Mediation in costs and case management

With civil court backlogs at all-time highs, solicitors old enough to remember the pre-Civil Procedure Rules era are looking back to what now seem to be slightly better times. When the CPR were brought in 25 years ago the hope was that by involving the court in ‘actively managing’ cases, courts could use their resources more efficiently and speed up litigation.

It is ironic that the process of CPR case management is now one reason why courts are backed up. They are engaging massive resources (clients’ and courts’) on a process which was meant to reduce, not increase use of those very same resources. Something has to give, and soon.

Mediation to resolve cases out of court is one aspect of trying to solve this – and this almost certainly will soon be mandatory. However, there is a lesser-known but important additional role for mediation which may come as a breath of fresh air to hard-pressed solicitors.

Memory lane

This is what happened before the CPR:

• a case would be listed for directions fairly soon and not in a matter of many months as happens now.
• directions for the case could usually be agreed or any disputes quickly ruled upon.
• outcomes were more predictable (have you had your disclosure budget slashed by a barrister budgeting judge or deputy with no professional experience of the work involved doing a significant disclosure exercise? It is a bugbear people have told me about since I retired from the bench).
• cost to the client of the exercise was vastly less than now, where even a straightforward costs and case management conference (CCMC) can approach the cost of some trials.
• it was much less stressful for all concerned.

Hadley v Przybylo approach: resolve costs and case management out of court

Before the better-known decision in Churchill v Merthyr Tydfil [2024] Costs LR 249 (holding that mediation can be mandated by the court, backed with sanctions), my judgment in Hadley v Przybylo [2023] EWHC 1392 (KB) (reversed but not on this point, at [2024] EWCA Civ 250) moved the field of mediation forward into a new area: matters arising in costs and case management. The court directed dispute resolution over a large costs budget. The result was a significant saving in terms of the areas of dispute.

Increasingly, courts are expecting evidence that parties have made proper efforts to resolve CCMC issues and not simply letters or calls followed by an expensive hearing with a team of lawyers.

A specialist mediation panel is inviting parties to mediate or to make use of binding evaluation in costs and case management.

The Costs Alternative Dispute Resolution group (CADR) recently announced that it is going to offer mediation and binding evaluation tailored to the costs and case management process, to help parties avoid expense and time, and reduce court backlogs. As a retired judge, I have ‘skin in the game’. After my recent retirement I joined CADR and, after listening to solicitor practitioners frustrated with the present ways of working, came up with the idea of expanding the Hadley v Przybylo precedent. CADR is a panel of former judges (including three former costs judges, some deputy costs judges and other deputies, and myself as both a former KB master and former deputy costs judge) and experienced barristers including KCs. It provides general costs-related mediation services, but this offering provides the potential for dealing with costs and case management issues before the expense and delay of full-blown hearings are incurred.

Here are the key features (but each case can be tailored to the circumstances).

• The parties book a mediation or binding evaluation appointment via CADR. Unlike the court office, you can actually speak to someone or email and get a prompt reply.
• As long as the parties provide dates of availability, a date is immediately set, which is likely to be much sooner than most courts can list.
• You have a free choice of the level of experience and background of the mediator, cutting your cloth to suit your purse but also choosing someone with relevant experience.
• You have the certainty that the cost of the mediation (which is payable in advance) is fixed: you will not face the problem of costs wasted from adjournments or situations where the judge wants you all to come back for more later.
• The parties can agree whether the cost of the mediation over the CCMC is to be treated as ‘costs in the case’ or some other arrangement. (The usual presumption would be ‘costs in the case’, but if a mediation is primarily or solely about budgeting you may prefer to treat the cost as part of the earmarked budgeting costs.)
• If the parties prefer the whole CCMC mediation to be confidential and without prejudice, it can be.
• You are much less likely to need a full ‘mob-handed’ team at the mediation. You could for example use a qualified costs lawyer with input from the managing solicitor on directions.
• You can have whatever time estimate you like (no more finding that a time-pressed court has given you an hour when you need three and will go part-heard, or a court which deals with directions and then sends you away to draft a budget and come back for yet another hearing).
• No more last-minute adjournments due to double bookings wasting costs.
• The mediator can deal (if necessary as a binding decision) with any areas of directions which you have not agreed and use their experience of civil litigation collaboratively to help to decide and craft a directions order which will work practically within any framework the parties have agreed in outline.
• Mediators are drawn from the experienced CADR panel, which includes retired judges and experienced KCs.
• When it comes to budgets, the parties can focus on any areas of dispute. Again, the mediator can rule in a binding manner if the parties want. For example, you could agree that an experienced former costs judge mediator (or deputy costs judge mediator) will make a ruling on hourly rates which is then recorded in a binding form, in a way a costs management judge (some say surprisingly) cannot.

The ideal time to deal with CCMC mediation is once the parties have served their statements of case and in the period well before any listed court date for a CCMC. If done promptly it will be possible for the parties to lodge their directions questionnaires on a consensual basis and enclose: (a) a proposed consent order for the CCMC; and (b) agreed budgets for the court to record.

Risks and benefits

A well-drafted and complete set of sensible directions, agreed by represented parties and assisted by a well-known mediator, achieves two key things:

• it shows that both sides have done what they ought to do to demonstrate that they are adhering to today’s firm expectation that they will always engage in dispute resolution (so criticism or penalties are less likely); and
• (in a world where courts are desperate to clear their lists) there is likely to be a high probability that the judge seeing the agreed package will sign it off on paper if asked, and with some relief that he or she has one less budgeting exercise to do and more time in their lists.

Under the CPR, of course, judges can always refuse to approve management orders, though, perhaps oddly, they are obliged merely to ‘record’ agreed budgets. Absent a change in the rules that will remain the case. CADR will be pressing for a change to the rules to enable out-of-court professionally mediated CCMC orders to have a special status.

However, we think it obvious that parties who present a united front as to the planning of the case will maximise their control over it, and limit the risk of harm and cost later of encountering a judge or a practitioner deputy who embarks upon what some may uncharitably call a frolic of their own.

Hidden benefit

There is also a hidden benefit of a CCMC mediation. Parties who are ‘in the room’ dealing with directions are always free to settle any contentious issues or even resolve the entire case. This is an ideal approach for solicitors when a client is reluctant to mediate on the substance of the case at first but will agree to resolve otherwise expensive case management matters. Getting people together at the door of the metaphorical ‘court’ dealing with a CCMC mediation right at the start promotes the most desirable outcome – the ending of a case with an acceptable result for all concerned.

Dr Victoria McCloud is a former master of the King’s Bench Division, a panel member at the CADR group and an associate member of Gatehouse Chambers, London