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Weekly Law Reports (ICLR)/2004/Volume 1/Halsey v Milton Keynes General NHS Trust ; Steel v Joy and another - [2004] 1 WLR 3002
[2004] 1 WLR 3002
Halsey v Milton Keynes General NHS Trust ; Steel v Joy and another
Court of Appeal
[2004] EWCA Civ 576
2004 March 30, 31; May 11
Ward, Laws and Dyson LJJ
Costs Discretion of court Alternative dispute resolution Defendant refusing to contemplate alternative dispute resolution Whether successful defendant entitled to costs Whether court particularly disposed to making adverse costs order where successful litigant public body CPRrr 44.3(2)(4)(5)
Damages Contribution Successive independent tortfeasors Claimant sustaining personal injuries in two separate accidents with separate defendants Injury caused by second accident not significantly exacerbating claimant's condition after first accident Whether second defendant liable to make contribution to damages payable by first defendant
The claimant in the first case had her claim under the Fatal Accidents Act 1976 dismissed. The county court judge awarded costs to the defendant despite the fact that the defendant had refused invitations by the claimant to mediate.
The claimant in the second case brought separate actions for damages for personal injury following an accident on 15 December 1996 involving the first defendant and a further accident on 13 March 1999 involving the second defendant. The two actions were consolidated and both defendants admitted liability to the claimant. The first defendant instituted proceedings under CPRPt 20 against the second defendant, seeking a contribution in respect of any damages found payable to the claimant. The recorder dismissed that claim, having found that the second accident did not significantly affect the claimant's existing condition, and awarded the second defendant his costs despite the fact that the second defendant had refused to mediate.
On appeals by the claimant in the first case on the issue of costs and by the first defendant in the second case on the issues of both costs and liability
Held , (1) dismissing both appeals on costs, that to oblige truly unwilling parties to refer their disputes to
mediation would be to impose an unacceptable obstruction on their right of access to the court; that in deciding whether to deprive a successful party of some or all of his costs on the grounds that he refused to agree to alternative dispute resolution, it had to be borne in mind that such an order was an exception to the general rule under CPR r 44.3(2) and the burden was on the unsuccessful party to show why the general rule should be departed from; that such departure was not justified unless it was shown that the successful litigant acted unreasonably having regard to all the circumstances of the case; and that the alternative dispute resolution pledge announced by the Lord Chancellor in March 2001 was no more than an undertaking that alternative dispute resolution would be considered and used in all suitable cases, and there was no reason for the court to be particularly disposed to make an adverse costs order where the successful litigant was a public body; and that in neither case had the refusal to agree to mediation been unreasonable (post, paras 9 , 13 , 16 , 28 , 34 35 , 50 , 54 , 81 82 ).
Per curiam. Where a successful party refuses to agree to alternative dispute resolution despite the court's encouragement, that is a factor which the court will take into account when deciding whether his refusal was unreasonable. The stronger the [2004] 1 WLR 3002 at 3003 encouragement, the easier it will be for the unsuccessful party to discharge the burden of showing that the successful party's refusal was unreasonable (post, para 29 ).
(2) Dismissing the appeal of the first defendant in the second case on the issue of liability, that the damage caused by the second accident could be said neither to overlap, nor to be concurrent with, that caused by the first; that the claimant was therefore entitled to recover damages from the first defendant and the second defendant was not responsible for the consequences of the first injury even though, but for the first accident, the second accident would have caused similar injury (post, paras 59 , 60 , 70 ).
Performance Cars Ltd v Abraham [1962] 1 QB 33, CA followed.
Baker v Willoughby [1970] AC 467, HL(E) considered.
Rahman v Arearose Ltd [2001] QB 351, CA distinguished.
