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The Judge leans forward, smiles and then waves his little wand: "Mediate … go away and mediate …" Softly, his magic dust settles on shoulders, at edges of nostrils, some even goes right up noses. In litigation it is called "active case management". It includes "encouraging the parties to use an alternative dispute resolution procedure if the court considers that appropriate" and "facilitating the use of such a procedure", and loads of times the magic dust works. The judge gives an ADR order and builder and customer make tracks to visit the mediator like an estranged couple taking marriage guidance.

But since this new-fangled idea has been in our midst, some have refused to mediate. Instead they have simply got on with the litigation and, damn it, won hands down in court. Then, quite rightly, they have applied for the litigation costs against the loser only to be told "Dear me, you refused to mediate, so you can't have your costs". The Court of Appeal in Halsey vs Milton Keynes General NHS Trust (11 May 2004) has had a good look at all that.

It decided that you can refuse to mediate when big ifs and buts apply. So, here in the Court of Appeal decision is a useful guide to what might be sound excuses not to mediate.

First reason: the nature of the dispute. Mediation is no good when the whole object of the litigation is to determine an issue of law. In other words, "A" is seeking a binding pronouncement or declaration in a long-term, ongoing contract. Similarly where it is important to lay down a legal precedent. Mediation is no good when "A" has alleged fraud or commercially disreputable conduct. Nor when "A" wants to injunct "B".

Second reason: when the claimant's position is unreasonably weak and it is attempting to use mediation as a tactical ploy in a nuisance value action. It sometimes happens that a large company becomes a target for opportunistic claimants. The action is brought in the hope that the large firm will give something away during mediation.

Third reason: when a defendant has made, but had rejected, a reasonable offer or solution to a complaint. He is milking. But that game has to be plain enough to justify refusing to mediate.

Builder and customer make tracks to visit the mediator like an estranged couple taking marriage guidance

Fourth reason: the cost of mediating would be disproportionably high. Establish or forecast the costs of mediating, which are the mediator's costs and the costs to both sides. Compare that with the cost of the remaining build-up to the trial and trial itself.

Put simply, it may be better all round to simply head for trial. There must be at least a prospect of enjoying a significant saving in costs by running the mediation.

Fifth reason: if the prospect of mediation would delay the date set down for trial. Seems wrong to stop the programme.

Sixth reason: where mediation has little chance of success. Take for example the situation where "B" is so pig-headed, so obstinate, that he plainly will not co-operate or compromise. The bloke has become fanatical, perhaps spiteful, or is just stupid. Forget mediation. But my own tip even so is at least to try to get "B" to come. Remember the magic dust. The same goes for the totally wrong-headed claimant.

A stubborn complainer is a hopeless candidate for mediation. But try him, do try.