England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		16th April 2014

The Deputy Judge:

Introduction

1. In a judgment handed down on 31 January 2014 I dismissed the Claimant's claim against the Defendant. The parties are unable to agree a costs order. The Defendant seeks payment of its costs and the Claimant seeks an Order of "no order as to costs".
2. The facts and my reasons for dismissing the claim are set out in my judgment in R(Crawford) v The University of Newcastle Upon Tyne [2014] EWHC 162 (Admin). I only set out in this judgment the facts as necessary to decide the costs issue.

The Facts

3. Between October 2005 and June 2011, the Claimant was registered at the University of Newcastle Upon Tyne to study for a Bachelor of Medicine and Bachelor of Surgery ("MBBS") degree. The Claimant completed stages 1, 2, 3 and 4 of that degree but in June 2010 he failed his final year (Stage 5) examinations. The Claimant repeated his final year and in June 2011 retook the Stage 5 examinations.
4. On 15 June 2011, the Claimant was informed by the Defendant that he had again failed his final Stage 5 examinations. On 27 June 2011, the Claimant appealed that decision under the University's Academic Appeals Procedure for Students. At the heart of the Claimant's appeal was the contention that the Defendant had not calculated his grade in relation to the "Clinical and Communication Skills" domain in the part of the Stage 5 examination process known as the "Multi-Station Objective Structured Long Examination Record" (MOSLER) in accordance with the University's MBBS Stage 5 Handbook for 2010/2011 ("MBBS Stage 5 Handbook"). The Claimant's appeal was rejected by the University's Appeal Adjudicator on 1 August 2011. On 25 August 2011, the Claimant sought a review of that decision by the Academic Registrar and on 2 September 2011 the Academic Registrar rejected that review.
5. Whilst pursuing the internal appeals process, on 13 August 2011 the Claimant made a complaint to the Office of the Independent Adjudicator for Higher Education ("OIA") established under the Higher Education Act 2004. In that complaint, the Claimant maintained his contention that the University had failed to follow the MBBS Stage 5 Handbook in calculating his grade for the "Clinical and Communication Skills" domain in the MOSLER. In addition, the Claimant argued that the University had failed to follow its appeals procedure and had acted unfairly by not disclosing to the Claimant a memorandum provided by the Chair of the Examination Board to the Appeal Adjudicator before he had reached his decision. On 11 November 2011, the OIA issued a preliminary decision rejecting the complaint.
6. On 2 December 2011 the Claimant wrote to the OIA stating that he intended to bring judicial review proceedings against the Defendant. As a consequence, under the OIA's rules the Claimant's complaint was terminated when he issued these judicial review proceedings on 2 December 2011.
7. On 1 March 2012, the Claimant was refused permission to bring judicial review by a Deputy High Court Judge considering the papers. The Claimant renewed his application for permission and, on 24 May 2012 at an oral hearing, John Randall QC (sitting as a Deputy High Court Judge) granted the Claimant permission.
8. At that hearing, there was some discussion concerning whether the judicial review proceedings could be stayed in order for the Claimant to continue his complaint to the OIA. Thereafter, on 2 July 2012 the judicial review proceedings were stayed on the Claimant's application without opposition from the Defendant. On 20 July 2012, the Claimant wrote to the OIA inviting them, as a consequence, to reopen his complaint which the OIA thereafter did.
9. On 28 January 2013, the OIA issued a final decision that the Claimant's complaint was not justified. Thereafter, the stay on these proceedings was lifted and the substantive hearing of the claim took place before me on 10 December 2013. My judgment, dismissing the Claimant's claim which relied both upon public law principles and breach of contract, was handed down on 31 January 2014.

The Parties' Contentions

10. Both parties have made extensive and detailed written and oral submissions on the costs issue. I received written skeleton arguments and heard submissions from both Mr Anthony Speaight QC on behalf of the Claimant and Mr James Cornwell on behalf of the Defendant at a hearing on 27 February 2014 during the course of which Mr Speaight QC referred me to a supplementary bundle of authorities not referred to in his skeleton argument. Following the hearing, on 11 March 2014 Mr Speaight QC wrote to the Court indicating that one of the cases to which he had referred – PGF II SA v OMFS Company 1 Limited [2012] EWHC 83 (TCC) - had, in fact, been appealed to the Court of Appeal (see [2003] EWCA Civ 1288; [2014] BLR 1). At the request of both parties, I allowed counsel further time to make any written submissions they wished in relation to that decision. I received supplementary representations from both Mr Speaight QC and Mr Cornwell. As a result of the latter's submissions, which also dealt with a decision raised in the course of the oral hearing - namely R (Cowl and Others) v Plymouth City Council [2001] EWCA Civ 1935; [2002] 1 WLR 803 - Mr Speaight QC also provided a brief reply in relation to that decision. I am grateful to both Counsel for the assistance they have given me in deciding the issue of costs.
11. The Defendant argues that it was the successful party in these proceedings and is entitled to its costs in accordance with the general rule set out in CPR Part 44.2.
12. The Claimant argues that there are three reasons why the Court should depart from the general rule and make an order of 'no order as to costs'. First, the Defendant unreasonably failed to engage in alternative dispute resolution ("ADR"), in particular mediation when invited to do so by the Claimant. Secondly, it is said that the Defendant did not succeed on all the issues raised in the proceedings. Thirdly, the Defendant's own mistakes gave grounds for the claim in that the MBBS Stage 5 Handbook was unclear.
13. Both in the written submissions and in Counsel's oral submissions, the focus was upon the first basis upon which the Claimant sought an order of 'no order as to costs'.

