Paul Richards v Speechly Bircham LLP

JurisdictionEngland & Wales
Judgment Date16 June 2022
Neutral Citation[2022] EWHC 1512 (Comm)
CourtQueen's Bench Division (Commercial Court)
Docket NumberCase No: LM-2020-000172
(1) Paul Richards
(2) Keith Purves
(1) Speechly Bircham LLP
(2) Charles Russell Speechlys LLP

[2022] EWHC 1512 (Comm)


HH JUDGE Russen Qc

(Sitting as a Judge of the High Court)

Case No: LM-2020-000172




Rolls Buildings

Fetter Lane



Richard Leiper QC (instructed by Cardium Law Limited) for the Claimants

Nigel Tozzi QC and Alexander Wright QC (instructed by Norton Rose Fullbright LLP) for the Defendants


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.


HHJ Russen QC:


This is my judgment on the consequential matters arising out of my judgment dated 29 April 2022: [2022] EWHC 935 (Comm) (“the Judgment”). It addresses the following matters: (1) costs down to judgment; (2) interests on the Claimants' damages; (3) the Claimants' and the Defendants' respective applications for permission to appeal; and (4) the costs relating to this judgment (foremost, the costs incurred in making the submissions addressed in paragraph 3 below). Separate Forms N460 respect of the third matter have been provided to the parties.


I indicated at paragraph 515 of the Judgment that, in the absence of any further direction for an oral hearing, I would determine these matters on the basis of the parties' written submissions. Having received them, it appeared to me that the matters could fairly and justly be decided on the papers and the parties agreed that was the appropriate way forward.


In reaching the decisions below I have considered the following documents:

a. the Claimants' Submissions on Consequential Matters dated 28 April 2022 (with draft of proposed Order attached);

b. the Defendants' Submission on Interest and Costs dated 6 May 2022 (with draft of proposed Order attached and other attachments);

c. the Claimant's Reply Submissions on Consequential Matters dated 11 May 2022, together with the clip of relevant pre-action, without prejudice (“WP”) and without prejudice save to costs (“WPSATC”) correspondence passing between the parties;

d. the Defendants' Submissions on Permission to Appeal (and attached Grounds of Appeal) dated 13 May 2022;

e. the Claimants' Application for Permission to Appeal dated 13 May 2022;

f. the Claimants' Response to the Defendants' Application for Permission to Appeal dated 1 June 2022; and

g. the Defendants' Response to Claimants' Application for Permission to Appeal dated 1 June 2022.


It has not been possible for me to act upon the Defendants' request (paragraph 20 of the Submissions dated 6 May 2022) that I should rule on the question of interest and costs before the applications for permission to appeal. Given the discretionary element of the decisions on the first two matters it would perhaps be unlikely that I would have granted permission to appeal against either, though I will provide for the “standard” 21 day period under CPR 52.12 for any further application by the Defendants to the Court of Appeal.



The Claimants say they are the successful party under the Judgment and that under the general rule ( CPR 44.2(2)(a)) the Defendants should be ordered to pay their costs of the proceedings. They seek the assessment of those costs on the indemnity basis, on the ground of what is said to have been the Defendants' unreasonable refusal to engage in mediation.


They also seek a payment on account of their costs recovery ( CPR 44.2(8)) in the sum of £787,388.40 including VAT (£656,157 excluding VAT). That sum is calculated by taking 75% of the incurred costs and 90% of the approved estimated costs as those appeared in the front sheet of the Claimants' costs budget appended to the Order of HHJ Pelling QC dated 16 April 2021.


The Defendants accept that they are liable to pay the Claimants' costs. However, they say the assessment should be on the standard basis. They say an appropriate payment on account the costs would be £600,000 including VAT.


