Landmark mediation decision: costs impact?
In a recent medical negligence case, Mr Justice Kevin Feeney directed that the plaintiff and defendant should engage in mediation before the trial of the action due before the court. This significant judgement was issued in the case of Carmel McManus v Liam Duffy and involved a willing plaintiff and an unwilling defendant in an application for a mediation conference.
The judge noted that there was no case guidance on section 15 of the Civil Liability and Courts Act 2004 in this jurisdiction. He noted that it was an important section and that, where one party did not wish to mediate, a court could exercise its power to compel a mediation conference following an application by either party.
Assisting settlement
Section 15 of the 2004 act provides that, on request of any party to a personal injuries action, a court may at any time before the trial of the action direct that the parties meet and attend a mediation conference if it considers that the holding of a meeting would “assist” in reaching a settlement.
The court also considered the language used in section 15 of the act and noted that “assist” was different from “likely” and implied that there were benefits to be gained as distinct from a likelihood of reaching a settlement.
It was noted that, in the McManus case, the defence had set out its position in correspondence at an early stage in the proceedings and had stated that it was unlikely that mediation would result in settlement. The particular interpretation of the word “assist” was important, in that mediation could determine if one side’s argument was weak. The word “assist” is a wide term, and Mr Justice Feeney was of the view that there was considerable merit in taking an open view on the matter.
The judge considered the appropriate authorities in the British jurisdiction and, in particular, the decision of the Court of Appeal in the medical negligence case Halsey v Milton Keynes General, NHS Trust ([2004] 1 WLR 3002).
The judge had to decide whether the parties were truly unwilling parties. It was his view that they were not in this case, but the fact that the defendant felt that mediation was unlikely to succeed did not mean unwillingness to proceed.
He also considered the varying principles as laid down in Halsey. In McManus, it was the judge’s view that mediation would be of benefit and would potentially assist the experts in fully understanding the differences in each party’s arguments. Moreover, mediation might reveal potential strengths and weaknesses of the parties.
England’s experience
Counsel for the plaintiff invited the court to consider two English cases, namely, Halsey and Dunnet v Rail Track Plc ([2002] 2AER850).
Various aspects of these cases, as they related to the McManus case, were considered, including the nature of the dispute, the merits of the case, whether other settlement methods had been attempted, and the cost of mediation related to the likely costs of the action itself, delays in seeking mediation and the likely success of the mediation.
In Halsey, the Court of Appeal held that the burden to satisfy the court that mediation had no reasonable prospect of success should not be on the objecting party. The fundamental question was whether it could be shown by a proposing party that the objecting party unreasonably refused to agree to mediation. The court judged that a fairer balance would be struck if the burden were placed on the proposing party to show that there was a reasonable prospect that the mediation would have been successful.
Mr Justice Feeney considered the arguments in Halsey, but directed that, in this jurisdiction, whether mediation had a reasonable prospect of success should be interpreted as meaning whether the mediation was likely to “assist”.
Implications for costs
It remains to be seen how the courts will interpret the provisions of section 16(3) of the 2004 act. This section provides that, at the conclusion of a personal injuries action, a court may, having heard submissions, make an order directing that if a party failed to comply with the direction under section 15(1) to attend a mediation conference, that party should pay the costs of the action, or such part of the costs of the action that the court directs should be incurred after giving the direction under section 15.
The issue of costs may not be a major factor in low-monetary run-of-the-mill cases. However, in significant High Court cases involving personal injuries or clinical negligence, a plaintiff can make a cogent argument pursuant to the provisions of section 16(3) that a recalcitrant defendant, refusing to engage in a mediation conference, should face the appropriate sanction in costs.
Gavan Carty is commercial partner at Kent Carty Solicitors.
Published in the March issue of the Law Society Gazette