1. Jane Laporte and Another v The Commissioner of Police of the Metropolis
| Jurisdiction | England & Wales |
| Judge | Mr Justice Turner,The Hon Mr Justice Turner |
| Judgment Date | 19 February 2015 |
| Neutral Citation | [2015] EWHC 371 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: HQ12X00694 |
| Date | 19 February 2015 |
[2015] EWHC 371 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Turner
Case No: HQ12X00694
Phillippa Kaufmann QC and Martha Spurrier (instructed by Bhatt Murphy) for the Claimants
George Thomas and Cecily White (instructed by Metropolitan Police Service) for the Defendant
Approved Judgment on Costs
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
INTRODUCTION
In this case, the claimants lost for reasons set out in the judgment to be found at Laporte and another v The Commissioner of the Police of the Metropolis [2014] EWHC 3574 (QB). They assert, however, that there should be no order for costs because the defendant refused to engage in ADR. In response, the defendant not only seeks an award of costs against the claimants but contends that they should be assessed on an indemnity basis and that a payment on account of £100,000 should be made.
In resolving these issues I am, once again, grateful to the industry of counsel who have served detailed and lengthy skeleton arguments setting out both the legal framework and the factual background to their respective contentions.
THE LEGAL FRAMEWORK
The general rules about costs are to be found in CPR Part 44.
CPR 44.2 (1) provides that decisions relating to costs are in the discretion of the court:
(1) The court has discretion as to –
(a) whether costs are payable by one party to another;
(b) the amount of those costs; and
(c) when they are to be paid.
CPR 44.2 (2) establishes the general rule that costs will follow the event:
(2) If the court decides to make an order about costs –
(a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but
(b) the court may make a different order.
CPR 44.2 (3) provides for exceptions to the general rule which do not apply to this case.
CPR 44.2 (4) identifies the circumstances to which the court is to have regard when exercising its discretion in making decisions about costs:
(4) In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including –
(a) the conduct of all the parties;
(b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and
(c) any admissible offer to settle made by a party which is drawn to the court's attention, and which is not an offer to which costs consequences under Part 36 apply.
The burden of persuasion therefore rests on the claimants with respect to their contention that there should be no order for costs and upon the defendant on his claim that costs should be assessed in his favour on the indemnity basis.
ALTERNATIVE DISPUTE RESOLUTION
The term "alternative dispute resolution" ("ADR") is defined in the glossary to the CPR as a "collective description of methods of resolving disputes otherwise than through the normal trial process". One such process is, of course, mediation.
In Halsey v Milton Keynes General NHS Trust [2004] 1 WLR 3002 the Court of Appeal acknowledged the potential benefits of ADR whilst recognising that, ultimately, the court has no power to order parties to engage in it. Robust encouragement may well be appropriate. Compulsion is not.
The central issue in Halsey was how the successful litigant previously recalcitrant on the issue of ADR should fare on the issue of costs. Dyson L.J. held at para 13:
"In deciding whether to deprive a successful party of some or all of his costs on the grounds that he has refused to agree to ADR, it must be borne in mind that such an order is an exception to the general rule that costs should follow the event. In our view, the burden is on the unsuccessful party to show why there should be a departure from the general rule. The fundamental principle is that such departure is not justified unless it is shown (the burden being on the unsuccessful party) that the successful party acted unreasonably in refusing to agree to ADR."
The Court went on to identify some of the factors which fall to be considered when addressing the issue as to whether or not a refusal to agree to ADR is to be regarded as having been unreasonable and held at para 16:
"The question whether a party has acted unreasonably in refusing ADR must be determined having regard to all the circumstances of the particular case. We accept the submission of the Law Society that factors which may be relevant to the question whether a party has unreasonably refused ADR will include (but are not limited to) the following: (a) the nature of the dispute; (b) the merits of the case; (c) the extent to which other settlement methods have been attempted; (d) whether the costs of the ADR would be disproportionately high; (e) whether any delay in setting up and attending the ADR would have been prejudicial; and (f) whether the ADR had a reasonable prospect of success. We shall consider these in turn. We wish to emphasise that in many cases no single factor will be decisive, and that these factors should not be regarded as an exhaustive check-list."
