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(2) Costs
The costs of litigation have always been high and the risks as to costs in litigation have always been with us. But the costs of failure, and indeed the costs of success have never been so high.
The costs of litigation are today a world away from what they were only a few years ago. Today no one save the very rich or those few who can obtain public funding or union support can face litigation with any equanimity. Why have costs increased notwithstanding the fact that the overriding objective of the Civil Procedure Rules includes saving expense and dealing with cases in ways that are proportionate to the financial position of each party? I venture a few relevant considerations
1. The Woolf Reforms have not significantly reduced trial costs - indeed the pre-action protocols (when unsuccessful in their aim to prevent litigation) may have increased them;
2. The extinction of the traditional "Advice on Evidence" has brought in its train huge additional (and unnecessary costs). In the Advice On Evidence, counsel was required to have read all potentially relevant documents and to advise in writing in respect of each document whether or not it was of sufficient importance to require inclusion in the bundle before the court. This was an onerous task for counsel. For this reason no doubt this step in proceedings is now by-passed - and every document however peripheral or irrelevant is photocopied and bundled for the court - at immense costs for the litigants. Photocopying charges today in the solicitors profession are what the silk system is for the Bar - a licence to print money;
3. Witness statements have become Proustian novels - hundreds of pages making no distinction between what is relevant, marginal and irrelevant, taking hours of reading, leaving the judge bemused as he seeks to discover the wood from the trees, and extending unnecessarily the cross-examination of witnesses and the length of trials. Counsel's and solicitor's fees in civil cases of any substance in the High Court have increased to levels earlier generations would have regarded as beyond their wildest dreams.
4. Cases tend to be more complicated (I venture to suggest unnecessarily complicated). Instead of parties concentrating on their best points, every available point tends to be taken. By way of defence it is sometimes suggested that this is a precautionary measure by the legal representatives to avoid a subsequent complaint of negligence by their client if he loses. This argument ignores the paramount duty to the court in particular to give effect to the overriding objective of the CPR.
Costs are critically relevant to any decision to fight litigation. They are obviously relevant in so far as a party is exposed to liability to pay his opponents costs if he loses. But they are also critically relevant even if the party succeeds, for there is no certainty what proportion of his costs he will recover even if he wins and obtains an order for costs in his favour. Few areas are as obscure as reasoning of those who decide costs. I know, for I frequently have to decide costs. This exercise is both supremely easy and supremely difficult. It is easy because you do not have to give reasons. It is difficult because the criteria and discretion are so broad. It is inevitably broad-brush. Remember that a shortfall on the recovery of costs can cancel out or dilute the rewards of success and place a different complexion on the outcome of litigation.
(3) SUMMARY
In a word litigation is a high risk gamble - and the risks and burden of costs today are so substantial that for any well advised client litigation must be the course of last resort if any reasonable alternative is available. I should add that litigation today is not even an option for a large proportion of the population by reason of the withdrawal of legal aid.
(4) ALTERNATIVE DISPUTE RESOLUTION
Alternatives are available. One alternative is resolution by an arbitrator rather than by the court. I shall say no more on that alternative save that it achieves no greater certainty of outcome and may well achieve no saving of time or cost. As regards cost, you have to pay for the arbitrator: you do have to pay for the judge. You get him for nothing: some say that the maxim is applicable: "You get what you pay for".
The alternative of choice today is mediation. The law today increasingly recognises the value and importance of mediation as a social necessity. It applies the carrot and stick approach. As a carrot (reversing earlier authority) holding that such agreements were void for uncertainty, the courts will now enforce agreements by parties to proceed to mediation or otherwise try to settle their disputes. Going beyond this the court will ordinarily accede to a party's request for an adjournment or stay to permit the mediation process to be brought into play. As a stick the court will penalise parties who fail or refuse to give mediation a chance.
I attempted to formulate the relevant principles in Hurst v Leeming [2003] 1 Lloyds Rep 379. In a word the parties are duty bound to give mediation a chance if it has (objectively viewed) a real chance of success unless there are compelling reasons to the contrary, and it is incumbent on the party who give it a chance so to justify his stance. Hurst v Leeming affords an example of a case where the defendant could show that the claimant had no merits and was so obsessed with the justice of his claim that he would never accept less than his full claim: in those circumstances mediation would be pointless. An example of compelling reason not to go to mediation would be that the case is a test action; that there are litigants awaiting the outcome in order to pursue claims in the USA; and that any concession in the course of an mediation in the United Kingdom might be interpreted by a jury in the United States as an admission of liability. It was for this that in the case brought in the early 1980s against Schereings in respect of its drug "Primodos", which the claimants alleged caused deformities in the unborn child, I recall acting for Schering we could not agree to pay one penny, the risk of any such gesture being misconstrued by a US jury was too great. Fortunately the claimants caved in weeks before trial.
Mediation may prove unsuccessful. The bloody mindedness of one of the parties may produce this result. Where this is so the costs of the mediation are thrown away and by reason of the without prejudice character of the mediation process (in the absence of some provision in the mediation agreement to the contrary) the courts cannot visit the consequences on the party to blame. But in my view and in my experience, however unfavourable the prospects may appear before and when the mediation process begins, the spirit of compromise and conciliation often develops and proves infectious and effective during the mediation process and satisfactory outcomes are reached. Increasingly central Government and local Government are recognising the value and placing a premium on mediation. It is becoming part of good administrative practice and it is also becoming party of the common legal culture even entering the curriculum of law schools.
5. CONCLUSION
My message today: is give mediation a chance. Give it a chance at the earliest opportunity before heavy legal costs are incurred, for the incidence of those costs can prove the greatest obstacle to its success. In litigation there is only one winner: and that is generally the lawyers and as well as the very real legal costs of the litigation there is the blight it occasions on the lives of the litigants over the protracted period until it reaches its final outcome.
The loss of a good night's sleep is a real price to pay for litigation, a price which practitioners and indeed the parties all too often forget or underplay when the decision to litigate is made. In the case of mediation everyone can be the winner, the costs can be small; a result may be achieved in a short passage of time; and personal relations may be salvaged. Mediation is not a universal panacea: it has its limitations and it is not always applicable. But where it is available in my view no sane or conscientious litigators or party will lightly reject it if he fairly weighs up the alternative namely litigation, and any adviser who does so invites a claim in negligence against him.
© The Honourable Mr Justice Lightman 2003
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