England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand London WC2A 2LL
		11 December 2009

1. MR JUSTICE MACDUFF: This is an application made on behalf of the claimants. The application falls into three parts and is opposed as to all three by the defendant. I should say, first of all, a few words about the background to these applications.
2. This is the Atomic Veteran Group Litigation which is brought before the court pursuant to a Group Litigation Order. There are just over 1,000 claimants although there are others standing on the sidelines interested in the outcome of these proceedings. The claimants are mainly or exclusively ex-servicemen and their personal representatives and dependants who allegedly suffered injury some 50 years ago arising out of, so it is alleged, the Nuclear Weapons Test Programmes carried out by the defendant in the South Pacific.
3. There are clearly numbers of hurdles for the claimants to negotiate towards the goal of damages. Breach of duty and negligence generally are denied, as is causation, in all of the cases. In addition there was, and remains, an issue as to limitation. As to limitation it may be observed there are different issues in different cases. This is not something that can be tried as a generic issue binding upon or affecting all claimants. The claimants proceed under a conditional fee agreement. The Group Litigation Order, although made some time ago, is really in its early days, no managing judge having yet been assigned to this case.
4. Earlier this year, using ten lead claimants, Mr Justice Foskett tried a limitation issue. There was also a strike out application before him. On 5th June 2009 he delivered a substantial written judgment limited to the ten lead cases, refusing to strike out the claims and effectively determining the limitation issues in favour of the claimants. At the conclusion of that hearing the proceedings were stayed by consent until the middle of September. The stay also applied to any question of appeal although the learned judge granted permission to appeal to the Court of Appeal in respect of his judgment. The stay was lifted in the middle of September and the defendant has indeed filed an appeal in the Court of Appeal, that appeal having been fixed for determination later this year and allocated a period of three weeks.
5. The learned judge heard submissions in respect of costs of the preliminary issue. That was not a straightforward matter and the defendant had an argument that costs should be in the case or some other costs order should be made, bearing in mind that this was only the first of a series of hurdles, and also that there was no undertaking or assurance that the ten lead cases would stay within the race and that there was nothing to stop a lead claimant, having won that issue, from discontinuing the claim.
6. However, having heard those submissions, the judge ordered the defendant to pay the costs of and incidental to the limitation issue, to be assessed on a standard basis if not agreed. He expressly held over the question of whether that detailed assessment should take place earlier rather than later; that is to say whether the detailed assessment should await the outcome of the whole litigation process. He made an order to the effect that that would be determined at a case management conference to be arranged after the expiry of the stay. The stay has now been lifted, so that becomes a live issue again. He also ordered the defendant to pay £7.5 million on account of those costs which he had awarded to the claimants.
7. The position was thus reached where there had been a determination in favour of the ten lead claimants on the issue of limitation. The breathing space period of the stay has now expired and the defendant has indeed, with the learned judge's permission, appealed to the Court of Appeal. I can also pause to make this observation: the costs of the limitation issue, estimated by the claimant and to be put before the costs judge when the detailed assessment takes place, is something in excess of £11 million, of which, as I have already said, there has been an order for the interim payment of significantly more than 60 per cent of that sum.
8. There are, as I have noted, three applications before me today. First, an application that I should make orders requiring the parties to attempt to resolve this dispute by mediation; that I should use my case management powers to do so. Second, that I should act upon the invitation of Mr  Foskett J and, now that the stay has been lifted, revisit the question of the detailed assessment – whether it should be ordered to take place now in advance of the rest of the trial and, I note, en passant, in advance of the hearing of the appeal. Third, also in respect of costs, that I should revisit the interim payment and order a further £2 million to be paid by the defendant forthwith on account of costs. All three applications are opposed by the defendant.
9. To assist me in reaching decisions on these three matters, I have been provided with very detailed skeleton arguments by both parties supplemented by oral submissions. I have also been provided with witness statements by Mr Neil Sampson, on behalf of the claimant, and Ms Jasminder Gill, on behalf of the defendant. I have considered all those carefully and I hope I will be forgiven if, in this judgment delivered ex tempore, I do not get to grips with every piece of evidence and every submission in detail.
10. So far as the application for an order requiring (or perhaps slightly less than requiring) the parties to mediate, I should mention the actual orders which are requested in the application notice. The first, although not in numerical order, is a request for an order that the parties shall take serious steps to resolve their dispute by mediation by no later than 26th February 2010. Subsidiary to that order, I am asked to make an order that the parties shall, within 21 days, exchange lists of 3 neutral individuals able to accept an appointment to act as mediator and that they shall thereafter engage in good faith to endeavour to agree a neutral individual from those lists.
11. The request really is foreshadowed by remarks that Mr Justice Foskett made at the time he handed down his judgment and shortly thereafter; comments with which I wholly agree. I quote only this:

"I was told during the hearing on 16 June that the legal teams had agreed to a stay on any further proceedings (including any proposed appeal), with permission to apply to restore those proceedings, until September 14 to enable them to "take stock" and, as I understood them, to consider possible avenues of settlement. Doubtless that will be seen as welcome news by many interested in this case. All I can do is to express the hope that this moratorium will not be used simply for both legal teams to draw breath, re-group and recommence battle in the Autumn without any serious effort being made to address a sensible and constructive resolution to these long-standing issues. Going through the motions will not be good enough."