CPR Part 44.2

14. In relation to costs CPR Part 44.2 is, so far as relevant, in the following terms:

"44.2 (1) The court has discretion as to –

(a) whether costs are payable by one party to another;

(b) the amount of those costs; and

(c) when they are to be paid.

(2) If the court decides to make an order about costs –

(a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but

(b) the court may make a different order.

…

(4) In deciding what order (if any) to make about costs, the court must have regard to all the circumstances, including –

(a) the conduct of all the parties;

(b) whether a party has succeeded on part of his case, even if he has not been wholly successful; and

(c) any payment into court or admissible offer to settle made by a party which is drawn to the court's attention, and which is not an offer to which costs consequences under Part 36 apply.

(5) The conduct of the parties includes –

(a) conduct before, as well as during, the proceedings, and in particular the extent to which the parties followed the Practice Direction (Pre-Action Conduct) or any relevant pre-action protocol;

(b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(c) the manner in which a party has pursued or defended his case or a particular allegation or issue;

(d) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim."

15. As CPR Part 44.2 makes clear, the general rule is that an unsuccessful party should pay the costs of the successful party, but the Court has a discretion to make a different order having regard to "all the circumstances" including the conduct of the parties before as well as during the proceedings.

Unreasonable Failure to Engage in ADR (Mediate)

16. As I have already indicated, this basis for departing from the general rule that the Defendant as a successful party should recover its costs was the central argument in both Mr Speaight QC's written and oral submissions.
17. The basis for the submissions arises in this way. The Claimant was granted permission to bring these proceedings on 24 May 2012. The following day, 25 May 2012, the Claimant wrote to the Defendant's solicitors, Berrymans Lace Mawer on a "without prejudice save as to costs" basis inviting the Defendant to attempt mediation of the dispute. The letter was in the following terms:

"Following the hearing yesterday, and the detailed judgment that followed, I am inviting your client, the University of Newcastle, to attempt to resolve our dispute by mediation.

For my part, I am willing to attend mediation under the auspices of any recognised provider of Alternative Dispute Resolution (ADR).

Look forward to hearing from you."

18. In response to that letter, the Defendant's solicitors replied to the Claimant in a letter dated 7 June 2012 in the following terms:

"Thank you for your 'without prejudice' letter of 25 May 2012.

We can agree in principle to ADR but we shall need to take specific instructions from our client.

Please confirm how you wish to proceed."

19. On 26 June 2012, the Claimant again wrote to the Defendant's solicitors setting out what the letter describes as a "reasonable and practical way forward". The letter is in the following terms:

"In your letter of 7 June 2012 regarding mediation, you asked, how I would like to proceed. The purpose of this letter is to set out what I believe is a reasonable and practical way forward.

Professor James Malone-Lee of the Whittington Hospital in London has offered me a clinical attachment for a year under his supervision, which he is prepared to confirm in writing to the University. If I then complete the attachment successfully, he has also offered to certify it in writing.

Given that I would be connected to a London Medical School for a year, and given the circumstances of my case, I feel there is now sufficient guarantee in place for the University to allow me to re-sit the final exam in 2013.

If as I hope, this suggestion is acceptable, then both parties could attend a mediation at which my suggestion and other bone fide ideas for settlement could be discussed.

I look forward to hearing from you."

20. No response was received from the Defendant's solicitors and on 13 September 2012, the Claimant sent a chasing letter as follows:

"I am disappointed that you have not responded to the without prejudice letter I sent you on 26 June 2012. I appreciate that you may be under pressure of work, but I shall be grateful to hear from you."

21. Again, no response was made by the Defendant's solicitors.
22. However, on 2 April 2013 the Defendant's solicitors sent a "Part 36 Offer Letter". That letter is in the following terms:

"Pursuant to Part 36 of CPR our clients are prepared to offer to bear their own costs if you discontinue all claims against them. For avoidance of doubt if you discontinue your claims our client will not pursue an order for costs against you and any costs you may yourself have incurred will be borne by you.

This offer shall remain open for acceptance for a period of 21 days, and the acceptance must be in writing.

Acceptance after the 20 day period shall only be permissible if the Court gives permission or the parties agree the costs liability.

Kindly acknowledge receipt of this letter and let us know your response."

23. The Claimant made no direct response to that letter and it was withdrawn in a letter from the Defendant's solicitors dated 17 July 2013. However, on 15 October 2013 the Claimant again wrote to the Defendant's solicitors stating that:

"I refer to my letter of 25 May 2012, your firm's letter of 7 June 2012 and my letter of 26 June 2012. I confirm that in principle my position remains unaltered."

24. In his original written submissions and in his oral submissions, Mr Speaight QC contended that in the light of the Claimant's offer to undergo mediation, the Defendant had unreasonably refused to do so. He relied upon the Court of Appeal's decision in Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576; [2004] 1 WLR 3002. Mr Speaight QC developed a number of detailed arguments. He submitted that, applying the relevant factors set out in the judgment in Halsey at [16] and relying on the content of the Claimant's letter of 25 May 2012, the Claimant had established that the Defendant had unreasonably refused to engage in mediation and that, therefore, the court should exercise its discretion to depart from the 'general rule' and make an order of "no order as to costs".
25. However, following the conclusion of the hearing, Mr Speaight QC also placed reliance upon the Court of Appeal's decision in PGF II SA v OMFS Company 1 Limited [2013] EWCA Civ 1288; [2014] BLR 1. Mr Speaight QC submitted that in that case the Court of Appeal had recognised that it was unreasonable, as a general rule, in itself to remain silent in the face of an invitation to participate in ADR (see [34]). Mr Speaight QC submitted that, although there had not been initial silence from the Defendant's solicitors to the Claimant's proposal for mediation, there was "subsequent silence" when they failed to respond to his letter of 26 June 2012 but also his chasing letters of 13 September 2012 and 15 October 2013. Mr Speaight QC submitted that the Defendant's failure justified making 'no order as to costs'.

