Extract from Lawtel: www.lawtel.co.uk :
NIGEL WITHAM LTD v (1) ROBERT LESLIE SMITH (2) JACQUELINE ISAACS (2008)
[2008] EWHC 12 (TCC)
QBD (TCC) (Judge Peter Coulson QC) 4/1/2008 CIVIL PROCEDURE - COSTS ALTERNATIVE DISPUTE RESOLUTION : COSTS : COSTS BETWEEN THE PARTIES : AGREEING TO ALTERNATIVE DISPUTE RESOLUTION : DELAYING AGREEMENT : COSTS CONSEQUENCES It was inappropriate to reduce successful parties' costs on the basis that they had failed to engage in mediation at an early stage in proceedings, as there was nothing to demonstrate that the parties had unreasonably delayed in consenting to a judicial settlement conference. The court was required to determine costs following judgment in favour of the defendant hoteliers (D) in the sum of £1,320. The claimant firm of chartered designers and planning supervisors (W) had claimed various sums that in total did not exceed the sum of £94,132 for works carried out for D under a design and works management contract. D had counterclaimed for various sums to a total of £13,956 as, amongst other things, an overpayment to W. The court held that W had wrongfully repudiated the contract and that D's counterclaim succeeded in part. One month before the substantive trial the parties had attempted Alternative Dispute Resolution and there was an unsuccessful judicial settlement conference. W contended that D's entitlement to costs fell to be reduced as they had unreasonably only agreed to engage in mediation at a very late stage in the proceedings when substantial costs had been incurred. HELD: A premature mediation simply wasted time and could sometimes lead to a hardening of positions on both sides, which made any subsequent attempt at settlement doomed to fail. Conversely, a delay in any mediation until after full particulars and documents had been exchanged could mean that the costs that had been incurred to get to that point became themselves the principal obstacle to a successful mediation. The trick in many cases was to identify the happy medium: the point when the detail of the claim and the response were known to both sides, but before the costs that had been incurred in reaching that stage were so great that a settlement was no longer possible. In the instant case that point, if it existed, had been missed by the parties. In the exceptional case where there was a mediation that was very late, when its chances of success were very poor, to show that the successful party had unreasonably delayed in consenting to the mediation might lead to an adverse costs order, Halsey v Milton Keynes General NHS Trust (2004) EWCA Civ 576, (2004) 1 WLR 3002 considered. But such considerations did not arise on the facts of the instant case because there was nothing to demonstrate that D unreasonably
delayed in consenting to the judicial settlement conference. Furthermore, even if there had been an earlier mediation, W's uncompromising attitude meant that it would not have had a reasonable prospect of success. Accordingly, there was no reason to reduce D's costs on the basis of a failure to mediate and D was entitled to £41,200 in costs. Costs determined For related proceedings see Nigel Witham Ltd v Smith (2007) EWHC 3027 (TCC) Counsel: For the claimant: Susan Lindsey For the defendants: Annabel Shaw Solicitors: For the claimant: Justin Nelson For the defendants: Fenwick Elliott
LTL 30/1/2008 (Unreported elsewhere) Document No. AC0116068