Author: Michael Roberts

Years ago when I was very new to the law, I was instructed in a boundary/right of way dispute and sent to a site view in a small Berkshire town. My client was an old lady who owned quite a bit of the town. The dispute centred on a strip about 50 yards long, maybe several feet at its widest, tapering to nothing.

The dispute looked more ridiculous on the ground than it did on paper and my advice to the old lady was that she was wasting her time and money. She smiled sweetly, thanked me cordially and I left. By the time I reached home, the phone was ringing. It was my clerk. Much to his chagrin, I had been sacked.

Telling people what they do not want to hear seldom goes down well in the law, especially where boundaries and rights of way are concerned. Maybe I could have taken a more emollient approach, having ensured the prospects were fully explained and that she knew the score, and fought the two week trial that subsequently unfolded at the County Court, and which she lost spectacularly. Maybe I should have made greater allowance for the facts that she owned land that would benefit from a right of way of greater proportions and this was a trial of strength with a local developer whom she despised to a degree that the Hatfields and McCoys would have understood.

I recite this tale to illustrate the problems that face lawyers when representing litigants in cases like this. I have lost count of the times when a client would remind me that Lord Denning had said that an Englishman’s home is his castle. I am still getting it now as a mediator. Trouble is that where the boundaries of the castle begin and end is often very complex and obscure and sometimes is only resolved after one side ends up paying so much in costs that he has to sell his castle.

Most litigants have no idea how complex these matters are. Plans are often inaccurate and at variance with what is on the ground, the rules governing the admission of extrinsic evidence are a minefield. There are all kinds of arcane principles that are not always easy to apply and adverse possession is as tricky as ever to make out. Currently also, the FTT and the UT are sending out mixed messages regarding their jurisdiction under Section 60(3) of the Land Registration Act 2002 and all the foregoing is before you get to the biggest lottery of all, the judge you get on the day.

Trying to explain all of this to the litigant in his castle in the first flush of the case and having no understanding of the English Legal System or how it can chew him up and spit him out is not easy, particularly when he has an unshakable belief in his case (these days supported by a little selective research on the internet) and, more often than not, a degree of antipathy towards the other party.

But this is the time when the litigant in his castle needs to be firmly directed towards mediation. If there is ever an area of dispute resolution where that direction should be mandatory it is this. Absent that, persuading parties to these kinds of property disputes to mediation at an early stage is a must. If nothing else, it can represent another independent perspective that can encourage the parties to look at the case from more enlightened and constructive perspectives and hopefully avoid the potential car crash ahead.

The wailing and gnashing of teeth on the part of commercial landlords faced with a flurry of CVAs by a variety of challenged retail outlets has generated little sympathy and no small degree of amusement. After years of ruling the roost over retailers with upward only rent reviews, pernicious repairing and other obligations and an intransigence to the problems facing their tenants, the boot may not be on the other foot just yet but it may well be heading that way.

True it is that many retail businesses face problems of their own making, such as over expansion, too much debt, abject stock control, online shopping and, in the case of some restaurant chains, selling overpriced average to sub-average grub. So to that extent, landlords can say that they are having to bear burdens not of their making.

None of that, however, can mask the huge changes in retail practices led by online shopping and the effect that it has had on the High Street and in retail malls and parks across the country and will continue to have. A few years ago the focus of the national press in stories about this was on the more economically challenged parts of the country. But increasingly, “Retail Blight” is affecting towns and cities in more affluent parts of the the country including leafy ’burbs around London and the Home Counties. Big names have gone to the wall and more look like following. Add a dash of Brexit uncertainty and there may yet come a time when a CVA as opposed to administration or liquidation is a blessed relief.

Commercial landlords large and small cannot afford to ignore what appear to be irreversible trends in shopping habits and the effect it is having on their tenants. Most people are familiar with the story about Kodak, who, faced with the digitial camera tsunami, stuck their hands in the sand and thought it would not affect them or old school photography. They were wrong and paid the price.

There is a real and present need for landlords and tenants to resolve difficult and seemingly intractable situations in a way that works for them both and provides workable and flexible solutions, either temporarily or in the long-term. And this is where mediation in general and www.mcrmediation.com in particular comes in, enabling parties to arrive at creative solutions outwith the legal straightjacket of commercial leases, insolvency remedies and other forms of litigation. Already, more far sighted landlords and tenants, large and small, are going down this road and more will surely follow.

As any fule kno’ as Nigel Molesworth might have put it, costs generally follow the event, subject always to the discretion of the Court. One factor that the Court can take into account in the exercise of its discretion is whether it was reasonable or unreasonable not to mediate. In other words, in deciding not to mediate, a party takes a risk that the outcome will justify that decision.