In PGF II SA v OMFS Co 1 Ltd [2014] 1 W.L.R. 1386, the Court of Appeal revisited Halsey and, in particular gave guidance as to the proper approach to the issue of costs in cases in which the winning side had failed adequately to articulate its earlier failure to engage in ADR. Briggs L.J. concluded at para 30 that the advice given in the ADR Handbook (2013) was sound:
"The ADR Handbook, first published in 2013, after the period relevant to these proceedings, sets out at length in para 11.56 the steps which a party faced with a request to engage in ADR, but which believes that it has reasonable grounds for refusing to participate at that stage, should consider in order to avoid a costs sanction. The advice includes: (a) not ignoring an offer to engage in ADR; (b) responding promptly in writing, giving clear and full reasons why ADR is not appropriate at the stage, based if possible on the Halsey guidelines; (c) raising with the opposing party any shortage of information or evidence believed to be an obstacle to successful ADR, together with consideration of how that shortage might be overcome; (d) not closing off ADR of any kind, and for all time, in case some other method than that proposed, or ADR at some later date, might prove to be worth pursuing. That advice may fairly be summarised as calling for constructive engagement in ADR rather than flat rejection, or silence."
And at para 34:
"In my judgment, the time has now come for this court firmly to endorse the advice given in para 11.56 of the ADR Handbook, that silence in the face of an invitation to participate in ADR is, as a general rule, of itself unreasonable, regardless whether an outright refusal, or a refusal to engage in the type of ADR requested, or to do so at the time requested, might have been justified by the identification of reasonable grounds. I put this forward as a general rather than invariable rule because it is possible that there may be rare cases where ADR is so obviously inappropriate that to characterise silence as unreasonable would be pure formalism. There may also be cases where the failure to respond at all was a result of some mistake in the office, leading to a failure to appreciate that the invitation had been made, but in such cases the onus would lie squarely on the recipient of the invitation to make that explanation good."
The Court went on to emphasise at para 51 that a failure to engage with ADR did not mechanistically disentitle the successful party to claim all of its costs:
"… a finding of unreasonable conduct constituted by a refusal to accept an invitation to participate in ADR or, which is more serious in my view, a refusal even to engage in discussion about ADR, produces no automatic results in terms of a costs penalty. It is simply an aspect of the parties' conduct which needs to be addressed in a wider balancing exercise. It is plain both from the Halseycase [2004] 1 WLR 3002, itself and from Arden LJ's reference to the wide discretion arising from such conduct in SG v Hewitt [2013] 1 All ER 1118, that the proper response in any particular case may range between the disallowing of the whole, or only a modest part of, the otherwise successful party's costs.
52 There appears no recognition in the Halsey case that the court might go further, and order the otherwise successful party to pay all or part of the unsuccessful party's costs. While in principle the court must have that power, it seems to me that a sanction that draconian should be reserved for only the most serious and flagrant failures to engage with ADR, for example where the court had taken it on itself to encourage the parties to do so, and its encouragement had been ignored. In the present case the court did not address the issue at all. I therefore have no hesitation in rejecting Mr Seitler's submission that the judge did not go far enough in penalising the defendant's refusal to engage with ADR."
OTHER ISSUES
In addition to the defendant's approach to ADR, the claimants rely upon the defendant's failure to reply to the letter of claim and upon errors in its schedule of costs.
THE FACTUAL BACKGROUND
ADR
It was Mr Dutta on behalf of the claimants and Ms Fowler, an employed barrister working in the defendant's Directorate of Legal Services on behalf of the defendant, who were responsible for the progress of the procedural stages on behalf of their respective clients.
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