejudice discussions, prior mediation) is less likely to face a further order. Conversely, parties that have made no effort to engage face acute exposure.
• Stage of proceedings. Orders are most common at the first CMC or following disclosure, when the issues are sufficiently crystallised but trial costs have not yet been incurred. However, pre‑trial mediation directions are also made, particularly in the TCC and Commercial Court.

Grounds for Resisting an Order

Resistance is possible but narrow. The following grounds have attracted judicial sympathy:

1. The dispute raises a novel point of law requiring a binding precedent.
2. There is evidence of fraud, duress, or illegality that must be adjudicated.
3. A previous mediation on the same issues has already taken place and failed.
4. Urgency, for example, the need for an interim injunction, makes delay impractical.
5. One party lacks the capacity or authority to settle.

Key takeaway: Judges weigh proportionality and previous conduct most heavily; blanket refusals without reasoned grounds are increasingly penalised through costs.

Costs Consequences of Refusing Mediation, Scenarios and Practical Exposure

The costs consequences of refusing mediation are the enforcement mechanism that gives the CPR mediation changes real teeth. A party that unreasonably refuses or ignores a mediation direction risks losing its entitlement to costs, even if it wins at trial. Costs sanctions can include an order for indemnity costs against the refusing party, deprivation of part or all of its costs recovery, or an adverse order requiring payment of the other side’s costs for a specified period.

How Courts Assess “Unreasonable Refusal”

Courts draw on the principles established in Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576 and refined in post‑Churchill practice. Factors include whether the refusal was reasoned and communicated in writing, whether the party engaged constructively with the mediation proposal, and whether the party had reasonable prospects of success that might justify refusal. The LexisNexis practice note on costs sanctions for refusal to mediate sets out these factors in a structured checklist that practitioners should consult when advising clients.

Preparing Costs Evidence and Offers

To insulate against costs sanctions, the practical step is to create a contemporaneous paper trail:

• Respond to any mediation proposal in writing, giving specific reasons if declining.
• Make a Part 36 offer or Calderbank offer before or alongside the mediation process.
• Record all without‑prejudice communications (while respecting privilege) so that the court can be addressed on costs at trial.
• If you accept mediation but it fails, retain the mediator’s confirmation of attendance and good‑faith participation.

Sample Costs Risk Scenarios

Key takeaway: The costs consequences of refusing mediation are no longer theoretical, they are routinely considered at costs hearings, and the paper trail you create now determines your exposure later.

Preparing for a Court‑Ordered Commercial Mediation, 10‑Point Checklist

Effective preparation is the single biggest predictor of mediation success. Preparing for mediation in commercial disputes requires the same rigour as trial preparation, but with a different strategic lens focused on settlement ranges, commercial interests, and creative deal structures rather than purely legal merits.

The 10‑Point Pre‑Mediation Checklist

1. Secure full authority. The person attending must have unconditional authority to settle up to an agreed maximum. If board or committee approval is needed, obtain it in advance, mediations collapse when attendees must “take instructions.”
2. Prepare a concise position statement. Typically 5–10 pages plus key documents. Focus on the facts, the legal issues in dispute, and your settlement range, not a rehearsal of your trial skeleton.
3. Assemble the mediation bundle. Include the statements of case, key correspondence, any Part 36 or Calderbank offers (redacted as appropriate), and a chronology. Agree the bundle with the other side where possible.
4. Define your settlement range. Set a realistic best case, target, and walk‑away figure. Ensure the client understands the difference between legal entitlement and commercial outcome.
5. Identify non‑monetary terms. Many commercial mediations settle on terms a court could never order: future supply agreements, apologies, licence amendments, or phased payment plans. Map these before the day.
6. Brief witnesses strategically. Decide whether a key witness will attend (for credibility in a joint session or to answer the mediator’s questions in private) and prepare them accordingly.
7. Understand confidentiality boundaries. Agree with your client what can be disclosed to the mediator in confidence and what can be shared in joint sessions.
8. Draft a skeleton settlement agreement. Arrive with a template agreement covering the core terms so that, if settlement is reached, it can be executed before parties leave the building.
9. Prepare a costs schedule. Have an up‑to‑date summary of costs incurred and estimated future costs ready, this powerfully concentrates minds during negotiation.
10. Agree logistics early. Confirm the venue, timing (full day or half day), number of rooms required, and whether remote participation is needed for any party or decision‑maker.

Mediation Logistics and Costs

Understanding the commercial parameters helps in‑house counsel budget and set expectations.