In Parker Lloyd Capital Ltd v Edwardian Group Ltd (Lawtel October 2017), a successful defendant’s refusal to enter into mediation, because it had believed that the claimant’s case was hopeless and that the claimant had proposed mediation as a tactic designed to extract a nuisance payment, was held not to have been unreasonable.

So no adjustment was made to the defendant’s costs. The decision in that case was overwhelmingly in the defendant’s favour so that the costs argument relating to not mediating was straightforward and easy to determine.

Quite often though, litigation is far more of a close run thing and decisions far more nuanced. In that context, a variety of factors can impact on the costs decision quite independently of the reasonableness of the decision to mediate – such as issues won or lost, conduct of parties, assessment of witnesses, evidence given, procedural failings along the way etc.

In the instant case, the only straw the unsuccessful claimant could clutch at to reduce the costs payable was the defendant’s failure to mediate per se. In other cases, the factors mentioned above that might cause the Court to reduce the costs payable are, paradoxically, the same factors that can determine whether the refusal to mediate was reasonable. So though it remains the case that you can reasonably conclude you have a very strong case and thus refuse to mediate and be held to have acted reasonably even if you lose some issues, that may not always be so.

Absent a compulsion across civil litigation to mediate, the aim of making an unreasonable refusal to mediate a factor in awarding costs was designed to encourage parties to mediate. It involves the Court in making a value judgment on the conduct of the parties which is often easy enough once the Court has decided the outcome and formed views on the parties and their conduct and various other factors. By then, it can all seem so obvious

But most litigation that is not readily disposable by way of summary judgment or striking out or determinative preliminary issue is seldom clear cut which is all the more reason for compelling parties to mediate. After all, it is a simplistic view of mediation to suppose that in a case where one side thinks he is on to a winner and that he is going to have his arm twisted to make a nuisance payment, that that is all it can achieve.

The party who thinks he is on to a winner also has the opportunity to marry the shortcomings, as he sees it, in his opponent’s case to offers surrounding the disposal of the case now at considerably less cost to his opponent (and himself). Furthermore, if you take account of the broader advantages of mediation such as diffusing personal animosity, maintaining and enhancing commercial and personal relationships, avoiding washing dirty laundry in public and arriving at creative solutions outwith the jurisdiction of the Court, the notion that is was reasonable not to mediate simply because you think you have a strong case and do not want to make a nuisance payment becomes rather flimsy. But until parties are required to mediate in civil litigation, this is what we will get and mediation will continue to struggle to have the impact it should have in modern litigation.

 

 

 

 

 

The recent decision of the Supreme Court in Barton v Wright Hassall & Co [2018] UKSC 12 has been widely misreported as a case that decides that there are no special rules for litigants in person (LiPs) when it comes to compliance with procedural rules.

In fact, it is nothing of the kind, involving, as it did, an interpretation CPR Part 6 r 15, allied to differing analyses of dicta of Lord Clark in Adela v Baadarani [2013] 1 WLR 2043. It was common ground that the power to retrospectively validate service was a matter of discretion which could only be overturned if there was an error in principal or a decision that was plainly wrong. So, the Appellant had little room for manoeuvre and as three of the Supremes were satisfied that the discretion had been properly exercised, that was that. Lord Briggs’ (supported by Lady Hale) well-reasoned minority analysis of why the Judge had erred in principle such that service should have been validated came to nothing.

For well-known reasons, the number of LiPs navigating their way through the reefs and shoals of the legal system has snowballed over the last 20 years. Similarly, the number of LiPs resorting to mediation has increased substantially and presents its own challenges.

A fellow mediator, recently reflecting upon an unsuccessful mediation, opined that things might have gone a lot more smoothly and successfully without lawyers present. To which I said, and say now, “Careful what you wish for”. Whilst litigants in person are to be welcomed to the mediation process as much as anyone else, experience shows that there are several important factors to bear in mind.

First and most obviously, the LiP does not have the benefit of professional advice, support and guidance. So, a Mediator may be the first person the LiP has come across to, as it were, run their case by. It is essential that the LiP understands, from the off, that the Mediator is not there to advise or evaluate the case and cannot do so.

Next, getting LiPs to produce a digestible Mediation Bundle can be problematic. So, once you are appraised of the dispute, it is often best to ask for what you as Mediator want and suggest that any additional documents are kept to the minimum.

