Some 20 years ago, in April 1999, the Civil Procedure Rules came into force. These stated, for the first time, the Overriding Objective which was to “deal with cases justly and at proportionate cost”.
It is that second point that I wish to discuss today- that cases should be dealt with at proportionate cost. As solicitors we must act in a client’s best interests and it is surely never in their best interests for the costs of litigation to spiral out of control. So how do we, as lawyers in a post-Tulkinghorn era, ensure we comply with the Overriding Objective?
In any claim, costs increase quickly at the point of issuing proceedings, and continue to increase quickly with each hearing, with the largest costs being incurred in the lead up to, and at, a final hearing. Solicitors usually charge on an hourly rate basis, and our time is consumed in the lead up to hearings in preparing court documents, and then by representing you at the hearings, when it is also possible that a barrister will need to represent you.
Whilst, if you win, it might be ordered that your opponent will pay your costs, in fact it is likely they will only have to pay a proportion of them and you will be responsible for the rest.
Additionally, and very importantly, however strong your case is, you might not win. Judges are human, and as such can’t always be predictable.
For these reasons, the main way in which your solicitor should be keeping costs proportionate is by engaging in Alternative Dispute Resolution (ADR). ADR is anything that resolves the dispute without going to court. This usually includes negotiating, perhaps by letter, but often a more effective and efficient form of ADR is mediation.
Mediation is where the parties sit in separate rooms at one venue, and an independent mediator acts as a go-between, going from room to room throughout the day, helping the parties to resolve their differences and reach a compromise. You might not feel like you have “won”, but an effective mediator will make you feel that you have aired the points that concerned you, and you will be able to walk away with a deal that you feel is acceptable, with no ongoing legal costs or uncertainty.
Mediation agreements are more flexible than court orders too. For example, recently I dealt with a mediation where, as part of the agreement, an executor agreed to pay my client back some money he had borrowed from her personally that had nothing to do with the claim. By having all parties under one roof and willing to reach a compromise, we were effectively able to resolve two disputes at once.
In order to comply with the Overriding Objective, courts are requiring parties to engage with ADR before, and throughout, litigation, and there are costs consequences for not taking part. In other words, if the court thinks you were unreasonable in not negotiating or mediating, and that has caused your opponent further legal costs in taking the matter forward, you may be ordered to pay those costs. In fact, it has been held that simply ignoring a request to mediate amounts to a refusal and may bring adverse costs consequences.
At Gotelee, as solicitors we are determined to offer practical, commercial advice at all times, and as mediators we are trained to efficiently resolve conflict and bring about workable solutions to disputes. We offer mediation for both individuals and for businesses for more information, contact [email protected].