The following cases are referred to in the judgment of the court:
Baker v Willoughby [1970] AC 467; [1970] 2 WLR 50; [1969] 3 All ER 1528, HL(E)
Deweer v Belgium (1980) 2 EHRR 439
Dunnett v Railtrack plc (Practice Note) [2002] EWCA Civ 303; [2002] 1 WLR 2434; [2002] 2 All ER 850, CA
Fairchild v Glenhaven Funeral Services Ltd [2003] UKHL 22; [2003] 1 AC 32; [2002] 3 WLR 89; [2002] 3 All ER 305, HL(E)
Hurst v Leeming [2002] EWHC 1051 (Ch); [2003] 1 Lloyd's Rep 379
Shirayama Shokusan Co Ltd v Danovo Ltd [2003] EWHC 390 (Ch); [2004] 1 WLR 2985
Société Internationale de Télécommunications Aéronautiques SC v Wyatt [2002] EWHC 2401 (Ch)
Stransky v Bristol Rugby Ltd (unreported) 9 December 2002, Eady J
Valentine v Allen [2003] EWCA Civ 915, CA
Virani Ltd v Manuel Revert y Cia SA [2003] EWCA Civ 1651; [2004] 2 Lloyd's Rep 14, CA [2004] 1 WLR 3002 at 3004
Halsey v Milton Keynes General NHS Trust
APPEAL from Judge Charles Harris QC sitting at Oxford County Court
By a claim form dated 13 May 2002 the claimant, Lilian Halsey, claimed against the defendant, Milton Keynes General NHS Trust (the trust), damages pursuant to the Fatal Accidents Act 1976 arising out of the negligent treatment of her husband. On 17 June 2003 Judge Charles Harris QC dismissed the claim, awarding costs to the defendant despite the fact that the defendant had refused invitations by the claimant to mediate.
By an amended appellant's notice dated 28 August 2003 the claimant appealed on the ground that the judge: (1) erred in law in holding that the discretion to displace the general rule as to costs did not apply when there was a good defence and the defendant was vindicated by winning; (2) erred in law in failing to direct himself that (a) it was for the defendant to show that mediation had no real prospect of success, and (b) the burden so to do was a high one; (3) failed to find that if, which was denied, there was no real prospect of success fo mediation, it was because of the defendant's resistance thereto and the defendant's attitude to the claim, the defendant having fallen into precisely the misunderstandings about and the misconceptions of alternative dispute resolution identified by Brooke LJ in Dunnett v Railtrack plc (Practice Note) [2002] 1 WLR 2434; (4) erred on the facts in holding that the claimant would only have settled if there was a payment of money thereby failing to heed or act upon the offer she made to accept a contribution to the costs of the inquest; (5) failed to heed or to heed adequately that public money was involved in this case; (6) failed to heed or to heed adequately that the claimant alone had discharged the heavy obligation to resort to litigation at the last-by offering to limit the claim to a contribution to the costs of the inquest; and by offering to mediate at every relevant stage; (7) gave too much weight to insufficient factors like the belief that the defendants had a watertight case, and that involved failure to pay any or adequate heed to the fact that that only became the case when the pathologist who had supported the claimant's case at inquest changed her opinion during trial; (8) erred on the facts in finding that the references by the claimant to mediation were tactical thereby failing to pay any or sufficient heed to the claimant offering to mediate at every relevant stage; and (9) took into account the irrelevant fact of the claimant's solicitors having written to a government minister about the case.
The facts are stated in the judgment of the court.
Steel v Joy
APPEAL from Mr Recorder Thomas QC sitting at Newcastle-upon-Tyne County Court
The claimant brought separate actions against the two defendants, A Joy and Gary Halliday, for damages following an accident on 15 December 1996 involving the first defendant, and a further accident on 13 March 1999 involving the second defendant. The claims were subsequently consolidated. The first defendant instituted CPRPt 20 proceedings against the second defendant, seeking a contribution in respect of any damages found payable to the claimant. Both defendants admitted liability to the claimant. On 3 July 2003 Mr Recorder Thomas QC found in favour of the second defendant. [2004] 1 WLR 3002 at 3005
The first defendant appealed on the grounds that: (1) since there was an exact overlap of damage, the second accident damage could be said to have overtaken the first accident damage, so that the first defendant as only liable for the damage which was suffered during the period between the dates of the two accidents; and (2) the two defendants should have been regarded as concurrent tortfeasors who, as regards the acceleration of the relevant symptoms, both caused the same damage, and between whom there would be rights of contribution under section 1 of the Civil Liability (Contribution) Act 1978. The Civil Mediation Council and the Centre for Effective Dispute Resolution, although not parties, made written submissions.
The facts are stated in the judgment of the court.
Allan Gore QC for the claimant Halsey.
Christopher Purchas QC and Huw Lloyd for the trust.
Charles Foster for the defendant Joy.
