cost of litigation

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May 2008

The ADR Practice Guide 3rd Edition (co-authored by Glovers’ David Miles) receives high praise

In the Spring edition of "The Expert" (a magazine published by the Academy of Experts) the book is reviewed.   The first paragraph of the review says:-   "Thi...more »

April 2008

Drake –v - Harbour – Court of Appeal supports a robust approach to causation in negligence

The Facts Mr Harbour was engaged by Mrs Drake to undertake rewiring works to her bungalow in East Sussex.  A catastrophic fire occurred in the early hours of 27 Ju...more »

Builders Reasonable offer to Mediate Results in Costs Sanction Against Defendant

The Court of Appeal’s decision in Halsey –v- Milton Keynes NHS Trust led some lawyers to conclude that it was safe to reject an offer to mediate, particularly if the offer was made before proceedings were started.  However, the Court of Appeal in Burchell –v- Bullard has indicated that such an attitude is misleading, reinforcing the obligation on lawyers and their advisers routinely to consider with their clients whether their disputes are suitable for ADR.

The dispute presented a sorry picture for the litigation process.  The Claimant, a Contractor, claimed £18,327 for works done to Mr and Mrs Bullard’s roof.  The Bullards counterclaimed £100,815 for alleged defects.  The Judge awarded the Claimant £18,327 plus costs and the Bullards £14,373 plus costs on their counterclaim.  The Contractor therefore recovered £5,025 net.

The case came before the Court of Appeal, because the Contractor appealed over the Judge’s award of costs.  In overturning the Judge’s award, the Court of Appeal ordered the Bullards to pay 60% of the costs of the claim and counterclaim and 60% of the Contractor’s costs in respect of his claim against the Sub-Contractor.  The global cost of litigation was put at £185,000 described by the Court as “an horrific picture”.

The Court took the opportunity to articulate the four main factors in its earlier decision in Halsey:-

  • The nature of the case: A small building claim with a potentially large cost of litigation was suitable for ADR “par excellence”.

  • The merits of the case: The Bullards had been unreasonable, according to the Court, in believing that they had a watertight case.  The Bullards’ building surveyor had rejected the proposal to mediate on the grounds that “the matters complained of are technically complex”.  Ward LJ described this response as “plain nonsense”.

  • The cost of mediating: This was regarded as trivial when compared with the cost of litigation.  The Bullards were criticised for their all embracing “kitchen sink” approach to their counterclaim.

  • The prospects of success at mediation: The Court considered the moderate approach of the Claimant against the intransigence of the Bullards.  The Court said that an intransigent party cannot rely on his own intransigence to establish that mediation would not have resulted in settlement.

The Court concluded that the Claimant had discharged the burden of proving that the Bullards’ refusal to mediate was unreasonable.  Furthermore, the Court could take cognisance of the fact that the offer to mediate had been made before proceedings were started.

Lord Justice Ward said:-

“The (legal) profession can no longer with impunity shrug aside reasonable requests to mediate.”

David Miles