Hurst v Leeming (2002)

© Daniel Atkinson 2002      12 October 2002        

In Hurst v Leeming (2002) Mr Hurst sued Mr Leeming for negligence. Mr Hurst, a solicitor, had failed in his claims against his former partners in a firm. He had failed at first instance, at Court of Appeal and in the House of Lords. Orders for costs were made against him. The failure in those proceedings led to his bankruptcy. Mr Hurst’s solicitors had instructed Mr Leeming QC. Mr Justice Lightman and Mr Hurst during Mr Hurst’s opening both concluded that the action had no merit and must be dismissed. That left the issue of the costs of the action.

Mr. Leeming would normally be entitled to his costs. However, Mr Hurst argued that no such order should be made because before and after the commencement of proceedings Mr Hurst invited Mr Leeming to proceed to mediation, but Mr Leeming refused.

Mr Leeming had given a series of reasons for refusing to proceed to mediation:

1. the legal costs already incurred in meeting the allegations and the threat of proceedings;
2. the seriousness of the allegations of professional negligence;
3. the total lack of substance of the claims made;
4. the lack of any real prospect of a successful outcome to the mediation proceedings, having regard, in particular, to the plain object of Mr. Hurst in proposing mediation of obtaining a substantial financial payment from Mr. Leeming when in fact there was no merit in the claim;
5. the character of Mr. Hurst as revealed by the actions he commenced and his response to the explanation of Mr. Leeming's conduct already provided.

On the last point Mr Leeming stated that the character was of a man obsessed with the notion that an injustice had been perpetrated on him, who would not be able or willing to adopt in the course of a mediation the attitude required if a mediation was to have any prospect of success.

Mr Justice Lightman observed that the professional negligence pre-action protocol laid down that in proceedings for professional negligence, if one party offered to proceed to mediation, the other party, if he refused, should state his reasons. He held that implicit in that protocol, and explicit in two decisions of the Court of Appeal, Cowl v Plvmouth City Council and Dunnett v Railtrack, is the proposition that a party who refuses to proceed to mediation without good and sufficient reasons may be penalised for that refusal and, most particularly, in respect of costs. He held that mediation is not in law compulsory, and the protocol spelt that out loud and clear. But alternative dispute resolution was at the heart of today's civil justice system, and any unjustified failure to give proper attention to the opportunities afforded by mediation, and in particular in any case where mediation affords a realistic prospect of resolution of dispute, there must be anticipated as a real possibility that adverse consequences may be attracted."

Mr Justice Lightman examined the reasons given by Mr Leeming and whether they justified the refusal to proceed to mediation:

1. On the first ground he decided that the fact that heavy costs had already been incurred was not any form of justification. This was merely a factor to be taken into account in the mediation process.
2. On the second ground it was not sufficient that there was an allegation of professional negligence. Practically all allegations of negligence against a professional man or body were serious, but that was no reason why an attempt should not be made at mediation. The reflection on the professional competence of a party may need to be reflected in the course of the negotiations and in any settlement, but could not of itself take any ordinary case outside the purview of mediation.
3. On the third ground, the fact that a party believed that he had a watertight case again was no justification for refusing mediation. That was the frame of mind of so many litigants. Nor was it necessarily sufficient of itself that a full and detailed refutation of the opposite party's case had already been supplied, though this may well be a very relevant consideration.

Mr Justice Lightman held that the critical factor in this case was whether, objectively viewed, a mediation had any real prospect of success. If mediation can have no real prospect of success a party may, with impunity, refuse to proceed to mediation on this ground. But refusal is a high risk course to take, for if the court find that there was a real prospect, the party refusing to proceed to mediation may be severely penalised. Further, the hurdle in the way of a party refusing to proceed to mediation on this ground is high, for in making this objective assessment of the prospects of mediation, the starting point must be the fact that the mediation process itself can and does often bring about a more sensible and more conciliatory attitude on the part of the parties than might otherwise be expected to prevail before the mediation, and may produce a recognition of the strengths and weaknesses by each party of his own case and of that of his opponent, and a willingness to accept the give and take essential to a successful mediation. What appears to be incapable of mediation before the mediation process begins often proves capable of satisfactory resolution later.

Mr Justice Lightman held that, quite exceptionally, Mr. Leeming was justified in taking the view that mediation was not appropriate because it had no realistic prospect of success. On the material before the court (as on the material before him Mr. Leeming) it was plain that Mr. Hurst has been so seriously disturbed by the tragic course of events resulting from the dissolution of the partnership. His judgment in respect of matters concerning the partnership and partnership action, and the conduct of that action on his behalf was seriously disturbed. He was a person obsessed with the injustice which he considered had been perpetrated on him and was incapable of a balanced evaluation of the facts. Accordingly Mr Leeming reasonably and fairly took the perfectly justifiable view on the facts that, by reason of the character and attitude of Mr Hurst, mediation had no real prospect of getting anywhere.

Mr Justice Lightman emphasised the exceptional nature of the case and then awarded costs in favour of Mr Leeming.