Nigel Witham Ltd v Smith & Anr

This was a costs decision of HHJ Coulson QC following the principal judgment where the net result was that NWL owed the defendants the sum of £1,683. Two of the issues which the Judge had to consider were who was the successful party and the impact, if any, of the defendants' refusal to mediate until late in the litigation process. There was no doubt that the defendants were the successful party. The test adopted by the Judge was that set out by the Court of Appeal in Burchell v Bullard: 

"how...does one decide who the other successful party is? This was, after all, a form of commercial litigation where the other side was claiming money from the other. Costs following the event is the general rule and in this kind of litigation the event is determined by establishing who writes the cheque at the end of the case. Here the defendants do. They were the unsuccessful parties and my starting point is that the claimant is entitled to the costs of the proceedings...taken together."

Here, not only did the claimant have to write out a cheque to the defendants, the defendants were successful on an issue basis. This was save for, a major item of counterclaim which was abandoned in the closing submissions. The Judge reduced the defendants' costs by 15% to reflect this.

In relation to the failure to mediate point, the situation was that during the pre-litigation period, the defendants consistently said that they were prepared to consider mediation once the claimant had properly set out its claim. Indeed, this caused the defendants to criticise the claimant for failing to comply with the pre-action protocol. The Judge disagreed, saying this:

"It seems to me, that the pre-action period, both sides were pursuing their own methods of negotiation and preparation, and that the protocol was complied with in spirit, even if it was not followed to the letter."

The Judge accepted that trying to work out when the best time might be to attempt ADR was a common difficulty. He recognised that a premature mediation simply wastes time and can lead to a hardening of positions on both sides. Of course, the converse is that a delay in mediation can mean that the costs which have been incurred become the principal obstacle to success. The Judge thought that here, the critical moment, if it ever existed, was missed. There was an unsuccessful mediation, by way of a judicial settlement conference in October 2007, shortly before the trial. By then extensive costs had been incurred on both sides and attitudes had hardened. That said, the Judge was not persuaded that even if the defendants had agreed to an early mediation it would have led to a settlement. He noted that compromise or reconciliation did not feature prominently, if at all, in the claimant's correspondence. Thus, had there been an earlier mediation, the claimant's uncompromising attitude would have been meant that it would not have had a reasonable prospect of success. Finally, there was nothing to demonstrate that the defendants had unreasonably delayed the mediation