Master Macleod has given her last judgment which may be of long lasting relevance to the world of litigation and ADR/mediation.
In case of Charles Elphicke v Times Newspapers (Neutral Citation Number: [2024] EWHC 2595) the judge considered whether there was any discretion to take into account litigation conduct following the Claimant having discontinued his claim. Helpfully the judge starts by providing a simple explanation or summary of the decision.
The judge drew inspiration from Samuel Beckett and it is true to say that sometimes litigants feel that litigation goes on for ever like “Waiting for Godot.”
Normally when a party effectively gives up and discontinues a claim they have to pay the other side’s costs of the litigation. The judge looked at whether the Court can take into account poor litigation conduct following discontinuance.
The judge also considered Dispute Resolution in the context of legal costs between the parties following recent case law such as Churchill v Merthyr Tydfil BC [2023| EWCA Civ 1416 and Jenkins v Thurrock Council [2024] EWHC 2248 (KB).
The judge made observations on the role of ADR (or DR as the Master of the Rolls would prefer) in the context of legal costs. The Judge made an order which extends time for detailed assessment to enable ADR over costs. The judge said that “expending of large sums on Detailed Assessment as a form of collateral litigation is a luxury few parties can, or wish, to make use of but of equal importance is the use of court resources at a time when courts are busy.”
Conduct Following Discontinuance
Rule 38.6 of the Civil Procedure Rules provides insofar as material that: 38.6 (1) Unless the court orders otherwise, a claimant who discontinues is liable for the costs which a defendant against whom the claimant discontinues incurred on or before the date on which notice of discontinuance was served on the defendant.
Significantly the judge ruled that conduct after the discontinuance of a claim can be taken into account. Otherwise parties could behave with impunity after a claim had been dropped.
Mr Elphicke also sought to argue that the Times newspaper had not engaged in mediation or ADR but the judge held that not to be the case. She said that:
“In summary it was said to be clear that the Defendant should have agreed to attempt ADR based on factors drawn from Halsey v Milton Keynes General Hospital Trust for example namely the nature of the dispute was well suited for settlement discussions, and the court was right to order ADR be considered. The Claimant considered this was a case well capable of settlement by ADR, (and ADR had been budgeted for) and if the Defendant thought otherwise they should have at least attempted it and seen where it went. The Defendant refused to engage at every stage, and there was a pattern of constant delay that amounted to a refusal despite the court’s order. (I drew the then relatively recent decision in Churchill v Merthyr Tydfil to Mr Elphicke’s attention in view of its reference to the Halsey case and its relevance).
On day three in reply counsel reiterated that the Defendant’s position was that there was no attempt by the Claimant to offer or suggest terms that were remotely comparable to the ultimate outcome of the litigation. His Part 36 offer required a retraction and a statement of the claimant’s innocence by the Defendant. It would have been ethically wrong for the Defendant to do so. As to the point that the Defendant had suggested ADR after exchange of witness statements, the Claimant had suddenly discontinued very shortly afterwards and hence the fact that such did not then take place should not lie at the Defendant’s door.”The judge concluded that:
“As to engaging or not engaging in ADR, the Defendant had not refused ADR: it had stated that “You state that this matter is well capable of settlement, proposing the parties should engage in ‹mediation. We will therefore write to you in due course as to the appropriate stage at which any ADR process should take place…” and Carter Ruck had expressed no objection to ADR taking place after exchange of statements as Reynolds Porter Chamberlain for the Defendants had proposed. Far from it: Carter Ruck had responded: “Witness statements have been served. We propose the parties go to ‹mediation» on a mutually convenient date.” To which the Defendant did not object, but the discontinuance of the claim came very soon thereafter (some seven working days later) at the initiation of, naturally, the Claimant.
The Defendant argued that it had been quite wrong of the Claimant by his lawyers then to say, when discontinuing, that “Wherever the truth may lie, our client believes in circumstances where TML, an entity governed by commercial imperatives has simply refused to explore any kind of alternative resolution…”
ADR in Costs Proceedings
The Judge encouraged ADR in relation to the remaining assessment of costs proceedings and it is worthwhile quoting her judgment at this point
Costs and Costs ADR
“It has always been the case that dispute resolution (or ADR, or DR) has been important as a means to avoid the use of court and parties resources. Since Churchill and decisions such as that of my learned former colleague Master Thornett in Worcester and in Jenkins, this has become all the more important. At time of finalising this judgment, amendments to the CPR came into force further promoting the court’s powers and duties in relation to considering directing ADR, see Civil Procedure (Amendment No.3) Rules 2024 (SI 2024 No. 839).
Here there remains the prospect of long, expensive Detailed Assessment proceedings with counsel and costs lawyers occupying perhaps several days, at a cost comparable with that of many trials. In all cases where the claim is at an end, such as here, but significant costs are incurred and must be determined, in my judgment it would be remiss of a judge not to make use of the principles in cases such as Churchill and direct that, before a fresh set of proceedings is in effect commenced so as to lead to detailed assessment there must be proper dispute resolution. I fully expect such an order to (need to) become the norm when a judge directs detailed assessment unless costs are agreed.
So often in the years when I sat as a Deputy Costs Judge of the Supreme (later Senior) Court I saw that bills of costs were listed for lengthy hearings yet once Costs Lawyers (and sometimes counsel) attended the hearing and discussed matters, or once I had ruled on points of principle in the bill very shortly, the matter was resolved pragmatically.
It is my judgment essential that courts do what they can in the present congested court system to bring forward that settlement process so that assessments of costs are not needlessly listed whether in our County Courts (busy as they are) or in the Senior Courts Office, only to ‘go short’ when – at last – some pragmatic discussion takes place between lawyers who know both the ‘ropes’ and the reality of how assessment proceeds. I do not doubt that consequences can and will result generally if parties in such cases come before the Taxing Master (Costs Judge) and have failed to do the court the courtesy of proper engagement in pre-assessment ADR.
Order for mandatory pre-detailed assessment ADR
I shall include a provision of my own motion that the parties must engage in alternative dispute resolution as to the costs claimed by the Defendant. Good reason will need to be shown if the form of that dispute resolution is at any less engaged a level than mediation via Costs Lawyers given that the Bill here more than justifies Costs Lawyer input. The time for commencing detailed assessment is to be extended until conclusion of any such mediation, or the point at which either party indicates it is not prepared to proceed and wishes to go to assessment. Any party which decides not to engage in ADR, as above or to call it off must be in a position to justify that non-engagement to the Costs Judge and be alert to the provisions of CPR 44.11 and indeed the developing common law since Churchill.”
So the message was clear,; mediation or ADR is to be encouraged in costs proceedings and can save further costs. Also the Court can consider conduct after a claim has been discontinued in relation to costs.
| Elphicke v Times Newspapers | mediation/adr | Neutral Citation Number: [2024] EWHC 2595 (KB |