Mediation, costs, sanctions and reducing bills

Headlines about Bristow v Princess Alexandra Hospital tend to suggest that failure to mediate the costs aspects landed the defence with a huge costs sanction at detailed assessment.

In fact, the very first sentence of the brief costs judgment shows that the claimants lost over 43% at the assessment: “A bill was originally lodged for approximately £239,000 and the basic fact is that upon a detailed assessment this was reduced to £135,486.90.” Continue reading

Civil Mediation Conference 2015 – Lord Neuberger keynote address

policy definition

The President of the Supreme Court, Lord Neuberger, delivered the keynote address “A View From on High” (which we understand was not a title of his choosing) at this year’s Civil Mediation Conference on 12 May 2015. He started by recalling the famous dispute between Henry II and Thomas a Becket, which was apparently the subject of a failed mediation. Moving from history to fairy tales, Lord Neuberger then said observed that mediation in the UK had been in Rip van Winkle-like hibernation or Sleeping Beauty-like slumber until about 1997, but that had now changed and mediation was firmly in parties’ and practitioners’ minds, even if some still wanted their day in court. He quoted a survey in 2007 which found that half (47%) of respondents involved in commercial litigation admitted that a personal dislike of the other side had been responsible for driving them into costly and lengthy litigation.

In Lord Neuberger’s view, the advantages of a successful mediation over litigation were that it could be:

  • quicker, cheaper and less stressful and time-consuming than litigation
  • more flexible than litigation in terms of potential outcomes
  • less likely to be harmful to the long term relationship between the parties
  • conducted privately, under less pressure and in somewhat less artificial circumstances than a court hearing
  • far more likely to enable both parties to emerge as “winners”, or at least neither party to emerge as a disgruntled “loser”.

However, if mediation fails, the parties will inevitably focus on its disadvantages, being that:

  • the overall resolution, having involve a failed mediation as well as a trial, will cost more, take more time and may be more likely to cause serious damage to the relationship between the parties
  • a litigant who is rich or wants to delay can use mediation cynically to put pressure on an opponent who is poor or in a hurry
  • parties to what seemed at the time to be a successful mediation may, in retrospect, feel that they were “bounced” into what now appears to be an unsatisfactory settlement, when they might have had their day in court, and
  • what he termed “a lawyer’s point” – but which nevertheless has some validity – is that if almost all cases settle and hardly any disputes go to court, the development of the law will be prejudiced – a particularly significant point in common law jurisdictions, where judges do not simply interpret the law, but formulate and develop it.

Lord Neuberger’s view is that mediation is particularly attractive at the present time when litigation is becoming ever more expensive and time-consuming, when the law is getting increasingly complex, when legal aid is ever more attenuated, and when court fees have been increased markedly.

Lord Phillips had spoken unequivocally in favour of compulsory mediation when he was Lord Chief Justice, but Lord Neuberger is clearly a little more cautious. He recognises that mandatory mediation is in place in the US, Australia, New Zealand, and Scandinavia, at least for some types of civil case, and that Lord Faulks QC, Minister of State for Justice, had said he would explore whether a system could be introduced for civil mediation similar to the so-called MIAMs (mediation information and assessment meetings) “for separating couples”.

We could therefore see further encouragement from the courts for parties to mediate, but Lord Neuberger raises an interesting point regarding a party who simply refuses to mediate and subsequently succeeds in court, saying that “it seems a bit weird for a judge to penalise him* for not agreeing to mediate his claim when he was not obliged to do so and the judge has just held that he was entitled to succeed 100%”. [* in costs, presumably]

What we should take from this latest senior judicial intervention on this theme is the continued encouragement by the courts for parties to mediate but, equally, that we remain a long way short of compulsory mediation in civil matters.

 


About the author

Jef Mitchell is a consultant at BLM and former Chief Claims Officer at the Ministry of Defence where he regularly briefed Ministers on claims issues and risk management. He now helps to lead the firm’s Policy and Government Affairs work with Alistair Kinley preparing submissions and supporting evidence for consultations and reform proposals, in addition to liaising with government departments and regulators on key issues and consultations affecting the firm and its clients. Jef is also an accredited mediator.