• Duration. Most commercial mediations in the UK last a full day (approximately 8–10 hours). Complex multi‑party disputes may require one and a half to two days. Some lower‑value disputes can be resolved in a half‑day session.
• Mediator fees. Day rates for experienced commercial mediators typically range from £3,000 to £10,000 plus VAT, depending on the mediator’s seniority and the complexity of the dispute. Fees are usually split equally unless the parties agree otherwise.
• Venue costs. Dedicated mediation suites in London range from £500 to £2,000 per day. Many mediators and providers such as CEDR include a venue in their fee package.
• Adviser costs. Each party’s legal costs for preparation and attendance typically range from £5,000 to £25,000 for a one‑day commercial mediation, depending on the value and complexity of the dispute.

Sample pre‑mediation timeline (large commercial dispute):

Key takeaway: Preparation wins mediations, arrive with full authority, a realistic range, a drafted settlement template, and a current costs schedule.

Tactical Playbook for Litigators and In‑House Counsel

Mediation strategy for litigators differs fundamentally from trial advocacy. The objective is not to win an argument but to shift the other party’s perception of risk sufficiently to close a deal. The best mediation best practice in the UK combines rigorous legal analysis with commercial pragmatism.

Opening Position and Staged Offers

Resist the temptation to open at your walk‑away figure. A staged approach creates momentum:

1. Opening joint session. Use this to set tone, not to attack. A brief, factual summary of your strongest points, delivered calmly, is more effective than a combative opening.
2. First offer. Anchor high (or low, depending on your role) but within a range that the other side will engage with. An offer that is dismissed as absurd kills momentum.
3. Midday recalibration. After two or three rounds, reassess your position with the mediator in private. Experienced mediators will give a reality check, listen to it.
4. Conditional movement. Tie later concessions to reciprocal movement: “We will move to X if they move to Y.” This avoids unilateral concession fatigue.
5. Closing pressure. Late in the day, a well‑timed “final offer” with a short time limit can break deadlock, but only if it is genuinely credible.

Multi‑Party and Multi‑Contract Disputes

Commercial disputes involving three or more parties, or multiple contracts within a single relationship, require additional tactical layers:

• Map the relationships. Identify which pairs of parties can settle bilaterally and which issues require a global resolution. A mediator may run parallel bilateral sessions before convening the group.
• Use contribution and indemnity dynamics. In multi‑party construction or supply‑chain disputes, one party’s willingness to contribute often triggers cascading settlements. Position your client to benefit from this dynamic rather than being the holdout.
• Consider a “mediator’s proposal.” In deadlocked multi‑party cases, the mediator may offer a confidential proposal to all parties simultaneously. Each party accepts or rejects without knowing the others’ response. If all accept, the deal is done. This mechanism removes the risk of being seen to concede first.

When Mediation Fails: Next Steps

If mediation does not produce a settlement, it is not wasted. The likely practical effect will be that both parties leave with a clearer understanding of the other’s position, which frequently leads to settlement in the weeks following the mediation. Tactical next steps include:

• Make a Part 36 offer within 14 days of a failed mediation, while the other side’s risk perception is freshly calibrated.
• Retain the mediator’s confirmation of attendance and good‑faith engagement, this is your costs‑protection evidence.
• Brief the client that approximately 70 % of mediated commercial disputes settle either on the day or within 28 days of the mediation, according to CEDR’s audit data.

Key takeaway: The mediator is a tool, not a judge, use staged offers, conditional concessions, and post‑mediation follow‑up to maximise settlement probability.

Drafting and Ensuring Enforceability of Settlement Agreements

An enforceable settlement agreement in the UK is a binding contract, provided it meets standard contractual requirements: offer, acceptance, consideration, intention to create legal relations, and sufficient certainty of terms. Mediated settlements are not automatically enforceable as court orders, however, the method of recording the agreement determines the enforcement route.

Key Clauses to Include

• Payment mechanics. Specify the amount, currency, payment date(s), bank account details, and consequences of late payment (including interest rate and the right to enter judgment).
• Confidentiality carve‑outs. Standard confidentiality clauses should carve out disclosures required by law, regulation, or court order, and disclosures to professional advisers.
• Jurisdiction and governing law. Even in a purely domestic mediation, expressly state English law and the jurisdiction of the courts of England and Wales.
• Full and final settlement clause. Specify precisely which claims, counterclaims, and cross‑claims are being released.
• “Liberty to apply” clause. If terms require future performance (e.g., phased payments), include a mechanism to return to court if a party defaults.