Similarly, with maintaining impartiality and neutrality during the process. It is essential that the LiP understands that that is the Mediator’s stance throughout the process.

So too when an offer is made. It is only human nature for the LiP to say, “well what do you think?”. But whatever you do, do not tell the LiP what you think and avoid any suggestion that you are putting any pressure on the LiP one way or another. There are many ways of getting the LiP to think it out for him/herself.

Recording a settlement is another tricky area. It is not the function of a Mediator to draft a settlement agreement and getting involved in that process, however well intentioned, can be a dangerous minefield. The better practice is to get the LiPs to draft heads of agreement or a list of agreed terms or a memorandum of understanding and get them to sign it.

Keeping a detailed note of what transpires throughout is always best practice and never more so when LiPs are involved. If you are asked to take an offer to the other side, writing it out simply and clearly and having the LiP sign it is a wise move and the same applies to a counter-offer and a any responses.

LiPs can struggle with concepts of “without prejudice” and “confidentiality” which don’t necessarily impact upon the mediation, but it is worth emphasising these aspects of the process.

In summary, mediations involving LiPs on both sides or one side can be challenging and hard work and as Mediator, you need to be on your “A Game” to meet those challenges. There is something uniquely satisfying about a successful mediation in such a context. It is though you have rescued shipwrecked mariners from uncharted seas.

The Civil Justice Council ADR Working Group recently considered ways in which the use of mediation could be encouraged in civil disputes, but are we any nearer to extending mandated mediation beyond its current limited parameters?

Persuading parties to mediate is not working anything like as well is it should be, certainly in regard to cases of modest value which appear to be defined as cases worth between £25k and £150k, this despite the fact that the CPR have been in place for nearly 20 years and ADR was always at the heart of the CPR.

At the coal face, what often inhibits parties from mediating or achieving a mediated solution in modest value cases is the vexed issue of costs. Diligent hourly billing at substantial hourly rates has become the business model throughout the land. Gone are the days of charging according to what the case and client can stand. Thus, heavy costs are racked up and often prove the deal breaker to a mediated solution – in contrast to where costs are modest vis a vis what is in issue, where a mediated solution is easier to achieve.

The CJC suggest that a major problem is that ADR is “not familiar to public the and thus culturally normal”. What is ever “culturally normal” about litigation in the first place? Most people are fortunate to go through life without ever becoming involved in civil litigation. To those who do find themselves so embroiled, it is akin to arriving on a distant planet where the professionals speak a different language. Factor in all the emotional processes associated with a dispute, not to mention the inevitable antagonism, belief that you are right and they are wrong and that you are the wronged party and “it is the principle that matters” and there is nothing remotely “culturally normal” when your lawyer then suggests that after all it might be best to achieve some sort of mediated middle way.

Persuading the client to mediate can be far from easy. As a mediator, breaking down the barriers to a mediated solution and getting the parties to warm to and then embrace the process can be the most difficult part.

So, whilst mediation is part of the litigation culture from the perspective of the legal profession, it is unlikely that it will ever become culturally normal to the general public which means that if it is to take hold, an increased element of compulsion may be the only way.

The CJC identified three possible formats:
1. Engaging in ADR as a pre-condition of commencing proceedings.
2. A requirement that in certain types of cases at least, the parties engage in ADR at or by some specific point in the the course of the case.
3. A power to the court to require unwilling parties in a particular case to engage in ADR on an ad hoc basis in the course of case management

All very interesting but in the light of Lord Briggs’ CCSR Report and recent observations by the Court of Appeal in Gore v Naheed [2017] EWCA Civ 369, compulsion won’t happen anytime soon.

In this writer’s view, a power vested in the Court on an ad hoc discretionary basis, preferably earlier than later in the process, to order mediation where it sees fit would go a long way to solving some of the currently perceived failings.

Just before Christmas, Mr. Justice Nugee handed down an eagerly awaited judgment in the case of Holyoake & Or v Candy & Ors [2017] EWHC 3317 Ch.

Mr. Holyoake’s claims were all dismissed and the Candy Brothers won on every issue in the case. Game set and match you might suppose with Mr. Holyoake left to foot his opponents’ costs that exceed an eye-watering £11 Million, not far off the original loan of £12 million which morphed into a repayment of around £37 million to Christian Candy’s Guernsey concern, CPC Group Limited. Talk about sticking your head into the crocodile’s mouth!

A fellow mediator remarked to me that if there was ever a case that was incapable of being mediated this was it. He may have had a point.