The Halsey Argument

26. I will deal first with Mr Speaight QC's submissions based upon Halsey. In that case, the Court of Appeal (Ward, Laws and Dyson LJJ) set out the framework for considering whether a failure to agree to ADR was unreasonable and should, as a consequence, attract a costs sanction.
27. At [12] in Halsey, Dyson LJ (delivering the judgment of the Court) set out the relevant provisions in CPR rule 44 that the general rule was that the unsuccessful party will pay the costs of the successful party but the Court may, in its discretion, make a different order. In deciding what order, if any to make, the Court must have regard to all the circumstances including the conduct of the parties both before, as well as during, the proceedings.
28. At [13] Dyson LJ identified that:

"In deciding whether to deprive a successful party of some or all of his costs on the grounds that he has refused to agree to ADR it must be borne in mind that such an order is an exception to the general rule that costs should follow the event."

29. Dyson LJ (at [13]) went on to recognise that the burden was on the unsuccessful party to show that the refusal to agree to ADR was unreasonable. He said this:

"In our view the burden is on the unsuccessful party to show why there should be a departure from the general rule. The fundamental principle is that such departure is not justified unless it is shown (the burden being on the unsuccessful party) that the successful party acted unreasonably in refusing to agree to ADR." (my emphasis)

(See also [28].)

30. At [16] Dyson LJ set out a number of relevant, but non-exclusive, factors to be taken into account in deciding whether a refusal to undergo ADR was unreasonable:

"…The question whether a party 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."

31. In this case, the Claimant says: (1) this was a case suitable for mediation; (2) it was not a case without merit; (3) no settlement offered by the Defendant was rejected; (4) the costs of mediation would not be disproportionately high; (5) mediation was not suggested at a late stage; and (6) there was no reason to think that the Claimant would be intransigent.
32. Mr Speaight QC pointed out that the Defendant's solicitors had agreed "in principle" to ADR in their reply of 7 June 2012 to the Claimant's letter of 25 May 2012 proposing mediation. Mr Speaight QC submitted that that letter could only have contemplated ADR in the form of mediation as it was sent at the time that the parties were aware that the OIA procedure was likely to recommence following the grant of permission in these proceedings which were shortly thereafter stayed on 2 July 2012 for that purpose. Mr Speaight QC relied on the fact that the Claimant's letter of 26 June 2012 did not require the University to grant him a degree on the basis of his 2011 exams; did not seek any payment of money; did not ask the University to do anything which it had previously refused to do or was contrary to its statutes or procedures; and did not seek further use of the University's resources by denying space to another student in Newcastle University. Mr Speaight QC submitted that mediation might have produced an outcome, perhaps even falling short of allowing the Claimant to re-sit his examinations at the University, which the parties had not yet contemplated. He referred me to the case of Dunnett v Rail Track PLC [2002] EWCA Civ 303; [2002] 1 WLR 2434 at [14] where Brooke LJ recognised this possible outcome of mediation.
33. Mr Speaight QC submitted that the Defendant had not responded to the Claimant's offer of mediation and, applying the factors set out in Halsey, there was no good reason for the Defendant not to mediate and the refusal was unreasonable. This was, he submitted, a clear case where the Court should decide that the unsuccessful party should not have to pay the successful party's costs.
34. It was common ground between the parties that the burden was upon the Claimant to show that the Defendant's refusal to engage in mediation was unreasonable. It was, undoubtedly, most unfortunate that the Defendant's solicitors failed to respond substantively to the Claimant's letters inviting mediation beginning on 25 May 2012 but, in particular, with his more specific proposal set out in his letter of 26 June 2012. I will return to this below when I deal with Mr Speaight QC's submission that the Defendant should be deprived of its costs simply because it did not respond.
35. It is important to bear in mind the context and timing of the Claimant's letter of 25 May 2012 and his subsequent letter, in particular, of 26 June 2012 proposing in more detail a possible way forward through mediation. The Claimant's initial letter was written the day following the grant of permission to bring these proceedings. Prior to that, the Claimant had on 13 August 2011 made a complaint to the OIA. The OIA had issued a preliminary adverse decision rejecting the Claimant's complaint on 11 November 2012 but, as a result of the Claimant filing judicial review proceedings shortly thereafter, the OIA procedure was terminated.
36. Following the grant of permission, the Claimant sought to stay these proceedings in order to pursue the complaint further before the OIA. It is clear from a transcript of the judgment of John Randall QC, in granting permission, that it was within the contemplation of the Claimant at that time that he might seek a stay in order to pursue the OIA procedure in preference to these proceedings for which he had been granted permission. The proceedings were, in fact, stayed on 2 July 2012. Thereafter the Claimant invited the OIA to reopen his complaint on 22 July 2012 which it did resulting in the final decision on 28 January 2013 that the complaint was not justified.
37. Consequently, at the time that the Claimant was inviting the Defendant to engage in mediation, the Claimant was simultaneously pursuing his complaint before the OIA. Both parties fully engaged with that process in which the Claimant, in effect, argued the very same points that he raised in these proceedings, namely that the Defendant had marked his final examination not in accordance with what he claimed was a clear scheme set out in the Stage 5 MBBS Handbook and that he had been unfairly prejudiced in the process because the Appeal Adjudicator had failed, in breach of the University's procedure, to show him a submission from the Chair of the Examiners before reaching a decision. The OIA rejected these complaints whilst noting, to put it briefly, that the Handbook could have been clearer. In other words, both parties were engaging in a form of ADR outside the judicial review claim.
38. Mr Speaight QC sought to argue that the OIA procedure was not, in truth, a form of ADR. He accepted that Lord Woolf, in his report Access to Justice (June 1995), accepted that ombudsmen (such as the OIA) were a form of ADR (see Chapter 18, page 137 at para 10). Nevertheless, he maintained that the OIA was not a form of ADR as it did not aim to reach a conclusion by agreement between the parties. In my judgment, that is too narrow a reading of what amounts to ADR in the context, in particular, of public law disputes. In R (Cowl and Others) v Plymouth City Council [2011] EWCA Civ 1935; [2011] 1 WLR 805, Lord Woolf CJ said this at [1]:

