The rule is that if you refuse to mediate before you litigate, you get walloped with the costs of the case – even if you win. This case is a very sad exception
This story is worth bringing to your attention for two reasons. First, it is the latest round in the drive to force disputing parties into the hands of a mediator, thereby saving more money than you would think … public money, too. Second, and I think much more interestingly, it is a story about a man who became obsessed, perhaps overwhelmed, by the dispute. So much so that he is now ruined. It's what happens when people dig in. It happens more frequently than is realised. It happens in construction disputes. I will tell you more about that in a moment.

"Mediation is not in law compulsory," said Mr Justice Lightman in this case of Hurst vs Leeming. "But, alternative dispute resolution is at the heart of today's civil justice system and any unjustified failure to give proper attention to the opportunities afforded by mediation, and in particular in any case where mediation affords a realistic prospect of resolution of the dispute, there must be anticipated as a real possibility that adverse consequences may be attracted."

Mark Roe's article in Building, "An offer you can't refuse" (26 April, page 58) told you about two Court of Appeal cases where the successful party in the litigation was severely criticised for refusing to mediate and then hit for the legal costs. So, er, hmmm, it's not in law compulsory – but woe betide anyone who dares to ignore it.

Ah, but the defendant in Hurst point-blank refused to mediate, fought the case in court and won. So up jumped the loser and argued that he shouldn't have to pay the winner's costs … which came to a cool £55,000. But, Mr Justice Lightman said the loser would pay notwithstanding. I'll tell you why, but first I'll tell you this: I wouldn't bank on the winning argument if I was you.

Mr Hurst is the claimant, the losing claimant. He is a solicitor. He has had a run of losing. You might in the end feel sorry for him. Hurst fell out with his partners in their practice. So he began litigating against them. It got so serious that one part of the action went to the House of Lords. He lost. He lost in the substantive action against his former partners. He had represented himself until three days into the trial, then reached for a firm of solicitors and engaged a very senior barrister.

What persuaded the judge that the refusal was right was the character of Mr Hurst. He was a man obsessed by the notion that he’d been wronged

The costs of the case crippled him financially; he is now bankrupt. Mr Hurst attributed his failure in the proceedings and his subsequent ill fortune to the legal advice and his counsel.

In due course he sued the barrister. The action came before Mr Justice Lightman. The judge tells what happened at the opening of the case: "He [Mr Hurst] and I had a frank exchange of views on the merits of the case." Gosh, I bet that was worth listening to. The judge continued: "This exchange led us both to conclude that the action had no merit and must be dismissed." There was in truth no ground for any criticism of the legal team that helped Mr Hurst. So that action was dismissed, leaving the single issue of costs.

By now, however, Mr Hurst had learned of those cases that penalised winning parties for refusing to mediate. He told the judge that he had suggested mediation and his opponent had rejected the idea. In that case, he argued there should be no award of costs against him.

The opponent gave a series of reasons for refusing mediation. The judge rejected most of them. It is not enough to say the case of the claimant was hopeless, nor enough to say that a complaint of professional negligence should be tried out, nor enough to point to legal costs already incurred. You should still mediate. What did persuade the judge that the refusal to mediate was right was the character of Mr Hurst. This was a man obsessed. He was obsessed by the notion that he had been wronged, so much so that he would not be able to adopt the attitude required if the mediation was to have a chance of success. The judge said Mr Hurst had been so seriously disturbed by the tragic course of events resulting from the partnership action that he was "a person obsessed with the injustice that he considers has been perpetrated on him and is incapable of a balanced evaluation of the facts".