Only the parties and their advisers will know if ADR was ever contemplated or took place. If I were a betting man, I would doubt it. The lengthy judgment reeks of forceful personalities and a high degree of animosity. Some very serious allegations were levelled against the Candy Brothers in terms of threats and intimidation, business practices and how they deal with people that cross them.

It is hard to imagine, given the factual background to the case, that the Candy Brothers ever contemplated anything apart a fight to the finish. Doubtless Mr. Holyoake regarded the claim as a worthwhile punt. He may even have hoped that the Candy Brothers might not fancy taking it all the way and would pay him off. Wishful thinking perhaps, and at the same time I expect his idea of a reasonable pay off would have been far in excess of what, if anything, the Candy Brothers might have been willing to pay.

It goes without saying that Mr. Holyoake did not emerge at all well from the Judgment. But although the Candy Brothers emerged as outright winners, the judge was far from believing of everything they said and some of the judge’s observations were quite damning of them and may afford food for thought in certain quarters.

So a more interesting question is whether in the light of all that, both sides now wish that they had arrived at a mediated solution which would have avoided washing dirty laundry in public, not to mention an assessment of it and them by the Court. I expect both sides would say that they would not have had it any other way. Well, they would wouldn’t they and maybe the successful Defendants are such big hitters that given the mores of this day and age, a few negative comments by a High Court Judge amount to water off a duck’s back and will count for nothing in their business dealings.

But there may come a day when either or both sides wished that they had adopted a more conciliatory course. Although the issues in the case were complex, the basic rational and dynamic for a mediated settlement from each side’s perspective were readily identifiable and settlement achievable. It is said that for a mediation to be successful, both sides are left with a greater or lesser degree of disappointment. And so it might have been.

Apparently, in the course of the trial, one of the Candy Brothers observed that even if they won hands down, there would remain a certain smell about them. How prescient. And that is why a mediated outcome would have been a wise course. How wise, only time will tell.

 

 

 

The Ministry of Justice will be smarting following the recent decision of Lady Justice Thirlwall, sitting as a Judge of the High Court, in Marsh v Ministry of Justice and government departments generally will have to review one of their favourite litigation party tricks of avoiding mediation on the grounds of supposed “Public policy”.

The case concerned a claim for psychiatric injury by a prison officer who had been suspended over allegations of sexual misconduct (subsequently found to be unproved) and failure to conduct an investigation properly. The claim began in 2012 with a letter of claim. In 2014, having made a Part 36 offer of £233,500 which was not even responded to, the Claimant offered mediation which the MoJ declined. In June 2016, the Court ordered that the parties should attempt to settle by ADR. In October 2016, the Claimant made a reduced Part 36 Offer of £180,000 and once again invited the MoJ to mediate. Once again, the MoJ did not respond to the Part 36 Offer and failed to engage in mediation.

The case went to trial and the Claimant was awarded damages of £286,000. In far too many ways, conduct of the case by the MoJ was an utter shambles, rightly and roundly criticised by the Court, and included informing the Court that the MoJ would be calling a witness who had died many months previously.

On the issue of costs, the MoJ submitted it acted reasonably in not mediating as this was not run of the mill litigation. Why was this not run of the mill litigation? Because, said the MoJ, it was a public body involved in a police investigation in a prison and, at the time, inquiries of abuse involving public institutions were matters of widespread public concern.

Nice try but no cigar.

The Court disagreed with the MoJ submission, observing that this was a personal injury claim by an employee against his employer, the sort of case readily resolvable through mediation. The purported greater public interest, and the Court appeared sceptical about whether it existed, was neither relevant nor effective to permit the MoJ to fail to take heed of court orders or disregard the need for proportionality. If the MoJ chose to hide behind public policy as a basis for not mediating, the costs consequences followed.

In an age when the machinery of government is increasingly at pains to play the public policy or public interest cards to justify its actions or inactions, at least in the mediation/litigation context, this is a step in the right direction.

It is now over 9 years since Mr. Justice Jack handed down his judgement in Earl of Malmesbury v Strutt & Parker [2008] EWHC 424 QB which addressed, amongst other things, the implications where a party agrees to mediate but then causes the mediation to fail by adopting an unreasonable position in the mediation. That, said the judge, amounted to an unreasonable refusal to mediate so as to engage the principles in Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576.

Malmesbury v Strutt & Parker remains a one off because, somewhat surprisingly from certain perspectives, the parties waived their right to privilege in all without prejudice matters including the mediation. In the ordinary course of events, the Court never gets to find out what happened behind the closed doors of mediation. The only issue is whether it has happened at all, and if not why not. Continue reading “Mediation – Time for Some Changes”