"The importance of this appeal is that it illustrates that, even in disputes between public authorities and the members of the public for whom they are responsible, insufficient attention is paid to the paramount importance of avoiding litigation wherever this is possible. Particularly in the cases of these disputes both sides must by now be acutely conscious of the contribution alternative dispute resolution can make to resolving disputes in a manner which both meets the needs of the parties and the public and saves time, expense and stress."

39. At [3], Lord Woolf CJ went on to emphasise, in the context of the court role of active case management, the importance of complaint procedures and other forms of ADR:

"To achieve this objective the Court may have to hold, on its own initiative, an inter partes hearing at which the parties can explain what steps have been taken to resolve the dispute without the involvement of the Courts. In particular the parties should be asked why the complaints procedure or some other form of alternative dispute resolution has not been used or adapted to resolve or reduce the issues which are in dispute."

40. Mr Speaight QC submitted, relying on [25] in Cowl, that Lord Woolf CJ was concerned only with ADR processes which attempted to bring the parties to an agreement through mediation.
41. At [25] Lord Woolf CJ commenting on the particular facts of that case, noted that if the parties could not have come to a sensible conclusion then:

"…an independent mediator should have been recruited to assist. That would have been a far cheaper course to adopt. Today sufficient should be known about alternative dispute resolution to make the failure to adopt it, in particular when public money is involved, indefensible."

42. At [27], Lord Woolf CJ noted that lawyers had:

"a heavy obligation to resort to litigation only if it is reasonably unavoidable."

43. Lord Woolf CJ went on (at [27]) to state:

"If they cannot resolve the whole of the dispute by the use of the complaints procedure they should resolve the dispute so far as is practical without involving litigation. At least in this way some of the expense and delay will be avoided."

