Halsey v Milton Keynes General NHS Trust

A successful party who refused alternative dispute resolution should be deprived of costs only where the unsuccessful party proves that the refusal was unreasonable. Reasonableness depends on all the circumstances. Relevant factors include the dispute’s nature and merits, earlier settlement attempts, the proportionality of mediation costs, possible delay and whether mediation had a reasonable prospect of success. There is no presumption favouring mediation.

The court may encourage mediation robustly but should not compel truly unwilling parties. A public body receives neither special protection nor special disadvantage under the costs test.

Where successive torts occur, the second tortfeasor does not cause damage already inflicted by the first, even if the second event would otherwise have caused the same damage.

Two appeals were heard together. In Halsey v Milton Keynes General NHS Trust, a fatal-accident claim alleging negligent hospital treatment was dismissed by Milton Keynes County Court. The claimant challenged the award of costs to the successful NHS trust because it had repeatedly declined invitations to mediate.

In Steel v Joy and Halliday, Newcastle upon Tyne County Court determined Part 20 proceedings arising from two successive road accidents. The Recorder held that the second defendant had not caused the long-term acceleration of spinal symptoms already caused by the first accident. The first defendant appealed that finding and the costs award, relying on the second defendant’s refusal to mediate.

The common costs question was when a successful litigant’s refusal to participate in alternative dispute resolution justifies departure from the usual costs order. The second appeal also raised the causal responsibility of successive tortfeasors and the availability of contribution under the Civil Liability (Contribution) Act 1978.

1. Both appeals were dismissed. The general rule under the Civil Procedure Rules is that the unsuccessful party pays the successful party’s costs. A successful party’s refusal to mediate justifies departure from that rule only if the unsuccessful party proves that the refusal was unreasonable.

2. There is no presumption in favour of mediation. Reasonableness must be assessed from all the circumstances. Relevant but non-exhaustive factors include the nature of the dispute, the merits, previous settlement efforts, disproportionate mediation costs, prejudicial delay and whether mediation had a reasonable prospect of success. No single factor is necessarily decisive. A reasonable belief in a strong case may justify refusal, whereas an unreasonable belief that a case is watertight does not.

   The unsuccessful party also bears the burden of showing that mediation had a reasonable prospect of success. That prospect is not the exclusive or critical question because the parties’ willingness to compromise and the reasonableness of their attitudes must also be considered.

3. The court may encourage mediation robustly, and refusal following strong judicial encouragement increases the risk of a costs sanction. It should not compel truly unwilling parties to mediate. Compulsion would obstruct access to the court, risk unnecessary expense and delay, and undermine the voluntary character of mediation. Public bodies are subject to the same reasonableness test as other litigants; a governmental ADR pledge adds no independent weight.

4. In Halsey v Milton Keynes General NHS Trust, the trust reasonably believed that it had a strong defence. The claimant’s invitations were tactical, mediation costs were disproportionate to the claim and trial costs, and no reasonable prospect of settlement was proved. The costs order therefore stood.

5. In Steel v Joy and Halliday, the second defendant’s refusal was reasonable because the dispute raised a point of law, the claim against him lacked merit, mediation was unlikely to succeed and would have been relatively expensive, and the invitation came late. His costs order also stood.

6. On causation, Performance Cars Ltd v Abraham [1962] 1 QB 33 remained good law and governed the successive-accident issue. The second tortfeasor did not cause damage already inflicted by the first, notwithstanding that the second accident would have caused equivalent damage if the first had not occurred. The defendants were not concurrent tortfeasors, so contribution in respect of that damage did not arise.

1. Court of Appeal (Civil Division): In Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576, dismissed both appeals. It upheld the respective costs orders and the causation determination in the second appeal.
2. Milton Keynes County Court: His Honour Judge Charles Harris QC dismissed the fatal-accident claim and ordered the claimant to pay the successful NHS trust’s costs.
3. Newcastle upon Tyne County Court: Mr Recorder Thomas QC determined the Part 20 causation issue for the second defendant and ordered costs to follow the event.