The claimants Yorkshire Bank, had been involved in litigation with the defendants in respect of four coaches that the claimants had engaged RDM Asset Finance Limited to recover and sell. The claimants at trial had been successful in respect of only one of the coaches, but nonetheless recovered £65,000 together with interest. The claimant therefore claimed its costs. It accepted that the costs would be discounted because it was successful in respect of only one of the four coaches, but argued that the reduction should be minimal because the defendant had unreasonably refused to mediate.
If a claimant is in part successful and is therefore to receive a proportion of its costs in order to reflect the level of success, then should that reduction to the level of costs recoverable be less than it might have been if the defendant had not reasonably refused to mediate?
Judge Langan QC held that the sum of £65,000 was a substantial recovery in respect of the claim. Taking into account the amount of the claim and the recovery, he concluded that the claimants would normally receive 50% of their costs in order to reflect their success.
However, he then had to consider whether the defendant had unreasonably refused to mediate, and whether the claimant should therefore obtain additional costs because of that refusal. During the litigation the claimant’s solicitors had suggested mediation but the defendants replied stating that they could see no benefit in attempting mediation.
The judge considered three matters. First, the nature of the dispute, which was essentially factual, and it was therefore unlikely that one side or the other could predict that they would be right or wrong. Second, the character of the individuals involved, and the judge concluded that they were all sensible commercial people who if placed around a table in a mediation might well have settled. Finally, both parties had some particular weaknesses in their case which they would have realised at a mediation. He concluded that the defendant’s refusal to mediate was unreasonable. He therefore increased the cost recovery of the claimant from 50% to 65% of the costs.
*Full case details
(1) Yorkshire Bank Plc (2) Clydesdale Bank Asset Finance Limited vs (1) RDM Asset Finance Limited (2) John Broadhurst (t/a J B Coach Sales), 30th June 2004, QBD (Merc) Judge Langan QC.
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This is another case relating to a litigant’s unreasonable refusal to mediate. As a result, the defendants suffered cost penalties. The judge took into account three matters when considering whether the refusal to mediate was unreasonable. While he does not refer to Halsey v NHS Trust he appears to be applying several factors that were identified by the Court of Appeal in that case. In particular, he notes that the dispute was mainly a factual one and that it was therefore impossible to determine who might have won or lost at trial. As a result, the defendant should have considered that risk and seriously considered mediation, which would have provided the opportunity for the parties to reach a commercial settlement, and thus avoid trial.