44. I do not understand Lord Woolf CJ to exclude from the ambit of ADR procedures, particularly in public law cases, dealing with complaints including ombudsmen such as the OIA.
45. The reality in this case, in my judgment, is that the Claimant initially, and after these proceedings were stayed in July 2012, was in effect pursuing a form of ADR in which the Defendant actively and fully engaged. The Claimant was 'opting in' and 'opting out' of these proceedings and the OIA procedure between 23 August 2011 (when he first made a complaint to the OIA) and 28 January 2013 (when the OIA issued its final decision on his complaint). At the time that the Claimant was proposing mediation both parties were fully engaged in the OIA procedure, the substance of which was the very same issues that the Claimant raised in these proceedings.
46. In addition, it is a relevant and important factor in my judgment that the substance of the Claimant's case, namely that his Stage 5 examination had not been marked in accordance with the Stage 5 MBBS Handbook, was a matter, potentially at least, of wider impact affecting other students who had or were currently studying medicine at the University.
47. In determining whether the Claimant has established that the Defendant has unreasonably refused to engage in mediation, I turn now to the non-exclusive list of factors set out in [16] of Halsey.
48. Mr Speaight QC submitted that the Claimant's case was not unsuitable for mediation as evidenced by the Defendant's solicitors' agreement in principle to do so. Whilst the Defendant's solicitors did state that they agreed "in principle to ADR", their letter nevertheless went on to say that "we shall need to take specific instructions from our client". That was not, in my judgment, an unqualified acceptance that mediation was appropriate. In any event, there was at that time no proposal from the Claimant as to what mediation might achieve. To the extent that mediation was proposed in order to resolve whether the Claimant's final examination had been correctly marked and the appeal procedure conducted fairly, those were matters which had already been pursued before the OIA and given the indication from the Claimant at the permission hearing were likely to be pursued again once a grant of a stay of these proceedings was obtained from the Court as, in fact, it was shortly after on 2 July 2012. It is difficult to see what, in relation to those issues, mediation could achieve or, at least, that it was unreasonable for the Defendant to continue fully to engage with the existing ADR procedure (through the OIA) rather than engage in a different and further form of ADR through mediation.
49. As regards the specific matters set out and proposed by the Claimant in his letter of 26 June 2012, I accept Mr Cornwell's submission on behalf of the Defendant that there was, in effect, nothing further to mediate beyond the substance of the Claimant's case that he was entitled to his degree because he had been wrongly marked in his final examinations. The Claimant had already been allowed to re-sit his final year having initially failed in 2010. I did not understand it to be disputed that the Defendant could in exceptional circumstances allow a further re-sit but nothing put forward by the Claimant raised any exceptional circumstances which might, on further exploration through mediation, cause the Defendant to revisit its decision and allow the Claimant a second re-sit opportunity. The Claimant was not putting forward any mitigating or exculpatory circumstances. It was not enough, in my judgment, for the Claimant to simply say he wished to undertake a placement and then engage in ADR on whether he could re-sit for a second exceptional time.
50. As regards the merits of the case, the Defendant was entitled to take the view, despite the grant of permission, that it had grounds to resist the challenge made to its decision. It already had an initial decision of the OIA in its favour. I do not accept Mr Speaight QC's submission that the terms of the grant of permission by the Deputy Judge justified a view that the Claimant's case was meritorious. It is trite to state that all that the Deputy Judge was required to do was determine whether the Claimant's case was arguable on the basis of the material then before him. This point, of course, relates to the issue which was contemporaneously (or shortly thereafter) being pursued before the OIA. Mr Speaight QC's reliance upon the grant of permission cannot, in my judgment cast any adverse light on the Defendant's failure to engage in ADR in relation to possible outcomes which, as proposed by the Claimant, were diametrically opposed to the relief that he sought in the judicial review proceedings and by way of outcome in the OIA proceedings. In relation to those, as I have already indicated, the Claimant put forward no plausible account of exceptional circumstances which would have entertained any reasonable possibility of his being allowed to re-sit his final examinations for a second, exceptional time. The Defendant had, in my judgment, a reasonable case that it had not acted unlawfully and that the Claimant had not been unfairly prejudiced by its procedures. Whether or not that was a matter actively in contemplation by the Defendant has not been made plain in these proceedings. However, I am in no doubt that the defence of its position both as regards the Claimant and, of course, more widely for other students marked under the same scheme was not one which could be properly characterised as unreasonable in the light of the OIA's initial decision despite the grant of permission however forcefully expressed by the Deputy Judge.
51. The next factor looks to whether other settlement methods have been attempted. Here, a settlement method was, indeed, being attempted namely the Claimant's initiation of the OIA procedure. At the point at which the Claimant proposed mediation, it had been finally resolved against him. That procedure was stopped as a result of the Claimant's decision to bring these proceedings. It was, however, shortly to be reopened again at the Claimant's behest following his successful application to stay these proceedings on 2 July 2012; a process which, it was accepted before me, was followed with the agreement of the Defendant. As Dyson LJ made plain at [20] of Halsey, this factor is no more than an aspect of the final factor set out in the Court's judgment, namely whether the ADR had a reasonable prospect of success. The proposed mediation was, of course, directed to a form of outcome different from that sought in the judicial review proceedings and in the proceedings before the OIA as I have already noted. In that latter regard, as I have explained above, they had little or no prospect of success in arriving at an outcome (as sought by the Claimant) of allowing him to re-sit for a second time his final examinations.
52. Turning to the remaining factors, Mr Cornwell did not demur that the costs of mediation would be unlikely to be disproportionately high but, in any event, its significance must be seen in the context of the fact that there was an alternative dispute resolution procedure, namely the OIA procedure which had been, and at the time mediation was being proposed would shortly again be, invoked by the Claimant.
53. As regards delay, Mr Speaight QC submitted that mediation was not suggested at a late stage but at the time that permission to bring these proceedings was given. Whilst mediation suggested late in the day may have, in some cases, the effect of delaying the core proceedings, I do not see that factor as having particular weight in this case. The timing of the offer is, in my judgment, relevant as I have already indicated. Again, in determining whether it was unreasonable for the Defendant not to engage in mediation, it was relevant that the timing of the invitation coincided with the Claimant's indication that he intended to (and subsequently did) pursue again his complaint to the OIA.
54. The final factor is whether the mediation had a reasonable prospect of success. In Halsey Dyson LJ at [28] placed the burden of proof on this fact upon the unsuccessful party. He said:

"It seems to us that a fairer balance is struck if the burden is placed on the unsuccessful party to show that there was a reasonable prospect that mediation would have been successful."

55. At [23], Dyson LJ referred to the case of Hurst v Lemming [2003] 1 Lloyd's Rep 379, a case upon which Mr Speaight QC relied in his oral submissions. At [26], Dyson LJ disagreed with Lightman J's view in Hurst that the Court was confined to considering whether "objectively" mediation had any reasonable prospect of success. Dyson LJ remarked:

"That is an unduly narrow approach, it focuses on the nature of the dispute and leaves out of account the parties' willingness to compromise on the reasonableness of their attitudes."

56. In this case, I am not satisfied that the mediation had any reasonable prospect of success. As I have already set out, the Claimant's case in mediation was to seek an outcome different from that which was sought in the judicial review proceedings and before the OIA. It was simply to persuade the Defendant to allow the Claimant to re-sit his final examinations for a second exceptional time. In his letter of 26 June 2012, the Claimant relies, not upon mitigating circumstances which might have impacted upon his examination result, but rather seeks on the basis of a work placement subsequent to his leaving the Defendant University as a basis for permitting him to re-sit his exams. In that respect, there was, in my judgment, no reasonable prospect of the mediation succeeding.
57. To the extent that the Claimant relies upon mediation to resolve the issues raised in these proceedings or before the OIA, it was entirely reasonable for the University to seek to defend its position that the Claimant's examinations had been marked in accordance with the Stage 5 MBBS Handbook. Whilst I accept that a party may not be able to rely upon a position which is "unreasonably obdurate" (see Halsey at [26]), that is not a characterisation which can be properly attributed to the Defendant in these circumstances. It was entirely reasonable given the OIA's preliminary ruling and the wider importance of the issue of the proper meaning of the Stage 5 MBBS Handbook whose integrity the University was entitled to defend in these circumstances.
58. Taking all these matters into account, I am unpersuaded that the Defendant was unreasonable in failing to engage in ADR processes (namely mediation) outside the OIA procedure and, when that was completed, thereafter. I therefore reject this basis upon which the Claimant argues that the general rule should be departed from, namely that he as the unsuccessful party should pay the Defendant's costs.

