Case Analysis: Grierson v Grierson [2024] EWHC 3048 (Ch) (27 November 2024)
In Grierson v Grierson, the High Court addressed the issue of costs in the context of an inheritance dispute and provided significant insights into the implications of refusing to mediate. The judgment illustrates that while the court possesses the discretion to penalize parties for refusing mediation, such refusals are not automatically deemed unreasonable. This case underscores that mediation, though encouraged, remains a discretionary option until it becomes mandatory.
Costs and the General Rule
The Court reaffirmed the general rule under CPR 44.2(2)(a) that the unsuccessful party should pay the costs of the successful party. Here, the claimant, Duncan, was deemed the successful party, despite his failure to exclude clause 1 of the 2020 Will from probate. The court concluded that this partial loss did not significantly diminish his overall success, and no exceptional factors justified departing from the general rule. The two common law exceptions to the usual costs rule, as outlined in Leonard v Leonard (Costs) [2024] EWHC 979 (Ch), were deemed inapplicable.
Refusal to Mediate
The court carefully examined Duncan’s decision to cancel a planned mediation in November 2023. Duncan argued that mediation was inappropriate because Robert had not clarified his position on the Declaration of Trust and refused to cover the associated costs. The court expressed skepticism about these reasons, suggesting that such issues could have been addressed during mediation. Nevertheless, the court ultimately decided that Duncan’s refusal to mediate did not warrant penalization in costs. This reflects a nuanced approach: while mediation is encouraged, refusal is not automatically unreasonable.
Application of CPR Part 36
Duncan’s success in the proceedings triggered the application of CPR 36.17(4), which mandates certain cost consequences when a claimant’s judgment is at least as advantageous as their prior Part 36 offer. Duncan’s Part 36 offer, made on 12 March 2024, proposed terms that included admitting the 2020 Will to probate, appointing an independent administrator, granting Robert a £20,000 pecuniary legacy, and denying Robert any proprietary or equitable interest in a disputed property.
The court compared the offer to the judgment and found that the latter was “at least as advantageous” to Duncan. Although the judgment did not provide for the independent administrator, it avoided the £20,000 legacy to Robert, leaving Duncan financially better off. As such, the court concluded that Robert’s refusal to accept the offer resulted in unnecessary litigation costs.
Cost Consequences Under CPR 36.17(4)
The court ordered the following under CPR 36.17(4):
1. Indemnity costs from 2 April 2024 (the expiry of the relevant period for the Part 36 offer).
2. Interest on those costs at 10% above the base rate.
3. An additional amount of 10% of Duncan’s awarded costs, capped at £75,000.
The court deemed these consequences just, emphasizing that Robert’s failure to accept the offer prolonged the proceedings and escalated costs unnecessarily.
Conduct and Indemnity Costs
The court awarded indemnity costs for the entire proceedings, finding that Robert’s conduct was “out of the norm.” Factors included:
1. Weak Case: Robert pursued claims despite clear evidence that the 2022 Will lacked formal validity.
2. Unreasonable Allegations: Robert accused Duncan’s solicitors of professional misconduct without evidence.
3. Cost-Inflating Conduct: Robert’s inconsistent positions and failure to make concessions in pleadings unnecessarily increased costs.
While Duncan also bore some responsibility for the failure to settle—particularly due to his cancellation of mediation—the court found that Robert’s conduct justified indemnity costs.
Payment on Account
Duncan requested a payment on account of 90% of his incurred costs, but the court awarded 80% (£160,000 plus VAT). This adjustment reflected the discrepancy between Duncan’s incurred costs and the higher costs budgeted earlier in the case.
Lessons from the Case
This case highlights the financial risks associated with inheritance disputes and the importance of considering mediation. The total costs exceeded £160,000, and mediation might have reduced these expenses. However, the judgment also clarifies that while courts encourage mediation, parties are not automatically penalized for refusing to engage.
Conclusion
Grierson v Grierson underscores that costs decisions depend on the specifics of each case. The refusal to mediate, though potentially detrimental, is not inherently unreasonable. Additionally, the case reinforces the value of CPR Part 36 offers in securing advantageous outcomes and reducing litigation risks. This serves as a cautionary tale about the perils of weak claims and poor litigation conduct, particularly in costly inheritance disputes.