| Date | 23 October 2002 |
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| Judgment | Hurst -v- Leeming, 9 May 2002 |
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| The Issue | Whether a refusal to adopt ADR procedures might be penalised by the court in an adverse order for costs. |
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| Implication |
The courts will only, in exceptional circumstances, accept justification for a refusal to attempt mediation where it can be shown that there was no prospect of a successful outcome to the mediation. |
printIn May of this year, I reported the case of Dunnett -v- Railtrack, a case which considered the requirement of the Civil Procedure Rules for parties to use alternative dispute resolution procedures (ADR) if the court considers it appropriate. Whilst Railtrack was successful (though perhaps only on a technicality), the Court of Appeal refused to allow that its costs should be met by the losing party, because Railtrack had earlier refused to countenance mediation. Railtrack was confident that it would win the appeal and could see no point in ADR, which would necessarily involve the payment of money. Lord Justice Brooke, however, was satisfied that skilled mediators might have been able to achieve results satisfactory to both parties, and decided that the failure of Railtrack to proceed in this manner was sufficient for it to be penalised in costs. In a more recent case of Hurst -v- Leeming, the court gave clearer guidelines upon the grounds that might justify a refusal to mediate. Hurst was a partner in a solicitors' practice. When the practice was dissolved, disputes arose between Hurst and his former partners, and this led to legal proceedings being commenced by Hurst. Hurst acted in person in those proceedings until a few days into the trial, when, through solicitors he had retained, he instructed Mr Ian Leeming QC as his barrister. Despite this, Hurst failed in his claims in that action at first instance, on appeal to the Court of Appeal and in the House of Lords. Orders for costs were made against him. The failure in those proceedings led to his bankruptcy. Hurst attributed the failure in those proceedings, and his subsequent ill-fortune, to the legal advice and representation he had been given. He therefore decided next to sue his legal advisers. Firstly, he sued his solicitors on the basis that they were liable for the claimed negligent conduct of his barrister. Primarily, this approach was taken by Hurst because at the time it was thought that barristers were immune from actions for negligence in the conduct of proceedings. In the event, Hurst's actions against his solicitors were struck out as hopeless, and the Court of Appeal refused permission to appeal. Undaunted, Hurst commenced separate proceedings in a different court, and that action also was struck out as an abuse of process. Then, in July 2000, the House of Lords held in the case of Arthur J S Hall & Co -v- Simons that barristers could be sued for negligence in the conduct of proceedings. With the decision of the House of Lords in that case apparently removing Leeming's immunity, Hurst commenced fresh proceedings against Leeming. These proceedings came before Mr Justice Lightman in the Chancery Division of the High Court. Hurst again represented himself and apparently there was a frank exchange of views with the judge on the merits of his case. This led to Hurst accepting that his action had no merit and it was dismissed. In the ordinary course of events, Leeming would, without question, have been entitled to an order that Hurst meet his costs. Hurst argued however, that no such order should be made, because both before and after the commencement of the proceedings, he had invited Leeming to proceed to mediation, but Leeming had refused. Leeming gave a series of reasons for refusing to proceed to mediation. Firstly, the legal costs already incurred in meeting the allegations and the threat of proceedings. Secondly, the seriousness of the allegations of professional negligence. Thirdly, the total lack of substance of the claims made. Fourthly, the lack of any real prospect of a successful outcome to the mediation proceedings, and fifthly, the character of Hurst. Leeming described Hurst as a man obsessed with the notion that an injustice had been perpetrated on him who would not be able or willing to adopt, in the course of a mediation, the attitude required if the mediation was to have any real prospect of success. The judge went through each one of these points to consider whether Leeming was justified in refusing to proceed to mediation. The fact that heavy costs had already been incurred did not afford any form of justification. This was merely a factor to be taken into account in the mediation process. Nor was it sufficient that there was an allegation of professional negligence. That did not provide a reason for refusing to attempt mediation. Furthermore, the fact that a party believes that he has a watertight case, again, was no justification for refusing mediation. The judge commented that that is the frame of mind of many litigants. Neither was it necessarily sufficient of itself that a full and detailed rebuttal of the opposite party's case had already been supplied. The critical factor in this case, in Mr Justice Lightman's view, was whether a mediation had any real prospect of success. The judge was persuaded that, quite exceptionally, Leeming was justified in taking the view that mediation was not appropriate, because it had no realistic prospect of success. The judge agreed that Hurst was a man obsessed with the injustice which he considered had been perpetrated on him and was incapable of a balanced evaluation of the facts. Accordingly, the judge ordered that Leeming's costs should be met by Hurst, which, given the circumstances, was likely to be a further debt which would not be paid.
CJ-0241
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