The PGF II Argument

59. In his oral submissions, Mr Speaight QC relied upon the first instant decision in PGF II SA v OMFS Company. Entirely properly, following the hearing Mr Speaight QC informed the Court that he had become aware of the fact that this decision had been appealed to the Court of Appeal and its decision had been recently reported. In the light of that, I agreed to the parties making brief supplementary submissions in respect of the Court of Appeal's decision.
60. In his written submissions, Mr Speaight QC placed reliance upon a passage in the judgment of Briggs LJ (with whom McFarlane and Maurice Kay LJ agreed) at [34]. Mr Speaight QC submitted that Briggs LJ had set out a guiding principle that applied in this case, namely that as a general rule silence in the face of an invitation to participate in ADR was unreasonable in itself.
61. Mr Speaight QC submitted that at [51] and [52] Briggs LJ suggested that a range of cost sanctions were available ranging, in the most serious and flagrant cases to the successful party being ordered to pay in part or even all the unsuccessful party's costs and, at the other end of the range, the Court disallowing only a modest part of the successful party's costs. Mr Speaight QC submitted that the present case fell "comfortably" on the spectrum to justify a refusal to allow recovery of all the University's costs.
62. Mr Speaight QC accepted that this was not a case where there was "initial silence" in response to the proposal to mediation as the Defendant's solicitors had agreed to it "in principle" but that that only made the subsequent silence worse. Further, he submitted that that subsequent silence was made worse by the fact that the University did not reply to the Claimant's letter of 26 June 2012 and to his two later chasing letters of 13 September 2012 and 15 October 2013. Further, Mr Speaight QC relied upon the terms of the Claimant's letter of 26 June 2012 which, he submitted, put forward a "modest" proposal of a way forward which the University had no good justification for declining to discuss.
63. In his written submissions in response, Mr Cornwell submitted that Briggs LJ at [34] of his judgment had identified a "general rule" but not one that was an "invariable rule". Further, the burden of proof in establishing unreasonable refusal to engage rested squarely on the Claimant (see [43]). Further, an unreasonable refusal to engage in ADR, Mr Cornwell submitted, was not said by Briggs LJ to produce any "automatic results in terms of cost penalty". It was merely identified as an aspect of the parties' conduct which needed to be addressed in a wider balancing exercise (see [51]).
64. In relation to this case, Mr Cornwell acknowledged that the Defendant had been discourteous in not responding to the Claimant's invitations to engage in mediation. However, he submitted that the Defendant had not refused to engage in ADR. On the contrary, it had participated in the OIA process. Mr Cornwell submitted that the PGF II case did not establish that a party who was already engaged in one form of structured ADR (in this case the OIA procedure) was acting unreasonably by refusing to engage in a yet further form of ADR (in this case mediation). Secondly, Mr Cornwell submitted that PGF II was a case involving a commercial dispute. The present case was a public law dispute and the alternative tools for ADR in this area differed and included a complaint to an ombudsman such as the OIA. Thirdly, Mr Cornwell submitted that even if, contrary to his primary submissions, the Defendant's failure to respond was unreasonable, it was but one factor to be considered by the Court in exercising its discretion as to costs. Taking into account all the circumstances, Mr Cornwell submitted that there should be no, or at least only a modest, reduction in the costs to which the Defendant was entitled.
65. In the PGF II case, Briggs LJ set out the principle relied upon by Mr Speaight QC at [34] in the following terms:

"In my judgment, the time has now come for this court firmly to endorse the advice given in Chapter 11.56 of the ADR Handbook, that silence in the face of an invitation to participate in ADR is, as a general rule, of itself unreasonable, regardless whether an outright refusal, or a refusal to engage in the type of ADR requested, or to do so at the time requested, might have been justified by the identification of reasonable grounds. I put this forward as a general rather than invariable rule because it is possible that there may be rare cases where ADR is so obviously inappropriate that to characterise silence as unreasonable would be pure formalism. There may also be cases where the failure to respond at all was a result of some mistake in the office, leading to a failure to appreciate that the invitation had been made, but in such cases the onus would lie squarely on the recipient of the invitation to make that explanation good."

66. At [35]-[37], Briggs LJ explained that:

"[t]here are in my view sound practical and policy reasons for this modest extension to the principles and guidelines set out in the Halsey case, which concerned reasoned refusals, provided in prompt response to the request to participate in ADR."

67. At [51], Briggs LJ set out the consequence of a finding that a party has unreasonably failed to engage in discussion about ADR or has unreasonably refused to participate in ADR as follows:

"…a finding of unreasonable conduct constituted by a refusal to accept an invitation to participate in ADR or which is more serious in my view, a refusal even to engage in discussion about ADR, produces no automatic results in terms of a costs penalty. It is simply an aspect of the parties, conduct which needs to be addressed in a wider balancing exercise. It is plain both from the Halsey case itself and from Arden LJ's reference to the wide discretion arising from such conduct in the Hewitt case [SG v Hewiit [2012] EWCA Civ 1053], that the proper response in any particular case may range between the disallowing of the whole, or only a modest part of, the otherwise successful party's costs."

