Do I have to try mediation, and who pays the legal costs?

The duty to consider settlement

Since 1 April 2022, the parties to a dispute, not just their lawyers, have a duty to consider resolving it amicably, both before a case starts and while it runs. Before starting a claim, a party is expected to make an offer of amicable resolution, such as an offer to settle or to mediate, unless there are reasonable grounds not to.

A party that refuses an offer may be asked to give its reasons in a sealed document, which the court opens only when it decides costs. The court can also direct the parties to attempt amicable resolution.

Mediation

Mediation is a confidential process where a neutral mediator helps the parties reach their own agreement. It is available through the Singapore Mediation Centre and through the courts' own dispute resolution services. A settlement reached at mediation is a binding agreement, and can in some cases be recorded as a court order and enforced like a judgment.

Who pays the legal costs

Costs are at the court's discretion, but the usual rule is that the losing party is ordered to pay the winning party's costs. In practice, the amount ordered rarely covers everything the winner spent on lawyers, so the winner usually recovers only part of its costs.

Conduct matters. A party that refuses a reasonable offer, drags out the case or runs hopeless arguments may receive a worse costs order, or lose some of its costs, even if it wins. In the Small Claims Tribunals, lawyers cannot appear and legal costs are not usually awarded.