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Wigg & Co - Alternative Dispute Resolution

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Alternative Dispute Resolution and how far it is appropriate to go in using Costs Orders to penalise parties who have unreasonably refused to engage in mediation.

See "Hurst -v- Leeming (2003) 1 Lloyds Rep 379." See also "Frank Cowell -v- Plymouth City Council" and "Dunwich -v- Rail Track" and "Halsey -v- Milton Keynes General NHS Trust (2004) ALL ER 920." and "Watkins -v- Egglishaw 2 JLR1."

The latest in this line of cases, came before the Royal Court (Samedi Division) Jersey on 20th July 2005 before Sir Philip Bailhache Bailiff sitting alone in the case of "Bespoke Investments Limited -v- Lincoln Nominees Limited and others" involving an application by the Plaintiff for payment for interest and costs following a Judgement in their favour on 23rd February 2005 in the sum of 102,018.77. In this case, the Learned Bailiff decided that the Defendant should pay 85% of the Plaintiff's costs on the standard basis. The offer to mediate was made by the Defendant, some 10 weeks before trial. The dispute had been marked by acrimonious exchanges, but that was no reason for refusing mediation; indeed it may be a good reason for engaging in the process. The critical factors in this case, in the Bailiff's Judgement were that mediation was unlikely to bridge the gap between the principals of parties, given their personalities and the mutual antipathy; and the offer to mediate was made at a stage when most of the preparations for trial were complete. The saving in costs, even if the mediation had been successful, would not have been great. In the particular circumstances of this case, he did not therefore consider that it was unreasonable for the Plaintiff to refuse the Defendant's offer to engage in mediation. The award of 85% of costs took account of the Plaintiff's lack of the success in some respects and exaggerated claims were a disincentive to a negotiated settlement and were to be discouraged; an offer had been made to the Plaintiff prior to trial which had not been considered, the Defendant had withdrawn some of the claims shortly before the trial, reducing quantum and finally, an unsuccessful application had been made by the Plaintiff at the outset of the trial to add further claims to those set out in The Order of Justice.

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