Refusal to mediate leads to mega-Bucks bill

Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someone

Reid v Buckinghamshire Healthcare NHS Trust [2015] EWHC B21 (Costs)

An NHS Healthcare Trust has been ordered to pay an enhanced rate of costs due to its failure to engage in mediation.

In the original action the Claimant, Reid, brought an action for clinical negligence against Buckinghamshire Healthcare NHS Trust.  Liability was conceded by the Defendant well in advance of trial and the matter proceeded to a detailed assessment for costs.

Earlier in proceedings the Claimant had invited the Defendant to mediate the dispute and had also put forward a part 36 offer in respect of all the costs to be assessed.  By the start of the second day of the assessment proceedings the parties had agreed the level of costs to be paid.  This sum meant that the Defendant had failed to beat the Claimant’s offer and the usual Part 36 consequence of a 10% uplift in the awarded costs was made.

Whilst the costs implications relating to the Part 36 offer are to be expected, the case is significant for the penalties imposed relating to mediation – or rather the Defendant’s refusal to mediate.

The Court noted that it took the Defendant six weeks to reply to the invitation to mediation – even then the Defendant refused to participate.  This, said Master O’Hare, was “unreasonable” and was deserving of a penalty in the form of costs.   The Court ordered the Defendant to pay the Claimant’s costs on the indemnity basis from the date that it was likely to have received the invitation to mediation, being 27 July 2015.  This meant that the Defendant was liable for the reasonable costs of the Claimant, even if they were not proportionate to the issues involved.  Interest was also awarded on those costs from 27 July.

 

Comment

In one respect the case is a useful reminder of the significant and costly role that Part 36 offers have to play in all forms of litigation.

With regards to mediation, though, this is a crucial cautionary tale: mediation and alternative dispute resolution is a critical aspect of litigation and one that both parties should take seriously.  Whilst notable cases have so far centred around costs sanctions for successful parties in litigation, this claim is the first reported case of a losing party being penalised for refusing to mediate.  The Courts are keen to stress the merits of mediation and this Judgment is yet another opportunity for them to expound that view – and to warn those involved in or contemplating litigation.

If your business has a claim it would like to pursue or if your business is facing legal proceedings, speak to us for expert advice on the legal merits of your case and the steps you should take.  Contact Tom Smith, Head of Dispute Resolution, at tom.smith@forbessolicitors.co.uk or call 0800 689 0831.

Tom Smith

About Tom Smith

Tom is a Partner and Head of the Dispute Resolution Department at Forbes Solicitors. Tom’s blogs cover his specialisms of business disputes involving commercial contracts, shareholders, partnerships, share sales and warranties, banking issues, restrictive covenants and professional negligence.
This entry was posted in Dispute Resolution and tagged , , , , , .

Leave a Reply

Your email address will not be published. Required fields are marked *