General encouragement of the use of ADR
4 As was explained in Lord Woolf's final report Access to Justice (1996), for some time before the Civil Procedure Rules (CPR) came into [2004] 1 WLR 3002 at 3006 force, resort by parties involved in litigation to ADR had been encouraged by the courts in various ways. The CPR, practice directions and pre-action protocols have built on these early developments. It is unnecessary to make extensive reference to demonstrate this. CPRr 1.4(1) obliges the court to further the overriding objective of enabling the court to deal with cases justly by actively managing cases, and rule 1.4(2)(e) defines active case management as including encouraging the parties to use an alternative dispute resolution procedure if the court considers that appropriate and facilitating the use of such procedure. Rule 26.4(1) provides: a party may, when filing the completed allocation questionnaire, make a written request for the proceedings to be stayed while the parties try to settle the case by alternative dispute resolution or other means.
5 The term alternative dispute resolution is defined in the glossary to the CPR as a collective description of methods of resolving disputes otherwise than through the normal trial process. In practice, however, references to ADR are usually understood as being references to some form of mediation by a third party. The general rule is that the unsuccessful party is ordered to pay the costs of the successful party: CPR r 44.3(2)(a). The cases in which the question of displacing this rule have been discussed have usually been concerned with the refusal of mediation by the successful party. The two appeals before this court fall into this category. In what follows we shall concentrate on the cost consequences of a refusal by the successful party to agree to mediation.
6 There are those who believe that the virtues of mediation have not yet been sufficiently demonstrated. There is some reference to this by Professor Hazel Genn in her excellent report Court-based ADR Initiatives for Non-family Civil Disputes: the Commercial Court and the Court of Appeal (March 2002), pp 5867. But we are in no doubt that we should proceed on the basis that there are many disputes which are suitable for mediation. This approach is consistent with, and (as we have seen) underpinned by, the Woolf reforms. It is also consistent with the fact there are now a number of court-based mediation schemes for civil non-matrimonial cases, which operate with varying degrees of success. The virtues of mediation in suitable cases are also recognised in the Chancery Guide (paras 17.1 and 17.3), the Queen's Bench Guide (para 6.6), the Admiralty and Commercial Court Guide (para D8.8) and the Technology and Construction Court Guide (para 6.4). Judges in the Commercial Court routinely make ADR orders in the form set out in Appendix 7 to the Admiralty and Commercial Court Guide (see further para 30 below).
7 We are also mindful of the position which has been taken by government on this issue. Thus, in March 2001, the Lord Chancellor announced an ADR pledge by which all government departments and agencies made a number of commitments including that: Alternative dispute resolution will be considered and used in all suitable cases wherever the other party accepts it. In July 2002, the Department for Constitutional Affairs published a report as to the effectiveness of the government's commitment to the ADR pledge. The report stated that the pledge had been taken very seriously, and identified a number of initiatives that had been introduced as a direct result of it. These included the following initiative on the part of the National Health Service Litigation Authority (NHSLA): [2004] 1 WLR 3002 at 3007
The encouragement of greater use of mediation, and other forms of alternative dispute resolution, is one of the options considered by the NHSLA, who are responsible for handling clinical negligence claims against the NHS. The NHSLA is working with the Legal Services Commission to develop a joint strategy for promoting greater use of mediation as an alternative
to litigation in clinical negligence disputes. Since May 2000 the NHSLA has been requiring solicitors representing NHS bodies in such claims to offer mediation in appropriate cases, and to provide clear reasons to the authority if a case is considered inappropriate.
8 Strong support for the use of ADR in general, and mediation in particular, has been given by the courts in cases such as R (Cowl) v Plymouth City Council (Practice Note) [2002] 1 WLR 803, Dunnett v Railtrack plc (Practice Note) [2002] 1 WLR 2434 and Hurst v Leeming [2003] 1 Lloyd's Rep 379.
9 We heard argument on the question whether the court has power to order parties to submit their disputes to mediation against their will. It is one thing to encourage the parties to agree to mediation, even to encourage them in the strongest terms. It is another to order them to do so. It seems to us that to oblige truly unwilling parties to refer their disputes to mediation would be to impose an unacceptable obstruction on their right of access to the court. The court in Strasbourg has said in relation to article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms that the right of access to a court may be waived, for example by means of an arbitration agreement, but such waiver should be subjected to particularly careful review to ensure that the claimant is not subject to constraint: see Deweer v Belgium (1980) 2 EHRR 439, para 49. If that is the approach of the European Court of Human Rights to an agreement to arbitrate, it seems to us likely that compulsion of ADR would be regarded as an unacceptable constraint on the right of access to the court and, therefore, a violation of article 6. Even if (contrary to our view) the court does have jurisdiction to order unwilling parties to refer their disputes to mediation, we find it difficult to conceive of circumstances in which it would be appropriate to exercise it. We would adopt what the editors of Civil Procedure 2003 say at vol 1, para 1.4.11:
The hallmark of ADR procedures, and perhaps the key to their effectiveness in individual cases, is that they are processes voluntarily entered into by the parties in dispute with outcomes, if the parties so wish, which are non-binding. Consequently the court cannot direct that such methods be used but may merely encourage and facilitate.