Tomlin Order vs Standalone Settlement Agreement

The choice of vehicle matters for enforcement:

• Tomlin order. A court order that stays proceedings on agreed terms set out in a schedule. Breach of the scheduled terms can be enforced by applying to the court for the stay to be lifted, a faster and cheaper enforcement route than issuing fresh proceedings. This is the preferred vehicle where court proceedings are already on foot.
• Standalone settlement agreement. Appropriate where no proceedings have been issued or where the parties prefer complete confidentiality (a Tomlin order is a court document, albeit the schedule is not publicly available). Enforcement requires issuing separate breach‑of‑contract proceedings.

Sample Enforceable Settlement Clause

The following is a simplified template for illustrative purposes only. It should be adapted by qualified legal counsel to the specific dispute.

“In full and final settlement of all claims, counterclaims, and cross‑claims between the parties arising out of or in connection with [describe dispute/contract], the Defendant shall pay to the Claimant the sum of £[amount] within [number] days of the date of this agreement. Upon receipt of such payment, the Claimant shall file a notice of discontinuance / the parties shall apply for a Tomlin order in the form annexed hereto. This agreement is governed by English law and the parties submit to the exclusive jurisdiction of the courts of England and Wales.”

Key takeaway: Always draft the settlement agreement before the mediation day, under time pressure at 10 pm, errors creep into hastily drafted terms, and disputes about enforceability follow. For a deeper look at structuring complex dispute resolution clauses in contracts, see our dedicated analysis.

Resisting a Mediation Order, Grounds and Sample Pleading Points

While the CPR mediation changes strongly favour engagement, parties retain the right to resist a mediation order on proper grounds. The key is to frame the objection as principled and evidenced rather than as a blanket refusal.

Valid Grounds

• Precedent necessity. The dispute raises a genuinely novel point of law that requires a binding judicial determination in the public interest.
• Fraud or illegality. Allegations of fraud, dishonesty, or illegality that must be adjudicated, mediation cannot make findings of fact.
• Previous failed mediation. The same issues were mediated previously and the process failed without any material change in circumstances.
• Urgency. Interim relief (injunction, freezing order) is required before mediation could be completed.
• Disproportionate costs of mediation. In rare, very low‑value cases, the costs of a formal mediation may exceed the likely recovery.

Sample Skeleton Argument Wording

For illustrative purposes only:

“The Defendant respectfully submits that a mediation direction would not be appropriate at this stage for the following reasons: (1) The claim raises a novel question of statutory construction under [Act/section] on which there is no binding authority, and determination by the court will provide clarity for the wider industry. (2) A mediation on substantially the same issues took place on [date] and did not result in settlement. No material change of circumstances has occurred since. (3) The Defendant has, in any event, engaged constructively with ADR by making a Part 36 offer on [date], which remains open for acceptance.”

Courts are unlikely to accept vague assertions that “mediation would not be productive.” Any resistance should be supported by evidence (correspondence, prior mediation records, and a clear explanation of why the timing or nature of the dispute makes mediation inappropriate).

Key takeaway: Resist only with documented, specific grounds, blanket refusals are the fastest route to adverse costs orders.

Timeline of Key CPR and Judicial Developments for Commercial Mediation in the UK

Conclusion: Commercial Mediation in the UK Is No Longer Optional in Practice

The combined effect of Churchill, the October 2024 CPR amendments, and evolving judicial practice through 2025–2026 is clear: commercial mediation in the UK has become a near‑mandatory stage in commercial litigation. Litigators who treat it as a box‑ticking exercise, or worse, refuse to engage, expose their clients to substantial costs penalties and waste the opportunity for creative, commercially driven resolutions. For in‑house counsel, the message is equally direct: budget for mediation early, empower your legal team with full settlement authority, and invest in preparation.

The practitioners who thrive in this environment are those who approach mediation with the same strategic intensity they bring to trial. The checklists, drafting templates, and tactical frameworks in this guide provide a starting point. For a broader historical perspective on how mediation has developed as a dispute resolution tool, explore our overview of the evolution of mediation. Those interested in how other European jurisdictions are handling similar pressures will find our analysis of mandatory mediation models across Europe instructive.

To connect with experienced mediators and mediation lawyers across the UK, visit the Global Law Experts lawyer directory.

Sources

1. Civil Procedure Rules, legislation.gov.uk
2. Judiciary of England and Wales
3. Norton Rose Fulbright, Changes to CPR to reflect courts’ power to compel ADR
4. Doughty Street Insights, Mediate now or be told to do so
5. LexisNexis, Costs sanctions for refusal to mediate
6. CIArb, Historic moment as CPR changes embed promotion of ADR
7. CEDR, Commercial mediation services
8. Harper James, Guide to commercial mediation
9. Ashurst, Quickguide: commercial mediation