It is a truth universally acknowledged that it is difficult to predict outcomes in litigation and this is demonstrated by the cases that proceed to trial with both parties convinced in the merits of their own cases. It is not scientific. One party has to lose in the end. Parties and litigation funders are gambling in many cases on an uncertain outcome. Solicitors often have to calculate the risk in percentage terms as part of the risk assessment upon which the CFA uplift is calculated. Legal Protection insurers will not fund a case where the prospects of success are less than 51%. Often the parties will take out after the event insurance to cover the other side’s costs should they lose. The cost of such policies is no longer recoverable from the other party.
One way of avoiding a nasty surprise and ending up with a costs order against you is to settle the case at an early stage through mediation. Legal Protection insurers often include mediation as a term of the policy in that policyholders in dispute have to try to resolve the claim before going to Court.
Going through the risks is one of the tasks that the mediator will encourage the parties to do during the mediation process. The cost of the mediation process is worthwhile incurring rather than a potentially large costs bill. Moreover, offering to mediate can act as an insurance policy in that the Court should take it into account when deciding what to do about costs at the end of the case. This even applies in small claims cases as the Court can award costs if a party has acted unreasonably in the conduct of the litigation. Mediation is therefore a good risk management tool for anyone involved in litigation in the UK.