10 If the court were to compel parties to enter into a mediation to which they objected, that would achieve nothing except to add to the costs to be borne by the parties, possibly postpone the time when the court determines the dispute and damage the perceived effectiveness of the ADR process. If a judge takes the view that the case is suitable for ADR, then he or she is not, of course, obliged to take at face value the expressed opposition of the parties. In such a case, the judge should explore the reasons for any resistance to ADR. But if the parties (or at least one of them) remain [2004] 1 WLR 3002 at 3008 intransigently opposed to ADR, then it would be wrong for the court to compel them to embrace it.
11 Parties sometimes need to be encouraged by the court to embark on an ADR. The need for such encouragement should diminish in time if the virtue of ADR in suitable cases is demonstrated even more convincingly than it has been thus far. The value and importance of ADR have been established within a remarkably short time. All members of the legal profession who conduct litigation should now routinely consider with their clients whether their disputes are suitable for ADR. But we reiterate that the court's role is to encourage, not to compel. The form of encouragement may be robust: see para 30 below.
has acted unreasonably in refusing ADR must be determined having regard to all the circumstances of the particular case. We accept the submission of the Law Society that factors which may be relevant to the question whether a party has unreasonably refused ADR will include (but are not limited to) the following: (a) the nature of the dispute; (b) the merits of the case; (c) the extent to which other settlement methods have been attempted; (d) whether the costs of the ADR would be disproportionately high; (e) whether any delay in setting up and attending the ADR would have been prejudicial; and (f) whether the ADR had a reasonable prospect of success. We shall consider these in turn. We wish to emphasise that in many cases no single factor will be decisive, and that these factors should not be regarded as an exhaustive check-list.
(a) The nature of the dispute
17 Even the most ardent supporters of ADR acknowledge that the subject-matter of some disputes renders them intrinsically unsuitable for ADR. The Commercial Court Working Party on ADR stated in 1999:
The Working Party believes that there are many cases within the range of Commercial Court work which do not lend themselves to ADR procedures. The most obvious kind is where the parties wish the court to determine issues of law or construction which may be essential to the future trading relations of the parties, as under an on-going long term contract, or where the issues are generally important for those participating in a particular trade or market. There may also be issues which involve allegations of fraud or other commercially disreputable conduct against an individual or group which most probably could not be successfully mediated.
Other examples falling within this category are cases where a party wants the court to resolve a point of law which arises from time to time, and it is considered that a binding precedent would be useful; or cases where injunctive or other relief is essential to protect the position of a party. But in our view, most cases are not by their very nature unsuitable for ADR. [2004] 1 WLR 3002 at 3010
(b) The merits of the case
18 The fact that a party reasonably believes that he has a strong case is relevant to the question whether he has acted reasonably in refusing ADR. If the position were otherwise, there would be considerable scope for a claimant to use the threat of costs sanctions to extract a settlement from the defendant even where the claim is without merit. Courts should be particularly astute to this danger. Large organisations, especially public bodies, are vulnerable to pressure from claimants who, having weak cases, invite mediation as a tactical ploy. They calculate that such a defendant may at least make a nuisance-value offer to buy off the cost of a mediation and the risk of being penalised in costs for refusing a mediation even if ultimately successful.
19 Some cases are clear-cut. A good example is where a party would have succeeded in an application for summary judgment pursuant to CPRr 24.2, but for some reason he did not make such an application. Other cases are more borderline. In truly borderline cases, the fact that a party refused to agree to ADR because he thought that he would win should be given little or no weight by the court when considering whether the refusal to agree to ADR was reasonable. Borderline cases are likely to be suitable for ADR unless there are significant countervailing factors which tip the scales the other way. In Hurst v Leeming [2003] 1 Lloyd's Rep 379, 381 Lightman J said: The fact that a party believes that he has a watertight case again is no justification for refusing mediation. That is the frame of mind of so many litigants. In our judgment, this statement should be qualified. The fact that a party unreasonably believes that his case is watertight is no justification for refusing mediation. But the fact that a party reasonably believes that he has a watertight case
may well be sufficient justification for a refusal to mediate.
