A High Court judge has awarded interim costs of more than £300,000 after finding that although the defendant refused mediation, it had not ‘refused to engage’ in alternative dispute resolution.
In MJS Projects (March) Limited V RPS Consulting Services Limited, contractor MJS Projects (March) Limited argued that the judge should depart from the usual order – that costs follow the event – following the dismissal of its claim because of professional services firm, RPS Consulting Services Limited’s ‘unreasonable failure to mediate’. RPS argued there was no reason to depart from the usual order.
Her Honour Judge Kelly, sitting as a judge of the High Court in Leeds, found the ‘appropriate order’ was the ‘usual order and so the claimant shall pay the costs of the defendant'.
Noting the Court of Appeal’s ruling in Halsey v Milton Keynes General NHS Trust, the judgment said: ‘Mediation is not the only, nor the preferred, method for parties engaging in ADR. I accept that the defendant did not agree to the continued suggestions of mediation without having some understanding of the expert evidence. That cannot be described as unreasonable in my judgment. However, other forms of ADR were proposed by the defendant throughout and, in addition, offers were being made by the defendant.’
The judge noted that mediation might have cost up to £50,000 - a ‘not insignificant sum’, but ‘this is not a case where a defendant refused to engage in ADR at all’.
‘The defence made various offers to settle, including a final offer of £200,000 about three weeks before trial,’ she added, describing the ‘commercial settlement offer’ as ‘generous’.
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Finding a costs order should be made, the judge said: ‘In light of the dismissal of the claim and the almost wholesale rejection of the claimant’s expert evidence, the defendant’s assessment of the strength of its case was justified’.
She added: 'The defendant’s reasoned rejection of one form of ADR, namely mediation, was not unreasonable. Even had mediation taken place, I do not accept that it would have had reasonable prospects of success in this case.'
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