68. As Briggs LJ pointed out at [34], the failure to respond to an invitation to participate in ADR is as a "general rule" unreasonable but it is not an invariable. Briggs LJ went on to note two possible exceptions. The first was in "rare cases" where to characterise silences as unreasonable would be pure formalism. The second exception was where the failure to respond was due to some mistake, such as an administrative error, leading to a failure to appreciate that an invitation had been made.
69. Although Mr Speaight QC sought to make much of the initial agreement by the Defendant solicitors to mediation "in principle", in truth the Claimant was met effectively with silence. With the passage of time, the Defendant's position equated, in my judgment, to the situation contemplated by Briggs LJ of "silence in the face of an invitation to participate in ADR".
70. It is plain from Briggs LJ's judgment (at [34]), that silence may be unreasonable and lead to costs sanctions even if "outright refusal" would be justified on reasonable grounds. However, as Briggs LJ recognised, that is not an "invariable rule". The burden is upon the Claimant to show that the Defendant's failure to respond in the face of his invitation to engage in mediation was unreasonable.
71. As I have already indicated, in response to the Claimant's initial letter of 25 May 2012, the Defendant's solicitors did respond on behalf of the Defendant in their letter of 7 June 2012 indicating that they could agree "in principle" to ADR but that they had to take specific instructions from the Defendant. The Claimant then sent his letter of 25 June 2012 in which he set out his proposal of a placement for a year and his wish then to re-sit his exam. Shortly after this letter was written, on 2 July 2012 these proceedings were stayed in order that the Claimant could again pursue his OIA complaint. On 22 July 2012, just under a month after his letter of 26 June 2012 to the Defendant's solicitors, the Claimant wrote to the OIA inviting them to reopen his complaint which the OIA then did. The Defendant was then actively engaged in what, I have found to be, the ADR process before the OIA. In effect, these events provided the focus of the Claimant's dispute with the Defendant.
72. It is also important to bear in mind the main purposes of ADR which is to avoid (or narrow the scope of) litigation and thereby avoid court and other costs. Briggs LJ identified this at [39] in the PGF II case as follows:

"A positive engagement with an invitation to participate in ADR may lead in a number of alternative directions, each of which may save the parties and the court time and resources. The invitation may simply be accepted, and lead to an early settlement at a fraction of the cost of the preparation and conduct of a trial. ADR may succeed only in part, but lead to a substantial narrowing of the issues".

73. There does not seem to be any doubt as to what the response would have been. It is difficult to see how any further ADR (beyond the OIA procedure) could have limited or avoided the litigation that challenged the legality of the Defendant's decision and put in issue the integrity of the Stage 5 Examination marking scheme.
74. It was unfortunate and, as Mr Cornwell accepted, discourteous of the Defendant not to respond to the Claimant's invitation. However, faced with the Claimant pursuing the OIA procedure, I am not persuaded that, despite his chasing letters of 13 September 2012 and 15 October 2013, that the Defendant's silence should be characterised as unreasonable and, in itself, suffices to deprive the Defendant of all its costs which was, throughout his oral and written submissions, Mr Speaight QC's position on behalf of the Claimant.
75. For all these reasons, I reject the Claimant's submissions that the general rule should be departed from on the basis of the Defendant's unreasonable failure to respond to an invitation to engage in mediation or to engage in mediation.

The Defendant has not Succeeded on All Issues

76. Mr Speaight QC further submitted that the Defendant had only succeeded in part and applying CPR Part 44.2(4)(b) should not, as a consequence, recover its costs from the Claimant.
77. The Claimant's two main contentions in the proceedings were:

(1) His final examination had not been marked in accordance with the clearly set out scheme in the MBBS Stage 5 Handbook;

(2) That the internal appeal procedure was unfair (a) because he had not been shown a submission by the Chair of the examiners which had been sent to the Appeal Adjudicator; and (b) the Appeal Adjudicator had delegated his decision to the Chief Examiner.

78. In my judgment, I rejected the Claimant's case based upon (1). I also rejected his claim on (2)(b).
79. As regards (2)(a), it was accepted that there had been a breach of procedure but, in the light of all the circumstances, I concluded that he had not been prejudiced (not least because of the OIA procedure) and as a result the Claimant was not entitled to any remedy.
80. I do not accept Mr Speaight QC's submission that, in effect, the Defendant only succeeded in part such that the Defendant should be deprived of its costs under the general rule on this basis. The substantive interpretative point was decided against the Claimant. The substance of the Defendant's arguments, in relation to the appeal process, were accepted by me albeit that they went to the issue of whether a remedy should be granted (whether in public law or contract) rather than whether the proceedings were unfair.
81. Mr Speaight QC's submission that the Defendant did not succeed on the 'available alternative remedy' and 'delay' points which were also relied upon by the Defendant is only partially correct. I expressed no concluded view on the former (see [143] of my judgment), as it was not necessary given the conclusion I reached that the Claimant could not succeed on the substantive interpretative point or in obtaining any remedy in relation to the other substantive ground relied upon by the Claimant. It is true that I rejected the Defendant's argument that the Claimant should not succeed on the basis that there had been a delay in bringing the judicial review claim and that delay was an answer to the Claimant's success in these proceedings (see [145] of my judgment). Like the 'alternative remedy' issue, these were legitimate matters raised by the Defendant which, in the event, did not determine the outcome of the case. The former was left unresolved and the latter, on which I found against the Defendant, in any event only occupied a very brief part of the written and oral submissions in the case. The Defendant was, in substance, the successful party and I see no basis to deprive the Defendant of its costs under the general rule as a successful party on this basis alone.