(c) Other settlement methods have been attempted
20 The fact that settlement offers have already been made, but rejected, is a relevant factor. It may show that one party is making efforts to settle, and that the other party has unrealistic views of the merits of the case. But it is also right to point out that mediation often succeeds where previous attempts to settle have failed. Although the fact that settlement offers have already been made is potentially relevant to the question whether a refusal to mediate is unreasonable, on analysis it is in truth no more than an aspect of factor (f).
(d) The costs of mediation would be disproportionately high
21 This is a factor of particular importance where, on a realistic assessment, the sums at stake in the litigation are comparatively small. A mediation can sometimes be at least as expensive as a day in court. The parties will often have legal representation before the mediator, and the mediator's fees will usually be borne equally by the parties regardless of the outcome (although the costs of a mediation may be the subject of a costs order by the court after a trial). Since the prospects of a successful mediation cannot be predicted with confidence (see further para 27 below), the possibility of the ultimately successful party being required to incur the costs of an abortive mediation is a relevant factor that may be taken into account [2004] 1 WLR 3002 at 3011 in deciding whether the successful party acted unreasonably in refusing to agree to ADR.
(e) Delay
22 If mediation is suggested late in the day, acceptance of it may have the effect of delaying the trial of the action. This is a factor which it may be relevant to take into account in deciding whether a refusal to agree to ADR was unreasonable.
(f) Whether the mediation had a reasonable prospect of success
23 In Hurst v Leeming [2003] 1 Lloyd's Rep 379, Lightman J said that he considered that the critical factor in that case was whether objectively viewed a mediation had any real prospect of success. He continued, at p 381:
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 finds that there was a real prospect, the party refusing to proceed to mediation may, as I have said, be severely penalized. 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 surely be the fact that the mediation process itself can and often does 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.
unreasonable without regard to the impact of any encouragement that the court may have given in the particular case. Where a successful party refuses to agree to ADR despite the court's encouragement, that is a factor which the court will take into account when deciding whether his refusal was unreasonable. The court's encouragement may take different forms. The stronger the encouragement, the easier it will be for the unsuccessful party to discharge the burden of showing that the successful party's refusal was unreasonable.
30 An ADR order made in the Admiralty and Commercial Court in the form set out in Appendix 7 to the Guide is the strongest form of encouragement. It requires the parties to exchange lists of neutral individuals who are available to conduct ADR procedures, to endeavour in good faith to agree a neutral individual or panel and to take such serious steps as they may be advised to resolve their disputes by ADR procedures [2004] 1 WLR 3002 at 3013 before the neutral individual or panel so chosen. The order also provides that if the case is not settled, the parties shall inform the court what steps towards ADR have been taken and (without prejudice to matters of privilege) why such steps have failed. It is to be noted, however, that this form of order stops short of actually compelling the parties to undertake an ADR.
31 Nevertheless, a party who, despite such an order, simply refuses to embark on the ADR process at all would run the risk that for that reason alone his refusal to agree to ADR would be held to have been unreasonable, and that he should therefore be penalised in costs. It is to be assumed that the court would not make such an order unless it was of the opinion that the dispute was suitable for ADR.
32 A less strong form of encouragement is mentioned in the other court guides to which we have referred at para 6 above. A particularly valuable example is the standard form of order now widely used in clinical negligence cases, and which was devised by Master Ungley. The material parts of this order provide:
The parties shall consider whether the case is capable of resolution by ADR. If any party considers that the case is unsuitable for resolution by ADR, that party shall be prepared to justify that decision at the conclusion of the trial, should the trial judge consider that such means of resolution were appropriate, when he is considering the appropriate costs order to make. The party considering the case unsuitable for ADR shall, not less than 28 days before the commencement of the trial, file with the court a witness statement without prejudice save as to costs, giving the reasons upon which they rely for saying that the case was unsuitable.
33 This form of order has the merit that (a) it recognises the importance of encouraging the parties to consider whether the case is suitable for ADR, and (b) it is calculated to bring home to them that, if they refuse even to consider that question, they may be at risk on costs even if they are ultimately held by the court to be the successful party. We can see no reason why such an order should not also routinely be made at least in general personal injury litigation, and perhaps in other litigation too. A party who refuses even to consider whether a case is suitable for ADR is always at risk of an adverse finding at the costs stage of litigation, and particularly so where the court has made an order requiring the parties to consider ADR.
