In
Laporte Turner
J set out the statutory framework for civil proceedings then reviewed the two
main Court of Appeal decisions on costs and mediation:
- Halsey v
Milton Keynes General NHS Trust [2004] EWCA Civ 576
- PGF II SA v OMFS Company 1 Ltd [2013] EWCA Civ 1288
Turner J defined the issue in
Halsey as ‘how the successful litigant previously recalcitrant on
the issue of ADR should fare on the issue of costs’ (para [11]), and quoted
Dyson LJ (as he then was) and his stress on the fact that were a successful
party to be deprived of costs the burden must be on the unsuccessful party to
show that there should be a departure from the r 44.2(2) general rule. At para
[16] the Court of Appeal went on to consider circumstances which might lead to
an unreasonable refusal of mediation, including:
- the nature of the dispute;
- the merits of the case;
- the extent to which other settlement methods have been
attempted;
- whether the costs of the ADR would be
disproportionately high;
- whether any delay in setting up and attending the ADR
would have been prejudicial; and
- whether the proposed ADR had a reasonable prospect of
success.
In
PGF II SA the
Court of Appeal referred to the ‘
ADR
Handbook’ (2013) (which I take to be
The
Jackson ADR Handbook Susan Blake, Julie Browne, and Stuart Sime
(2013, OUP)); and Turner J (at para [13]) referred in particular to the
following (per Briggs LJ (a stalwart supporter of ADR and Financial Dispute
Resolution in chancery proceedings)):
'[34]… In my judgment, the time has now come for this
court firmly to endorse the advice given in para 11.56 of the ADR Handbook ,
that silence in the face of an invitation to participate in ADR is, as a
general rule, of itself unreasonable, regardless whether an outright refusal,
or a refusal to engage in the type of ADR requested, or to do so at the time
requested, might have been justified by the identification of reasonable
grounds.'
Turner J considered at length the failures of the defendants
to engage in the mediation process, and then went on carefully to consider the
Halsey factors listed above. In
particular he said that the case was not one (argument on a point of legal
principle) whose ‘nature… made it unsuitable for mediation’ (para [44]); and that
there was a reasonable chance that mediation might have been successful in
whole or in part ([56]). He reduced the costs award against the claimants by a
third (para [67]).
Reduction of costs
awards in family proceedings
So how might this translate in a costs award in family –
almost exclusively financial relief – proceedings? Plainly the Court of Appeal
in
Halsey and
PGF II SA are keen to see that those who unreasonably fail to
engage in mediation are punished in reduction of any costs entitlement they may
have. The family proceedings rule-makers pull Cnut-like in the opposite
direction: costs awards cannot be made where parties fail to accept
Calderbank proposals for settlement (FPR
2010, r 28.3(5), save in cases on ‘conduct’: r 28.3(7))) in final order
financial relief proceedings under Matrimonial Causes Act 1973. So the
Laporte arguments on avoidance of ADR
can only properly be put forward in other forms of (non-MCA 1973) financial
relief proceedings (eg Children Act 1989 Sch 1: see list in
Family Court Practice under r 28.3) and
family property proceedings (including MCA 1973 interim application proceedings).
(For a recent example of the strength of life in
Calderbank correspondence, see
Coward
v Phaestos [2014] EWCA Civ 1256.)
But can
Halsey,
Laporte etc be applied in MCA 1973
final order applications over the r 28.3(5) no costs order principle? The
immediate problem is (taking one-third as an appropriate proportion): a one
third reduction of nothing is still nothing. On that argument
Laporte avails a successful party not at
all. But what about failure to co-operate in any way with ADR/mediation as ‘conduct’
under r 28.3(7)? ‘The manner in which a party has pursued or responded to the
application’ or an issue raised in the proceedings is specifically raised by r
28.3(7)(d). Failure unreasonably to respond to suggestions for mediation surely
may be said to engage r 28.3(7)? Where cases are run into the ground by a party
who will not attempt to mediate, the question will then be: can the mediation
proponent successfully seek part of their costs on
Laporte principles?