The Defendant's Own Mistakes

82. Finally, Mr Speaight QC submitted that the Defendant's own mistakes gave grounds for the case and, therefore, the Claimant should not be required to pay the Defendant's costs. There would have been no claim based upon a contention that the University had failed to follow its own marking scheme set out in the MBBS Stage 5 Handbook if that Handbook had been clearly drafted. Mr Speaight QC submitted that the Appeal Adjudicator had found the Handbook to be unclear and the OIA had criticised it as being ambiguous. In addition, the University had, in the following year, revised its wording so as to achieve a greater clarity which the Academic Registrar on dealing with the Claimant's internal appeal and review considered desirable. He pointed to the requirement from the GMC that marking schemes be clear and transparent.
83. Mr Speaight QC also submitted that the unfairness ground could not have been relied upon if the University had followed its own procedure and disclosed the memorandum from the Chair of the Board of Examiners sent to the Appeal Adjudicator.
84. Whilst the OIA did criticise the MBBS Stage 5 Handbook as being ambiguous, the Claimant's case was not that it was unclear but rather that it was unambiguous and in his favour. In other words, his case was that if the Handbook had been properly applied, his exam result was wrong. The lack of clarity was recognised early on in the internal appeal process and before these proceedings were begun. I am unable to see any basis for saying that the Defendant should be deprived of its costs simply because the terms of the Handbook were not clear. Its correct meaning was in dispute. Legal disputes often involve disputed interpretation of documents and such like. It is not a proper basis for depriving the successful party of its costs simply because the proper interpretation was litigated.
85. In relation to the unfairness point, even if the Defendant had followed its appeal process and disclosed the Chair of Examiners memorandum to the Claimant, that did not prejudice the Claimant as I decided in my judgment. In particular, I found that the Claimant had an opportunity to raise this issue in the OIA complaints proceedings which had dealt with it. The Claimant lost on the interpretation point before the Appeal Adjudicator, and as my judgment makes plain, that was correct. The interpretation point would remain resolved unsatisfactorily as the Claimant saw it and, even if the memorandum had been disclosed, would not have avoided this litigation when the Claimant was dissatisfied with the outcome of the OIA procedure.
86. I, therefore, do not accept Mr Speaight QC's submissions under this heading that there is any proper basis for departing from the general rule that the Claimant (the unsuccessful party) should pay the costs of the Defendant (the successful party).

Three Final Points

87. First, both Counsel drew my attention to the 'without prejudice' offer made by the Defendant's solicitors on 2 April 2013 not to pursue a costs order against the Claimant if he discontinued these judicial review proceedings. That offer was made after the final OIA decision on 28 January 2013 which was adverse to the Claimant and which, thereafter, led the Claimant to again pursue these proceedings. The Claimant did not respond to the offer and it was withdrawn on 17 July 2013. Mr Cornwell relied upon this Part 36 offer either under Part 36 or as an aspect of the Claimant's conduct under Part 44.2(4)(c).
88. I confess some difficulty in seeing how Part 36 can apply here. That deals with a situation where a successful party has failed to accept a Part 36 offer and, in succeeding, the party did no better than the offer which they failed to accept. In those circumstances, the successful party is deprived of their costs arising after the failure to accept the Part 36 offer. Here, the Claimant is not the successful party. There is no question, therefore, of depriving him of his costs following his failure to accept the Part 36 offer not to pursue these proceedings on the basis that the Defendant would then seek an order for costs.
89. In the alternative, Mr Cornwell submitted that the Claimant's failure to accept the offer was relevant to his conduct under Part 44.2(4)(c) of the CPR. As Mr Speaight QC submitted, to this extent the Claimant's conduct does no more than support the 'general rule' that the Defendant, as the successful party, should recover its costs. To that extent it is relevant but no further.
90. Secondly, Mr Cornwell relied upon the fact that the Claimant had not complied with the Pre-Action Protocol by serving a Pre-Action Protocol (PAP) Letter. That should be reflected in the costs order made by virtue of CPR Part 44.2(5)(a). Mr Speaight QC submitted that the Defendant was well aware of the basis of the Claimant's case because of the earlier correspondence and, of course, because of the issues raised in the internal appeal procedure. Mr Cornwell accepted in his submissions that I should not put a great deal of weight on this matter but it was relevant to the exercise of any discretion to depart from the general rule. In my judgment that is correct. The failure to comply with the Pre-Action Protocol is relevant to the exercise of my discretion but it does not add much weight to the principal arguments made by the parties in this case.
91. Thirdly, Mr Speaight QC submitted that I should take into account the Claimant's impecuniosity, a factor which Mr Speaight QC submitted had been relied upon by Rix LJ in Rolf v De Guerin [2011] EWCA Civ 78 at [49]. I have grave doubts as to whether impecuniosity is relevant in deciding whether a party should in principle be subject to an order for costs and it is by no means clear that Rix LJ at [49] concluded to the contrary. However, in this case there is no evidence that the Claimant is impecunious and so, in any event, it cannot be a relevant factor in exercising my discretion to depart from the general rule that the Claimant should pay the Defendant's costs.

Decision

92. For the above reasons, the appropriate order for costs in this case is that the Claimant should pay the Defendant's costs in the case subject to detailed assessment if not agreed.