[2017] EWHC 464 (TCC)

This was a costs’ judgment, where judgment had been given in favour of Car Giant in the sum of £180k. However, LBH had made a Part 36 offer of £250k in April 2014. It was common ground that Car Giant should pay LBH’s costs from 7 May 2014 together with interest on those costs at 1% above base rate. However, it was also suggested that these costs should be paid on an indemnity basis. Defendants, unlike claimants, are not presumed to be entitled to indemnity costs from the date of expiry of the relevant period for their Part 36 offers. Instead, the court has a discretion to make an order for indemnity costs depending on the parties’ conduct.

Here, it was suggested that there had been an unreasonable delay in agreeing to mediate or take part in some form of ADR. The delay was from 15 May 2015 until October 2016. Deputy Judge Furst QC was clear that a court should be slow to conclude that the delay was unreasonable or such as to justify an order for indemnity costs.

The Judge did not consider that it could be said here that had mediation taken place in about May 2015 it would have been or was likely to have been successful. The delay in mediating could not be shown to have caused any increased costs. In this case, the Judge said that:

“The courts should be slow to criticise a party’s behaviour where decisions such as when to mediate are matters of tactical importance where different views may legitimately be held”.

Car Giant had taken the view that mediation was more likely to succeed when the experts’ views had been fully set out. That, on the evidence before the court, was a perfectly acceptable point of view. Here, LBH had indicated in April 2014 that it would not provide its valuation evidence, even on a without prejudice basis, and that it was without a valuer between about August 2015 and July 2016 which might have made discussions possible.

Whilst there was some delay on the part of Car Giant’s solicitors in responding to letters on this topic, that delay was not so great that it justified an order of indemnity costs.