Legal Cost Specialists

Failure to mediate

Lord Justice Jackson, in Faidi & Anor v Elliot Corporation [2012] EWCA Civ 287, commenting on the failure of the parties to engage in mediation over a claim concerning a dispute over wooden floorboards:

“As it is, neither side wrote to the other proposing mediation until shortly before the hearing in the Court of Appeal. By then huge costs had been incurred. The claimants’ costs up to the end of trial were £23,195. The claimants incurred a further £34,609 costs on the appeal. The defendant’s costs up to the end of trial were £32,798. The defendant incurred a further £49,532 costs on the appeal. Thus the total costs thrown away amount to £140,134. If the parties were driven by concern for the well being of lawyers, they could have given half that sum to the Solicitors Benevolent Association and then resolved their dispute for a modest fraction of the monies left over.”

3 thoughts on “Failure to mediate”

  1. Also see the recent case of Ghaith v Indesit –

    As a Postscript, Longmore LJ said:

    It is a great pity that Indesit did not pursue the option of mediation rightly encouraged by Toulson LJ when he gave permission to appeal. Mr Peebles informed us that it was not pursued because the costs had already exceeded the likely amount in issue. This is an inadequate response to this Court’s encouragement of mediation since a full day in this Court will inevitably result in a substantial increase in costs. Indesit’s reaction is all too frequent and the Court has, since April of this year, decided that any claim for less than £100,000 will be the subject of compulsory mediation. It is devoutly to be hoped that such mediation will mean that these comparatively small claims will not have to be adjudicated by this Court so frequently in future.

    Ward LJ added:

    I fully endorse Longmore LJ’s postscript. When this Court grants permission to appeal, it does so because there is a real prospect of success. That does not mean that the appeal will succeed, but it does mean that the appeal is by no means hopeless. That should tell both parties that there is still all to play for. If they have any sense, they will therefore heed a recommendation to mediate because the costs of mediation are likely to be exceeded by the costs of the appeal by a significant margin. It is not enough, as Mr Peebles suggested, that there had been some attempt in the correspondence between solicitors to settle the case. The opening bids in a mediation are likely to remain as belligerently far apart as they were in correspondence but no-one should underestimate the new dynamic that an experienced mediator brings to the round table. He has a canny knack of transforming the intractable into the possible. That is the art of good mediation and that is why mediation should not be spurned when it is offered.

  2. Surely those ‘half’ costs should have gone to the Cost Lawyers’ Benevolent Fund to make up for the fees lost by not having detailed assessment?

    (And what did the Barristers do to deprive their Benevolent Fund of a little bonus?)

    I suppose, to misquote Life of Brian, the reference to the Solicitors Benevolent Fund is not to be taken literally; it refers to any providers of benevolent funds for laywers.

  3. Rachel Wallace

    In my experience, mediation costs are frequently enormous. Costs building 101. Obviously only when the costs are recoverable btp…

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