England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CHANCERY DIVISION
(MR JUSTICE LIGHTMAN)

		Royal Courts of Justice Strand London WC2A 2LL Tuesday 23 July 2002

1. LORD JUSTICE KEENE: This is a renewed application for permission to appeal against a judgment and order of Lightman J, permission having been refused on the papers by Chadwick LJ. By his order, Lightman J gave summary judgment against the applicant, who was the claimant in these proceedings, and dismissed his claim. An application by the applicant for summary judgment in his favour was also dismissed.
2. Those parts of the order are marked "By Consent". The remaining part of the judge's order, namely that the applicant do pay the respondent's costs in the sum of £55,000, was not marked "By Consent". The appellant's notice filed with the Civil Appeals office challenges only the costs part of the order, but by a skeleton argument the applicant also seeks to challenge the substantive parts of the order.
3. I have heard oral argument on that aspect from Mr Hurst. It is said on that aspect that this was not truly a consent order but an order to which objection was not taken so that there was no contract here between the parties. It came into the second category of cases referred to by Lord Denning, MR in Siebe Gorman & Co Ltd v Pneupac Ltd [1982] 1 WLR 185 at 189. According to the applicant, Lightman J expressed the view that the applicant's case was hopeless. After discussing matters outside court with counsel for the respondent, Mr Hurst decided that he had no alternative but to withdraw his claim. He told the judge that he was withdrawing his claim. On this aspect, the judge said:

"When Mr Hurst opened his application, he and I had a frank exchange of views on the merits of the case, and this exchange led us both to conclude that the action had no merit and must be dismissed.... Mr Hurst is to be commended for his fair and sensible decision in this regard at the hearing. This decision, namely that the action had to be dismissed, left outstanding the single issue of the costs of the action."