Public bodies
34 Another issue that has arisen is whether the court should be particularly disposed to make an adverse costs order against a successful public body on the grounds that it refused to agree to ADR. We can see no
basis for the court discriminating against successful public bodies when deciding whether a refusal to agree to ADR should result in a costs penalty. The only reason for doing so that was suggested to us in the course of argument was that government departments and agencies (including the NHSLA) should be held to the ADR pledge: see para 7 above. We need, therefore, to consider whether the ADR pledge has any special significance. In Royal Bank of Canada v Secretary of State for Defence [2003] EWHC 1841 (Ch) the main issue was the true interpretation of a lease. Lewison J said that, although it concerned a question of law, this dispute was [2004] 1 WLR 3002 at 3014 suitable for ADR. He considered that the ADR pledge given by government was something to which he ought to attach great weight. He said, at para 12:
As I have said, however, the most important feature to my mind is the formal pledge given on behalf of the government and its various departments to use ADR in appropriate cases. The government did not abide by that pledge in this case. I am not in a position to form any real view of whether a mediation would or would not have succeeded. It may well have done, but in my judgment a failure to abide by the formal pledge given on the part of government, coupled with the fact that justifies a decision that the defendant should not recover any further costs from the claimant.
35 In our judgment, the judge was wrong to attach such weight to the ADR pledge. The pledge was no more than an undertaking that ADR would be considered and used in all suitable cases. If a case is suitable for ADR, then it is likely that a party refusing to agree to it will be acting unreasonably, whether or not it is a public body to which the ADR pledge applies. If the case is not suitable for ADR, then a refusal to agree to ADR does not breach the pledge. It is, therefore, difficult to see in what circumstances it would be right to give great weight to the ADR pledge.
Halsey v Milton Keynes General NHS trust
The facts
36 This claim is brought by Lilian Halsey pursuant to the provisions of the Fatal Accidents Act 1976, as amended, in relation to the death of her husband, Bert Halsey, on 27 June 1999 at the Milton Keynes General Hospital. At the date of his death, the deceased was 83 years of age. The claim arose out of the allegedly negligent treatment of him while he was a patient at that hospital.
37 He was transferred to the hospital on 25 June 1999. At that time, he was suffering from several serious health problems. It was not in dispute that his life expectation was short. He was being fed by means of a nasogastric feeding tube. The basis of the claim was that his death was caused by the tube being incorrectly fitted, so that, rather than directing liquid food into the deceased's stomach, it was directing it into his left lung. Following his death, a post mortem examination was performed by Dr Mayers, a consultant histopathologist, employed by the defendant trust. She concluded that the cause of death was airway obstruction due to the introduction of nasogastric nutrition into the airway and lung as a result of the insertion of a nasogastric tube into the major airway.
38 An inquest was held into the deceased's death. For this purpose, the coroner requested statements from
pre-action protocol. The letter included an offer to accept the sum of £12,500 together with reasonable costs pursuant to CPRPt 36. This evoked a response on 1 May in which the trust said that it would be defending the claim. On 25 July 2001 the trust sent its protocol response denying liability, and asserting:
As there is no negligence, the trust will not be settling this claim. In view of this, I do not believe it is appropriate to meet with you and discuss this claim or refer this case to mediation as the trust's stance will not change in this respect. Therefore, any such meeting or mediation will be unnecessary waste of both costs and resources.
[2004] 1 WLR 3002 at 3016
44 On 5 November 2001, OMM wrote to the trust saying: We must make it clear to you at this stage that it was never our intention to issue proceedings since this was quite obviously a case that could have been resolved by mediation.
45 The claim form was issued on 13 May, and served on 9 September 2002. On 10 September 2002, OMM wrote:
Despite the fact that we have issued proceedings in this matter we are anxious to avoid unnecessary costs being incurred. We would therefore invite you to consider referring this case to mediation so that we can perhaps resolve it to the satisfaction of our client without unnecessary costs being incurred.
46 This request was repeated by OMM's letter of 13 September 2002. The trust replied on 16 September:
I have as yet been provided with no evidence that it would be an effective use of NHS resources to go to mediation on this small value claim, where liability is in dispute. What your costs are, are obviously a matter for you and your client, the trust costs on this claim, even to trial, will only be low.
