All cases end one way or another. If there is a victor, there is a loser. If there is no victor, there will only be losers. But one thing is certain. Unless each party agrees that they will pay their own legal costs, there will need to be a discussion about who pays what in costs. If the parties cannot reach an agreement about how much that should, it will be back to the court for a judge to decide. If that happens (the process is called “detailed assessment”) it will mean a fresh set of legal proceedings, more costs and another day (or days) in court.
If, however, that has been the way costs arguments have traditionally been resolved, the past decade has experienced a growing enthusiasm by the Great and the Good (by which is controversially meant – the government and senior judiciary) to keep solvable disputes out of court. The way to do that, they
agree, has been in the greater use of Alternative Dispute Resolution (“ADR”), the best known method of ADR being mediation.
In this context, there have been two key moments within the past six months which have exemplified the drive towards compulsory Mediation in preference to detailed assessment by a judge. In Elphike v Times Media Ltd [2024] EWHC 2595 (KB), Master McCloud had ruled that Mr Elphike should pay 80% of the
newspaper’s costs, but that before they could be quantified by the court, the parties would need to engage in ADR at a level not less than mediation, with input being required of costs lawyers. The upshot? No day in court unless the parties mediated first.
The second moment. In a fireside chat to members of the Association of Costs lawyers in February, Lord Justice Peter Coulson had this to say when asked by Neil Rose, editor of Legal Futures, if he thought costs were particularly well suited to ADR.
“I do and I consider this an obvious solution where the costs are more than £100,000. I think you should have compulsory adjudication, with decisions temporarily binding. The money has to be paid before either party can challenge it.
“It’s worked brilliantly for construction disputes. There are major similarities with costs disputes. Construction will never go back to a non-compulsory adjudication position. When I hang up my wig and I’m an arbitrator or an adjudicator, I’d be very happy to do costs adjudications.”
Nothing could be clearer! Mandatory mediation in costs is just around the corner and remember, parties who unreasonably refuse to mediate, or do so with no real intention of trying to settle, will do so at their peril as to costs. The jurisdiction of the court to make wasted costs orders or to deprive parties of their costs is wide. Those lawyers who do not wise-up now, or fail to play the game, will find at considerable expense to themselves and to their clients.