Developing his scenario of a multiparty action, a claimant could commence the action and make application for a stay pending mediation, knowing that even if his opponent had professional indemnity insurance it would only offer minimal compensation for his alleged loss. With premiums and excesses having leaped up to 300% since 9/11, it is a fair bet that the practice will take a long-term view and settle. Alternatively, if insurers are instructed to defend, costs of up to £100,000 could be incurred before finishing the mediation process – which are unrecoverable.
The speculative claimant can then string things along, with no intention of agreeing anything except a coerced settlement. Alternatively, he can play "heads I win, tails you lose" and disappear if the mediator indicates his case has little merit.
In a one case, it has taken over a year for the claimant to comply with court orders and it has still not committed to a mediation timetable. Meanwhile, the defendant is relying on bank support far in excess of its asset value.
Henchie is therefore right. The CPR must be amended to allow for a defendant's wasted costs – or the courts should only allow stays for mediation subject to tight timetables and penalty costs for a party dragging its feet.
Jeremy Hackett, Schofield Lothian, via email.