47 On 3 April 2003, OMM wrote yet again urging the trust to consider either mediation or at least a meeting to discuss a possible settlement: We are certain agreement could be reached whereby further unnecessary costs would be avoided.
48 The trust replied on 4 April, repeating its position that on such a low quantum claim, we do not consider this to be a cost effective use of NHS resources. On 30 April 2003, OMM wrote again pointing out that they had made every attempt to try to avoid the costs of litigation, but all such attempts had been rejected out of hand. They referred to the decision of this court in Dunnett v Railtrack plc (Practice Note) [2002] 1 WLR 2434 and that of Lightman J in Hurst v Leeming [2003] 1 Lloyd's Rep 379, and said that they would be
relying on these decisions when the court came to consider the question of costs, since the trust had acted unreasonably. On 1 May 2003, the trust replied saying:
In respect of your request that we clarify why mediation is not a cost effective use of NHS resources on such a low cost claim , (a) it has little chance of success and (b) the costs of mediation would be as great, if not greater for such a low value claim than attending trial if you do not intend to consider a drop hands agreement, then I look forward to receiving your indexed trial bundle and summary in order that we may consider and amend/agree them.
49 The trial took place on 1 and 2 June 2003. The judge gave judgment on 17 June, and dismissed the claim. He then heard argument on the question of costs. It was submitted by Mr Meakin on behalf of the claimant that there should be no order as to costs, and in support of his submission he relied on the refusal of the trust to agree to a mediation. The judge was referred to some, if not all, of the correspondence to which we have referred. He said that he had the feeling that the letters written by OMM had been somewhat tactical. He also thought that it was unusual to commence [2004] 1 WLR 3002 at 3017 litigation by writing to the Secretary of State for Health as occurred in this case. He said, at para 32:
I think that the question for me to decide is was the defendant's attitude to ADR a reasonable one, or not a reasonable one or to use the words of Lightman J, were they justified in taking the view that mediation was not appropriate because it had no realistic prospect of success? Having considered and been taken through much of this correspondence, although, as I say, notably not the correspondence preceding the letter to the Health Secretary in 2000, it seems reasonably clear to me that although there are a number of tactical observations to the effect that the claimant would like ADR, it remains perfectly clear that this is not a case which they were disposed to compromise on any terms which could possibly be reasonable to the defendants. The defendants took the view, legitimately as I have found, that this was a case in which there simply was no negligence. It is significant that I have been told that on 4 March of this year, fairly shortly before trial, an offer was made by the defendant to the claimant that the matter should be settled on the basis that both parties simply walked away from the litigation and neither paid their costs, but that did not attract the advisers to the claimant or the claimant herself. She started off asking for £12,000, towards the end was offering to accept £7,500 and funeral expenses. It seems perfectly clear that it would only have been by the payment of some significant, albeit modest by the standards of this type of litigation, sum of money that the defendants would have been able to buy off the claim, whether by ADR or in any other way. I do not think that the CPR is designed to make parties which have a good defence settle claims which they do not wish to settle, when they ultimately end up winning and are vindicated in the view that they have taken, I do not think it proper, at least not in a run of the mill case, to say that they should then suffer by being denied their costs. This was a perfectly straightforward case of a kind which the defendants were justified in defending and justified in saying that they did not want to pay any money to the claimant in respect of. The claimant was only prepared to settle on the basis that she was going to be paid some money, and therefore there was not much point in talking to any greater extent than they did. It is to be observed that the correspondence from the defendant was both full and reasonable.
found payable to the claimant. Both defendants admitted liability to the claimant. The claimant and first defendant jointly instructed Mr M J Gibson FRCS, a consultant spinal surgeon. Mr Gibson advised that the claimant suffers from a congenital spinal stenosis, and that, as a result of the first accident, symptoms of the claimant's pre-existing stenosis were accelerated by seven to ten years. Of the second accident, Mr Gibson said:
He aggravated the pre-existing problems producing an exacerbation of these which would have lasted for in the order of three to six months. Thereafter persistence of symptoms primarily relates to his pre-existing problem that started after the injury on 15 December 1996.
