Hurst v Leeming

A party may be penalised in costs for refusing mediation without good reason, although mediation is not compulsory. The absence of any realistic prospect of success may justify refusal. In assessing that prospect, the court may consider the opposing party’s past conduct and attitude, particularly where the claim is hopeless and has been maintained despite clear evidence of its defects. The conduct of the parties is relevant under Civil Procedure Rules 1998, rule 44.3(4), and a response to an ADR proposal may be relevant under the professional negligence pre-action protocol. A fair-minded and informed observer would not infer a real possibility of judicial bias merely from professional contact or historic support for a barrister’s club membership.

The claimant, appearing in person, brought proceedings against his former counsel after earlier litigation arising from the dissolution of a solicitors’ partnership. Lightman J entered summary judgment dismissing the claim. The substantive parts of the order were marked by consent, while the claimant was ordered to pay £55,000 costs.

The claimant renewed an application for permission to appeal. He sought to resile from withdrawing his claim, challenged the judge’s impartiality, and argued that the refusal to mediate should have prevented or reduced the costs order. The Court of Appeal considered whether there was any arguable basis for challenging the consent disposition or the costs decision.

1. Application dismissed. The renewed application for permission to appeal was refused because the proposed appeal had no real prospect of success.
2. A court may permit a party to resile from withdrawing a claim or from a consent order only for a sufficiently strong reason. Fraud, mistake and misrepresentation are traditional grounds, and none was alleged. The applicant’s contention that the order was not truly consensual therefore disclosed no arguable basis for appeal.
3. The test for apparent bias is whether a fair-minded and informed observer would conclude that there was a real possibility of bias. Professional dealings between the applicant and judge, and historic support by the judge for the respondent’s membership of a club, did not satisfy that test. The applicant’s failure to object at the hearing was also relevant.
4. The professional negligence pre-action protocol, paragraph B6.3, makes a party’s reasons for refusing ADR potentially relevant to costs. The conduct of the parties is also relevant under Civil Procedure Rules 1998, rule 44.3(4). Mediation is not compulsory, but refusal without good reason may attract a costs penalty.
5. Dunnett v Railtrack Plc did not prescribe an exhaustive list of relevant factors. A party may reasonably decline mediation where there is no realistic prospect of success. The opposing party’s past conduct and attitude may help establish that absence of prospect. That conclusion will be unusual and requires substantial evidence, but it was justified here by the hopeless claim, the detailed explanation of its defects, and the claimant’s persistence in litigation despite that explanation.
6. The applicant’s reliance on a proposed negligence claim concerning an omitted schedule faced formidable causation and remedy difficulties. The unusual nature of the account sought had also been identified in Hurst v Bryk. Those matters supported the conclusion that mediation had no realistic prospect of success.

• Court of Appeal (Civil Division): Lightman J had entered summary judgment dismissing the claim and ordered the claimant to pay £55,000 costs. Chadwick LJ refused permission on paper. The Court of Appeal renewed the application and refused permission.