In support of the application for indemnity costs, Mr Leiper QC pointed to four offers by the Claimants to mediate contained in WPSATC correspondence between 21 December 2018 and 17 December 2020. All but the last was made before the Claim Form was issued on 22 September 2020. The Defendants' response to the first offer (made by letter dated 21 December 2018) was to say they did not consider that a mediation would be productive or cost effective at that stage. Their letter dated 3 January 2019 said they would keep the merits of some form of ADR under review once full disclosure had been given. The second offer of mediation (or some other form of ADR which might be useful in narrowing the issues between the parties, perhaps by focusing upon causation and loss) was made on 24 May 2019. The Defendants responded on 7 June 2019 to say that there was no point in engaging in mediation or ADR as the claim was doomed to fail. The third offer, made by letter dated 11 September 2020 and by reference to draft Particulars of Claim, was met with the same response that there was no point in a mediation because the claim was entirely without merit. The fourth offer, made by a letter dated 13 December 2020 in the light of the Defence and in advance of a CCMC, again elicited the response that there was little point in having a mediation over an unmeritorious claim. That response dated 17 December 2020 also referred to the expense of a mediation and indicated that the Defendants would be prepared to have a short without prejudice call between solicitors to explain why a Part 36 offer of £500,000 made by them the previous month would not be increased.


Mr Leiper QC described this as a high-handed approach by the Defendants which was no doubt intended to overawe the Claimants and dissuade them from pursuing their claim.


He relied upon the decision of HHJ Waksman QC (as he then was) in Garritt-Critchley v Ronnan [2014] EWHC 1774 (Ch); [2015] 3 Costs LR 453. In that case the judge acceded to the claimants' application for indemnity costs based principally upon the defendants' failure to engage in mediation. As appears from the judgment on the application, the defendants had resisted the claimants' suggestion of mediation by saying that the positions of the parties were too far apart and, later, that they were confident of their position and did not consider there was any realistic prospect of the claimants succeeding. The main issue in the case was the factual one of whether or not a binding agreement for the issue of shares had been reached. If the claimants had established one had been concluded, the judge said there was a “ sliding scale of compensatory award” and that it had become apparent to him during the course of the trial that the range was “ really very considerable indeed.”


It is important to note that in Garritt-Critchley the court was deciding the application for indemnity costs in circumstances where, after a 4 day trial but before the judge gave his judgment on the claim, the defendants belatedly accepted the claimants' Part 36 offer to accept the sum of £10,000 plus their costs to date. That offer had been preceded by an earlier one under which the claimants had sought payment of £170,000, together with their costs, and also one by which the defendant offered to accept three-quarters of their costs upon the claimant discontinuing the claim. In support of his conclusion that the defendants' failure to engage in mediation or any other serious ADR was unreasonable, the judge said their reasons for not doing so did not “ stack up”. In particular, the binary nature of the issue on liability, being one of fact, was one where both parties needed to engage in an analysis of the risk of their case not being accepted. The wide range of possible quantum scenarios was also an aspect which rendered the case suitable for mediation, as did a mediator's ability to defuse the emotion in the case and any feelings of distrust between the parties.


Mr Leiper QC also relied upon the reference in Costs & Funding Following the Civil Justice Reforms (8 th ed, as contained in the 2022 White Book supplement) to the constant pressure from the judiciary and court users for greater use of ADR.” He said the defendant firm was particularly well-placed to appreciate this encouragement rather than disregard it.


The Defendants resist an order for costs on the indemnity basis by saying their approach to mediation was not unreasonable and that, in any event, an unreasonable refusal to mediate is only one facet of a party's conduct to be taken into account when determining costs. For the first point they relied upon the decision of Ramsey J in Northrop Grumman Mission Systems Europe Ltd v BAE Systems (Al Diriyah C4l) Ltd [2014] EWHC 3148 (TCC); [2014] 6 Costs LO 879 and for their second upon the decision of the Court of Appeal in Gore v Naheed [2017] EWCA Civ 369.


The first point was made by reference to the WPSATC correspondence relied on by the Claimants and also the Part 36 offers made by the parties: by the Claimants on 9 February 2021 in the sum of £4.25m, by the Defendants in the sum of £500,000 on 23 November 2021, and another one by the Claimants on 11 February 2022 in the sum of £3.5m. The Defendants also referred to without prejudice discussions between Leading Counsel as being consistent with a serious attempt by the Defendants to settle the dispute, though, as Mr Leiper QC observed, they remain privileged. He also said the first discussion took place on 2 February 2022 which he described as “the eleventh hour” in relation to the trial.


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