No 'General Presumption' in Favour of ADR

The debate which†ensued following the†well-publicised case of†Dunnett v Railtrack†(2002) has been recently†considered by the Court†of Appeal in the two†linked cases of Halsey v†Milton Keynes General†NHS Trust and Steel v†Joy and Halliday, in†which judgment was†given on 11 May 2004.†The main issue in both†appeals was when the†court should consider†imposing a costs†sanction against a†successful litigant on the†ground that he has†refused to take part in†mediation.

In Dunnett v Railtrack a successful litigant†was for the first time deprived of costs for†refusing to mediate. Lord Justice Brooke†(who presided over Dunnett) granted leave†to appeal on this point in both Halsey and†Steel and in Halsey (the lead case) invited†mediation providers to intervene, giving†the Court of Appeal the opportunity to†revisit this issue and give constructive†guidance.

Whilst these two cases are in the personal†injury arena, the ramifications of the†decisions and guidance from the Court of†Appeal are relevant to all involved in†litigation.

BACKGROUND

Halsey was a clinical negligence case†brought by Mrs Halsey over the death of†her husband. Steel was a case concerning†apportionment between two different†defendants where the claimant had been†injured as a result of two successive torts,†and liability for both accidents had been†admitted.

The claimant in Halsey and the first†defendant in Steel had made repeated offers†to the defendant and second defendant†respectively to mediate, backed up by the†threat of seeking costs sanctions for a†refusal. The offers were declined.

In Halsey, the main reasons given for the†refusal to participate in mediation were†that: liability was in dispute and no offers†to settle would be made; it was†disproportionate to hold a mediation†given the value of the claim; and the†claimant's offers to mediate were†perceived to be tactical to extract an†economic settlement from the defendant†(the claimant's solicitors being on a†conditional fee agreement with a 100%†success uplift but not backed by an†insurance policy).

In Steel the two defendants had†fundamental differences on interpretation†of the law on apportionment, which was†the subject of Part 20 contribution†proceedings brought by the first defendant†against the second defendant.

The claimant in Halsey and the first†defendant in Steel were unsuccessful at†trial. Both unsuccessful parties submitted to†the Court that a costs sanction should be†imposed on the successful party for...