CIP Properties (AIPT) Ltd v Galliford Try Infrastructure Ltd
| Jurisdiction | England & Wales |
| Judge | The Honourable Mr. Justice Coulson,The Hon. Mr Justice Coulson |
| Judgment Date | 29 October 2014 |
| Neutral Citation | [2014] EWHC 3546 (TCC) |
| Docket Number | Case No: HT-13-390 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 29 October 2014 |
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[2014] EWHC 3546 (TCC)
The Honourable Mr. Justice Coulson
Case No: HT-13-390
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Nicholas Baatz QC and Frances Pigott (instructed by Squire Patton Boggs) for the Claimant
Adam Constable QC and Richard Coplin (instructed by CMS Cameron McKenna) for the Defendant
Joanna Smith QC and Michael Wheater (instructed by Plexus Law) for the Third Party
Kate Livesey (instructed by Norton Rose Fulbright) for the Fourth Party
Fiona Sinclair QC (instructed by Mills and Reeve LLP) for the Fifth and Sixth Parties
Hearing date: 3 October 2014
Approved Judgment
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
During the course of the review CMC in this case, on 3 October 2014, two issues of principle arose. The first was concerned with the interaction between ADR and case management in the TCC. The second raised a potentially important issue in relation to the court's powers to order the filing and exchange of costs budgets in cases where the claim is worth in excess of £2 million (old regime) or £10 million (new regime). I dealt with the first point during the hearing, but said I would produce a written judgment setting out my views in more detail. I reserved the second point entirely, and was then provided with further written submissions which significantly widened the scope of the dispute about costs budgets. This short Judgment deals with both issues.
By way of background, I should record that this is a claim by assignees in respect of alleged defects at a large development on the site of the former children's hospital in Ladywood, Birmingham. The claim for damages against the main contractors, Galliford Try, is based principally on the actual/estimated costs of remedial works. It is put in the region of £18 million. Galliford Try have issued third party proceedings against the architects and certain of their sub-contractors. The trial estimate is currently six weeks and I am told that it may take longer. Expert evidence in numerous disciplines will be required.
A 'Window' or Stay for ADR
Often at a CMC, one or more of the parties will seek a stay of the proceedings whilst they endeavour to resolve their disputes by way of mediation or some other form of ADR. There can either be an application for an immediate stay, or for a stay further down the line, sometimes after disclosure or after the exchange of witness statements or expert's reports. As an alternative, the party making the application will not seek a formal stay of proceedings, but will instead ask the court to identify and fix a 'window' in the timetable, which can commonly be as long as three or four months, during which it is proposed that the parties can put the proceedings on hold and devote their attention to resolving the dispute by way of ADR.
The judges in the TCC set great store by ADR. Disputes like this one are time-consuming and therefore expensive to fight out in the traditional way. Even if the court adopts all the various techniques for reducing the trial to a minimum (such as 'hot-tubbing' the experts and carefully timetabling the cross-examination), trials are often unwieldy and cost-inefficient. Expert's fees often account for a large proportion of the costs. A professional mediator, engaged at the right time in the process and in the right spirit of cooperation by the parties, will often be able to resolve the most intractable case and save everyone a good deal of money, time and effort. The TCC lists in London would be impossible to operate without the good work of mediators and others involved in the ADR process.
In consequence, when setting directions for the trial of a large TCC case, such as this, the court will allow a reasonable period between each step in the process, so that the parties not only have sufficient time to take that step, but also have an opportunity to reflect and consider their positions before incurring the next tranche of costs. Commonly, the court will identify a period of two months or so between, say, disclosure and the exchange of witness statements, or between the exchange of witness statements and the production of the experts' joint statement (a document which, in the TCC, usually comes before the reports themselves, in order to ensure that the reports simply focus on those matters on which the experts are not agreed). Such a period is usually long enough, in all but the most complex cases, to allow the parties to engage in ADR between those two steps, if they are agreed that this is a sensible course.
In this way, the TCC endeavours to facilitate the ADR process at each stage of the litigation, whilst also keeping at the forefront of its consideration the requirement to put in place a cost-efficient and sensible timetable to lead up to a fixed trial date (on the assumption – which the court must make for these purposes – that there will be an effective trial). The fixing of the trial date, which often then dictates the timetable itself, is one of the critical elements of any CMC in the TCC. The trial date needs to be as soon as reasonably possible in order to ensure that costs do not get out of control, but not so soon that the parties have no time to reflect or even pause for breath in the preparation process.
For these reasons, it is usually inappropriate for the court at a CMC to build in some sort of special 'window' of three or four months in order that the court proceedings can be put on hold whilst the parties engage in ADR. Such a course inevitably delays the trial date by the period of the 'window'. That delay will then inevitably increase the costs of the case. Thus, in my view, the fixing of any lengthy 'window', for purposes unconnected with the preparation for trial, is bad case management.
Such a course is even less appropriate in circumstances, such as the present case, where there is a dispute about when the 'window' should be. Here the claimants vehemently oppose the fixing of the 'window' before disclosure, the course proposed by the other parties. The claimants say they need disclosure before they can engage in a meaningful mediation. As assignees, their position is readily understandable: they will not have seen, let alone have been party to, much of the contemporaneous documentation. Not only is it inappropriate for the court to decide a dispute as to precisely when the parties should mediate (it is a consensual process so that must always be a matter for the parties), but it is wrong in principle for the court to fix a 'window' for ADR at a time when at least one significant party – in this case the claimants – positively does not want it.
Staying the whole proceedings to allow ADR or mediation to take place is an even worse option. It has all the disadvantages previously mentioned but, in addition, it can create uncertainties and the potential for tactical games-playing. The case of Roundstone Nurseries Ltd v Stephenson Holdings Ltd [2009] EWHC 1431 (TCC), where a stay for mediation did not lead to a settlement, and one party then sought to enter judgment against the other because of a mix-up about when the stay came to an end, is a good example of the sort of thing that can happen when proceedings are stayed and one party resorts to a purely tactical stance.
A sensible timetable for trial that allows the parties to take part in ADR along the way is a sensible case management tool. A stay or a fixed 'window' is likely to lead to delay, extra cost and uncertainty, and should not ordinarily be ordered. The same applies, a fortiori, if the stay or the 'window' proposed is opposed by a significant party to the litigation. It has to be recognised that the requirements of ADR, on the one hand, and sensible case management to lead up to a prompt trail date, on the other, can sometimes be at odds: what is appropriate for one process may not be appropriate for the other. At a CMC, I take the view that, to the extent that there is such a clash, sensible case management must come first.
As I have already stressed, none of this is designed to undermine the importance of ADR, or the adverse costs consequences that may be visited on those parties who do not engage in that process (see for example Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ. 576). It is simply to emphasise that parties must take all proper steps to settle the litigation whilst at the same time preparing the case for trial. It is not an either/or option.
For all those reasons, as I told the parties at the hearing, I decline to order a 'window' of four months prior to disclosure in this case, a course of action and a time slot which the claimants oppose.
Costs Budgets: Introduction
During the exchange of the helpful notes, prepared by counsel in advance of the review CMC on 3 October 2014, the defendant raised the possibility that, although the filing and exchanging of costs budgets pursuant to CPR 3.13 was not compulsory in this case (because, when the claim was started, the mandatory limit was £2 million, and even now that limit is only £10 million, whilst the claim is for £18 million), the court should exercise its discretion in favour of ordering such budgets to be provided. The various third parties supported the defendant in that application. The claimants opposed...
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