The police have become the latest litigants to fall foul of the increasing willingness of the courts to apply costs sanctions against parties who unreasonably refuse to mediate.
In Laporte v The Commissioner of Police for the Metropolis the police successfully defended a claim. They asked the court for costs to be assessed in their favour on the indemnity basis and for a payment on account of £100,000 to be awarded. Instead Turner J in the High Court said:
I am satisfied that the defendant’s failure fully and adequately to engage in the ADR process should be reflected in the costs order I make…
I do not consider that the scale of the defendant’s shortcomings in the context of his failure to engage with ADR was such as to justify disentitling him from claiming any of his costs. He did ultimately win on every substantive issue and, although ADR made settlement a sufficiently likely possibility, it would have been by no means certain. Exercising the broad discretion afforded to me by the rules, I award the defendant two thirds of his costs against the claimants to be assessed on the standard basis.
The judge went through the six Halsey reasons commonly cited as grounds for reasonably refusing to mediate and discounted each in turn on the facts of the case. On the question of whether or not ADR would have been successful the judge said parties should not regard “tactical positioning” as intransigence. In other words parties frequently make statements or proposals with the aim of lowering the expectations of the other side. This does not necessarily represent the parties’ true position and is not grounds for saying a settlement is not possible so mediation is bound to fail.
This is the latest case in a recent line which has seen parties penalised for failing to adequately engage in ADR. You can download a copy of our case digest on ADR costs penalty cases here.