[2002] EWHC 2401 (Ch)

Ch.D (Park J) 14/11/2002

CIVIL PROCEDURE - CPR

COSTS : SUCCESSFUL PARTY : PARTICIPATION IN MEDIATION : UNSUCCESSFUL PARTY'S MOTIVES : PRESSURE TO SETTLE : EFFECT ON COSTS : INDEMNITY BASIS : STANDARD BASIS : CIVIL PROCEDURE RULES 1998 SI 1998/3132 : CPR PART 36 : PART 36 OFFERS : OFFER REFUSED BY CLAIMANT : CONDUCT : INTERIM PAYMENTS : PERMISSION TO APPEAL

A successful party should not be deprived of part of its costs because it reasonably declined to participate in mediations before trial.

Hearing on costs and permission to appeal following the main judgment in CPR Part 20> proceedings reported at Societe Internationale de Telecommunications Aeronautiques sc v Wyatt Co (UK) Ltd & Ors (2002) LTL 10/10/2002 in which the claim against the Part 20 defendant ('MB') failed entirely. The issues that arose were: (i) whether MB should be deprived of any part of its costs because it declined to participate in mediations before trial; (ii) whether the costs payable by the Part 20 claimant ('WW') should be on the standard or indemnity basis; (iii) the level of an interim payment on account of costs; and (iv) whether WW should have permission to appeal from the decision in the main judgment.

HELD: (1) On the facts, it was entirely reasonable for MB to decline to participate in the mediations. As well as being at short notice, WW's motive for wanting MB's participation was so that pressure could be brought on it to make a large contribution to the settlement achieved in the main action. Further, WW was not interested in compromising the dispute between itself and MB. The case could be distinguished on the facts fromDunnett v Railtrack (2002) 2 All ER 850 and Hurst v Leeming (2002) CILL 1892. (2) A defendant would not be awarded indemnity costs merely because the claimant refused the defendant's Costs would be on the standard basis. (3) MB's suggested interim payment of £650,000 on account of costs was measured and reasonable. (4) Permission to appeal would not be granted because: (a) the judge considered that it had no real prospect of success because the issues had come down decisively in favour of MB; (b) the Court of Appeal should be allowed to decide for itself whether it wished to grant permission to appeal as the case involved a large amount of documentation and would involve a lengthy hearing.

Judgment accordingly.

Christopher Moger QC and Simon Salzedo instructed by Simmons & Simmons for the Part 20 Claimants. Justin Fenwick QC and Thomas Lowe instructed by Barlow Lyde & Gilbert for the Part 20 Defendants.