[2004] 1 WLR 3002 at 3019
56 Mr Gibson was asked whether the second accident would have had a similar effect to the first accident had the claimant been free of symptoms immediately prior to the second accident. He replied by letter dated 25 June 2002 that on the balance of probabilities, this second accident would have exacerbated Mr Steel's condition by seven to ten years. Mr Recorder Thomas QC summarised the effect of the agreed medical evidence in these terms, at para 10:
So what it comes to, in very simple terms, is that as a result of the first accident, the claimant's already existing problems were accelerated by a period of years, in the order of seven to ten years. In the second accident, two and a quarter years later, Mr Gibson makes it clear that there was an exacerbation of three to six months by reason of the second accident, and we understand (and when I say we understand this is raised by me in argument with counsel today), we understand that really what he is meaning by the three to six months' aggravation from the second accident is that there was a flare-up of conditions for that limited period of time as a result of the second accident. He says in the report and the correspondence I have referred to that effectively, if the first accident had not happened, then the second accident would have had the same effect as the first accident if the first accident had not already occurred. However, save for the three to six months' aggravation, the second accident did not in fact affect the claimant's existing medical condition which had already been arrived at by then as a result of his pre-existing condition and the first accident.
57 The trial took place on 3 July 2003. It was agreed that the recorder should determine the causation issue that had been raised on the pleadings, namely whether the second defendant had caused the claimant to suffer any more damage than three to six months' aggravation of his symptoms of stenosis. On behalf of the first defendant, it was submitted that the second defendant had also caused or contributed to the seven to ten years' acceleration of the claimant's symptoms. The second defendant contested this. The recorder found in favour of the second defendant. He held, at para 19, that the second accident did not affect the long-term prognosis that there already was from the first accident, and derived support for his conclusion from the decision of this court in Performance Cars Ltd v Abraham [1962] 1 QB 33. The first defendant appeals against this decision.
58 Mr Foster's primary submission is that, since there was an exact overlap of damage, the second accident damage can be said to have overtaken the first accident damage, so that the first defendant is only liable for the damage which was suffered during the period between the dates of the two accidents. His
alternative submission is that the two defendants should be regarded as concurrent tortfeasors who, as regards the acceleration of the stenosis symptoms, both caused the same damage, and between whom there would be rights of contribution under section 1 of the Civil Liability (Contribution) Act 1978.
59 The first of these submissions is completely unsustainable. The phrase exact overlap of damage is not apt on the facts of this case. The damage attributable to the first accident (acceleration of symptoms by seven to ten years) had already occurred by the date of the second accident. That historical fact cannot be expunged simply because that same damage would [2004] 1 WLR 3002 at 3020 have been caused by the second accident if the first accident had not occurred. In these circumstances, it is a misuse of language to describe the acceleration of symptoms by seven to ten years as exactly overlapping damage, and plainly wrong to say that the second accident damage overtook and extinguished the first accident damage.
60 Nor can we accept the alternative submission. In our judgment, this case cannot be distinguished from Performance Cars [1962] 1 QB 33. Mr Foster implicitly accepts this, because he contends that Performance Cars was wrongly decided and should not be followed. In that case, the defendant negligently caused his car to collide with the plaintiff's car and damaged its front wing. It was agreed that to make good the damage, the whole of the lower part of the car would have to be resprayed at a cost of £75. The plaintiff had previously been involved in another collision in which his car had suffered damage to the rear wing which had not been made good. This damage also required a similar respray. The plaintiff had sued the person responsible for the first damage and recovered judgment for £75, the cost of the respray. That judgment had not been satisfied. This court held that the plaintiff was not entitled to recover the cost of the respray from the defendant, since he had damaged a car which was at the time of the accident in need of respraying, with the result that the need for respraying did not flow from the defendant's wrongdoing. Accordingly, the claim against the defendant failed. Lord Evershed MR said, at p 39, that the necessity for respraying was not the result of the defendant's wrongdoing because that necessity already existed. He said, at p 40:
In my judgment in the present case the defendant should be taken to have injured a motor-car that was already in certain respects (that is, in respect of the need for respraying) injured; with the result that to the extent of that need or injury the damage claimed did not flow from the defendant's wrongdoing. It may no doubt be unfortunate for the plaintiffs that the collisions took place in the order in which they did.
61 Donovan LJ said, at p 42:
The question, as I see it, is this: what extra burden in the matter of respraying was put upon the plaintiff company by the second collision? To my mind the answer must be: None, for the earlier collision had already imposed the burden of respraying upon them.
62 Mr Foster submits that the law has moved on since Performance Cars was decided and that the court is now required to apply what he calls equitable pragmatism in a case such as this. He says that justice requires the court to hold that the two defendants were concurrent tortfeasors who were both responsible for
