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Failure to Mediate a Detailed Assessment Proves an Expensive Option - Kate Oliver, John M Hayes

04/02/16. While traditional case law recognizes costs penalties imposed on successful parties who refuse to mediate, Reid v Buckinghamshire Health Care Trust [2015] EWHC B21 turns the tables and imposes additional costs penalties on the NHSLA losing party for failing to mediate on legal costs in this medical negligence case.

Background

Listed for a two day detailed assessment hearing, the matter was concluded at the start of the second day, save for the costs of assessment. Master O’Hare in his judgment highlights three relevant correspondence exchanges between the parties during the negotiation stage on costs.

Chronology

On 24-07-15, the Claimant wrote to the NHSLA to propose mediation on costs. On 28-09-15 the Claimant wrote again to the NHSLA Defendant enclosing a Part 36 offer as to all costs to be assessed and on 06-10-15, the Claimant wrote enclosing a Part 36 offer in respect of Counsel’s fees only.



Remedies sought pursuant to CPR 36.17

In the event, the NHSLA failed to beat either offer on costs and the Claimant, represented by Irwin Mitchell solicitors, sought remedies pursuant to CPR 36.17 and further penalties because of the refusal to mediate.

Judgment

Judgment included an additional sum (£13,000) equivalent to 10% of the £130,000 costs awarded. This is a standard costs order for failing to beat the Part 36 offer with the Judge explaining his reasoning behind the award:

  • the NHSLA did have suitable information to make an assessment of the sum likely to be awarded particularly given the prospect of a two day detailed assessment hearing,

  • the offer was made well before the detailed assessment hearing and that

  • no hearing application was received until several weeks after the offer was made.

Tactics

This tactically valid information should be noted by Claimant solicitors, Costs Draftsmen and Costs Lawyers because it applies to all forms of litigation not just medical negligence.

Penalties

Interest was awarded on costs at 8% from the date of the order giving rise to costs: 7 January 2015.

A penalty was also included for failing to mediate with the NHSLA ordered to pay costs to 27 July 2015 on the standard basis and costs from that date on an indemnity basis being determined by the Judge as the date the Defendant ought reasonably to have received the Claimant’s offer to mediate.

Note of Caution to those who refuse to mediate

The Judgment concludes with a brief note of caution about sanctions being imposed on parties who unreasonably refuse to mediate. Master O’Hare held that NHSLA had unreasonably refused the offer to mediate and he disapproved.

Result

Reported in Litigation Futures, Partner Tom Blackburn said “the judgment meant the NHSLA would have to pay over £20,000 in indemnity costs.

Kate Olive
John M Hayes

Image ©iStockphoto.com/DNY59

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