Litigation is an expensive process which is why the courts encourage parties to try to settle their disputes. The Civil Procedure Rules (the court procedural rules that govern civil cases) set out the steps which the parties must take before proceedings are issued. These are known as “Pre-Action Protocols”. The aim of the Protocols is to encourage parties to try and settle their claims and avoid court proceedings if at all possible.
Even after proceedings have been issued the Court will expect the parties to continue to talk to each other to try and settle their dispute before the matter reaches trial. This process is known as Alternative Dispute Resolution (“ADR”). ADR can involve the parties and their legal representatives holding “without prejudice” discussions/meetings or it could be a more formal process whereby the parties appoint an independent mediator to assist them in negotiating their dispute to achieve a resolution.
The importance attached by the Court to ADR was highlighted in the case of Bristow v The Princess Alexander Hospital NHS Trust. That was a clinical negligence case which had settled but the parties could not agree on the amount of the Claimant’s costs which should be paid by the NHS Trust so the matter proceeded to Detailed Assessment, a process whereby the Court determines the amount of costs that the winning party is entitled to recover from the losing party.
During the Detailed Assessment proceedings there was a request that the parties should engage in mediation. However the NHS Trust refused to mediate because it claimed that the parties were “so far apart”.
However, this argument was wholly unattractive to the Court. The Costs Judge found that the NHS Trust had not given any reasonable reason why they had refused to engage in mediation (being “so far apart” was not sufficient justification for not mediating) and he was satisfied that there should be a sanction for that refusal. That sanction was that the NHS Trust had to pay the Claimant’s costs of the Detailed Assessment proceedings on an indemnity basis for the whole of those proceedings and not just from the date when they had refused to mediate. Usually, the losing party would have to pay the winning party’s costs on the “standard” basis. Under this rule, any queries concerning the winning party’s bill of costs is resolved in favour of the losing party but under the “indemnity” basis any query is resolved in favour of the winning party. Therefore the winning party would recover far more of his costs under the Indemnity basis.
Although this case related to costs proceedings, it applies to litigation in general. It is clear that the courts will punish those who fail to attempt ADR. Often the reasons for refusing are the costs associated with mediation, especially when it is considered that a settlement is unlikely to be reached. However, in view of the above case the question which litigants will need to consider is whether the costs of attempting mediation outweigh the potential costs of refusing to do so.
If you are involved in any dispute and require assistance then please contact Luke Patel on 0113 227 9316 or by email at “LPatel@LawBlacks.com”.