4. It has to been be borne in mind that Mr Hurst, although appearing then, as now, in person, is a very experienced solicitor who has been in practice since 1975, specialising, he tells me, in litigation. Clearly, he cannot be regarded as a conventional litigant in person who is innocent of legal issues or of the ways of the court.
5. Assuming for present purposes, as I do, that the Court of Appeal has the power to allow Mr Hurst to resile from his withdrawal of his claim, it would clearly require some very good reason to be established before such a course could be permitted. Fraud, mistake or misrepresentation are the traditional grounds on which a consent order may be set aside. Those are not matters which are alleged here.
6. I turn to the principal basis relied on in respect of the proposed appeal. It is contended by Mr Hurst that Lightman J should have recused himself. It is said that the judge was not an impartial tribunal and was, therefore, disqualified. There are two matters relied on in this respect. First, Mr Hurst says that he himself had known the judge for about 30 years, having frequently instructed him when the judge was at the Bar. Since then he has met him on some social occasions. Secondly, it seems that when the hearing began, leading counsel for the other side reminded the judge that some 12 years previously the judge had supported the respondent, who is also a member of the Bar for membership of the Athenaeum Club. Mr Hurst has informed me that the judge had not proposed or seconded the respondent for that membership but probably had been one of the supporters. The judge said he would not expect either party to object to him hearing the case. According to a letter produced by the applicant from the other side's solicitors, Mr Hurst told the judge that he did not have any objection. Mr Hurst submits that, so far as he can remember, he did not say anything, but nonetheless the judge had made it clear that he would not entertain any objection and Mr Hurst concluded that it was inappropriate for him to do so.
7. I find that argument unpersuasive. The judge's comment does not seem to me to indicate that he would not entertain any objection, but merely that he would not expect that the parties would object. Any experienced lawyer like the applicant knows full well that he can object despite such a comment. I observe that Mr Hurst has this morning addressed me with confidence and great fluency, yet he did not object to the judge hearing the matter at the time. That is important and it is also, in my view, hardly surprising. The previous contacts, first, between the applicant and the judge, when the latter was at the Bar and since then, would scarcely suggest any bias against Mr Hurst. The other side did not object on that ground. Mr Hurst has said that he and the judge had had a cordial relationship. I gather that it was a professional relationship rather than one of friendship. The support given 12 years earlier to the respondent for membership of a club, as, no doubt, a fellow member of the Bar, would not be seen by any fair minded and informed observer as giving rise to a real possibility of bias. That is the current test in domestic law and it accords with the Strasbourg jurisprudence also on the matter of an impartial tribunal (see, in particular, the recent House of Lords decision in Porter v Magill [2000] 2 WLR 1420). The fact that Mr Hurst himself did not object on this ground seems to me to be an indication that this is so.
8. Mr Leeming was a member of the Chancery Bar and had taken silk. He was likely to be known to all, or most, of the judges in the Chancery Division where this matter was listed. A willingness on the judge's part to support Mr Leeming's membership of a club so many years earlier does not significantly alter the situation. I therefore cannot see such providing a basis for a fair minded and informed observer concluding that there was a real possibility that the judge in this situation would not be true to his judicial oath. In those circumstances there is no arguable basis for overturning those parts of the order below which were made by consent.
9. I turn to the remaining matters raised by Mr Hurst, all of which concern the order as to costs. The background to the proceedings are dealt with in detail by the judge in his judgment. They arose out of the dissolution of a solicitors' partnership. Mr Hurst, who had been one of the partners, then sued the other 19 former partners claiming various forms of relief. The trial began on 7 March 1995 with the applicant acting in person before Carnwath J. However, on the evening of 8 March 1995, the respondent, Mr Leeming QC, was instructed on the applicant's behalf. He represented Mr Hurst from the next day until the trial finished on 23 March.
10. Carnwath J rejected the applicant's main contention that he was discharged from all further obligations under the partnership deed. That decision was upheld in the Court of Appeal and in the House of Lords. Consequently, Mr Hurst faced a substantial liability which, when combined with the orders for costs against him, led to his bankruptcy. He attributed this outcome to failings on the part of his legal advisers and representatives. He therefore sued them. He first brought proceedings against his solicitors. Those were struck out in January 1998 and permission to appeal was refused by the Court of Appeal. He then began a second set of proceedings against the same solicitors later that year but those, too, were struck out as an abuse of process.
11. Following the House of Lords decision in Hall v Simons [2000] 3 WLR 543, Mr Hurst began this action against his former counsel, Mr Leeming, which was dismissed by consent in the circumstances to which I have referred. The applicant's case on costs at first instance was that there should not be any order against him because both before and after the start of proceedings he had suggested mediation but the respondent had refused. It is indeed entirely correct that Mr Hurst repeatedly suggested mediation and also that the respondent's solicitors rejected that suggestion. Their reasons, as given at the time, are usefully encapsulated in a letter of 19 March 2002 which, in part, stated:

"You know our client's case, which is fully set out in our client's Defence and the witness statement served in support of our client's Summary Judgment application. If these documents have not persuaded you that your claim is without any merit whatsoever then, we doubt very much whether anything that a mediator could say would cause you to change your mind and abandon this action."

12. Mr Hurst relies on the terms of the professional negligence pre-action protocol which contains a reference to alternative dispute resolution at paragraph B6.3. It deals with how a party should respond to a proposal that ADR should be used. It states that, if a such party does not accept that any form of ADR is appropriate, it should state its reasons. It is clear that such a response may be relevant to the issue of costs. I say that not merely because of the wording of paragraph B6.3, but also because the conduct of the parties is one of the matters to which the court must have regard under CPR 44.3(4). As Lightman J said in his judgment, the decisions of this court in Frank Cowl v Plymouth City Council [2001] EWCA Civ 1935 and [2001] All ER 206 and Dunnett v Railtrack Plc [2002] EWCA Civ 302 indicate that a party who refuses to proceed to mediation without good reason may be penalised in costs, although he rightly added that mediation is not compulsory. I agree entirely with Mr Hurst and the judge below as to that approach.
13. A number of arguments were advanced on behalf of the respondent before Lightman J to justify the refusal to try mediation. Most were rejected by the judge. The judge saw as critical the question whether mediation had any prospect of success. That reflected the reason put forward at the time in correspondence in March 2002. The judge recognised that mediation may sometimes bring about a more conciliatory attitude on the part of the parties than may have been expected and that the frank exchanges of views he himself had had with the applicant had achieved a shift in Mr Hurst's position. But the judge was persuaded that Mr Leeming was justified in his view that mediation in this case had no realistic prospect of success because it was plain on the documents before the court that Mr Hurst had become obsessed with injustice he felt he had suffered and was incapable of a balanced evaluation of the facts.
14. Lightman J spelt out a number of detailed reasons for reaching that conclusion. He summarised it towards the end of his judgment in this way:

"In short, as it seems to me, Mr Leeming reasonably and fairly took the justifiable view on the facts that, by reason of the character and attitude of Mr Hurst, mediation had no real prospect of getting anywhere."

15. The judge recognised that that was a view which would not normally be easily sustainable but said on the facts of this case that it was sustainable.
16. The applicant now challenges that conclusion. He says that the character of a litigant is not a relevant consideration in deciding whether it was reasonable for the other party to reject mediation and no reference to such a factor appears in the case of Dunnett. Moreover, Mr Hurst argues that, with a very difficult character, as he is apparently regarded, there may be all the more reason to have mediation which may bring about some change in position.
17. For my part, it seems clear that the case of Dunnett was not seeking to set out a comprehensive list of relevant factors in such matters. The judge was entitled to take the view that a party could properly decline mediation if there was no realistic prospect of it succeeding. The past conduct of the other party may sometimes give a guide as to whether or not there is such a prospect. It seems to me that it was that past conduct which was being referred to by the judge, when he made that comment towards the end of his judgment about the character and attitude of Mr Hurst. The pre-action protocol is not intended to force to the negotiating table a party against whom a hopeless case has been brought and maintained despite clear evidence that it is indeed hopeless.
18. In the present case there was substantial evidence before the judge that that was the situation here. The claim was without real merit, as Mr Hurst eventually recognised. It depended, first, on establishing negligence on the part of the respondent in not putting a particular schedule before the original trial judge and, secondly, on proving that damage had been caused by that negligence. In other words, that an account would have been ordered by the court but for such negligence and that such an account would have resulted in an order for payment to Mr Hurst. As the House of Lords pointed out in Hurst v Bryk [2000] 1 AC 185 per Lord Millett at 192B-C, such an order for an account in the circumstances of this case would have been very unusual.
19. These formidable difficulties had been spelt out to the applicant by the respondent's solicitors, especially by way of a witness statement by Mr John Bennett, a solicitor, dated 3 January 2002. That witness statement, clearly and in immense detail covering some 46 pages, vividly indicated why the claim had no chance of success. Yet, even in the face of that response, the applicant persisted in the claim. The respondent was entitled to take that into account along with the applicant's resort to litigation against his former solicitors, not once but twice, even after the first claim had been struck out. The applicant was also pursuing a claim for summary judgment against the respondent which patently was bound to fail for the reasons which I have indicated.
20. When I consider all those matters, it seems to me that those circumstances indicate that Lightman J's conclusion here was justified on the evidence. It may be unusual to reach such a conclusion that the other party is entitled to reject mediation because of the lack of any prospect of mediation succeeding, but in this case it seems to me that such conclusion was fully borne out by the evidence which was available.
21. In those circumstances I conclude that this appeal has no real prospect of success. No appeal in this particular case is likely to succeed and this application must, therefore, be dismissed.
22. Nonetheless, I would like to pay tribute to the courteous and succinct way in which Mr Hurst presented his arguments before me.
Order: Application for permission to appeal refused.