He made other similar remarks to which I have been referred.

12. On behalf of the claimants it is submitted that the court does have the power to order a reluctant party into mediation and Mr Kent has provided me with a number of authorities to support that proposition. There is no doubt that the court has very wide powers of case management and there is no doubt that, enshrined within the Civil Procedure Rules, there is an exhortation to the court to encourage the parties to mediate.
13. Since the application was formulated, a concession has been made. It was noted by the defendant that a standard order in the Commercial Court reads as follows:

"The parties shall take such serious steps as they may be advised to resolve their disputes by ADR procedures before the neutral individual or panel so chosen by no later than ..."

Those words reflect the words in the application except for the addition of the further words "as they may be advised".

14. That is the form of standard order which is made in the early days of case management of the case in the Commercial Court. It is also the sort of order that is used more and more frequently up and down the land in all sorts of civil cases. It provides the encouragement. It also proveds the vehicle which the parties can choose, if they wish, to climb upon. It is not a bespoke order to fit a particular set of circumstances, it is an order which sometimes results in mediation and sometimes fails to do so.
15. The issue upon this question subdivides into three. First, does the court have power to order mediation as opposed to merely encourage? Second, whether mediation is appropriate here in any event; and third, whether on the facts the claimants are correct in submitting that the defendant has been recalcitrant in considering a negotiated settlement as urged by the learned judge. As to that third issue, I do not know sufficient of the background. I note from the skeleton arguments and the witness statements and some of the documents exhibited that there appears to have been some difficulty of communication between the parties in recent times. I put it no higher than that. The Defendants deny that they have been reluctant to negotiate. The Claimants assert that there has been such reluctance.
16. On behalf of the claimant it is now conceded that the most they would require from me is an order in the same terms approximately as that contained in the Commercial Court Guide, that is to say requiring the parties to take such serious steps as they may be advised, allowing the parties, effectively, to choose.
17. I propose to do two things. First of all, to say that I endorse and agree with the sentiments expressed by Mr Justice Foskett and that I would urge the parties to consider mediation. Secondly, however, to say that I have reached the conclusion that in this particular case an order to that effect would not be helpful or appropriate. The parties have already received the encouragement, and whereas the horse may be taken to water and not made to drink, so a party can be taken to mediation without being required to mediate seriously. It is of note that every mediator is trained to communicate to the parties at the very outset that at any stage the mediation may be unilaterally closed down. I urge the parties to reconsider and I agree to this extent with Mr Kent's submissions; that there is the possibility that the intervention of a neutral third party might enable short cuts to be taken insofar as the parties have found it difficult to talk, certainly at solicitor level, directly to each other. However, if the defendant wishes to negotiate on a counsel-to-counsel basis, so be it. There is nothing that an order from me would achieve.
18. On the question of whether the court is able actually to order mediation as opposed to encourage it, I have been referred to authority, the well known case of Halsey v Milton Keynes General NHS Trust [2004] EWCA (Civ) 576, of course, as well as the case of AB & Ors v Wyeth [1997] 8 Med LR 57 with particular reference to dicta of Lord Justice Steyn. I have also been referred to a speech given by Sir Anthony Clarke, then Master of the Rolls. That was a speech in which he could be taken to be saying that mediation could be something which the court could order, over and above encourage. It was a speech made not in court, but to an invited audience in Birmingham. However, whether I have the power to order mediation or merely to encourage, I do not consider it would be helpful for me to put anything in my order.
19. What about the costs? Here there are two applications. The first, that there should be an immediate detailed assessment of the costs which Foskett J awarded. I have already noted that provision was made in his order for this matter to be revisited at this stage after the lifting of the stay. It seems to me that in this matter I have a complete discretion, keeping my eye, as I do, on the main pillars of the overriding objective of dealing with the matter fairly, proportionately and doing justice between the parties.
20. As a background to this application, one cannot fail to take into account that a substantial sum has already been granted by way of interim payment. Nor can one fail to observe that the very order itself is under appeal; that the Court of Appeal may reverse the learned judge, in which case it is possible that no costs would be payable and an order would need to be made for return of those costs already paid. Also of prime significance is the fact that the detailed assessment would be long, expensive and potentially a complete waste of both time and money, depending upon the outcome in the Court of Appeal.
21. There is a further consideration. It seems to me that there are potential advantages to waiting until the conclusion of the litigation. In my judgment it is sensible that this assessment could take place at the same time as any other assessments which are ordered; so there can be set-offs and the like depending upon what the final orders are. I have reached the conclusion that the normal rules should apply here. The landscape has changed since the learned judge made provision for the matter to be revisited and, in my judgment the balance is substantially in favour of the defendant. I decline to order an assessment to take place immediately.
22. As to the final application, this is an application for a further substantial interim payment to lift that which has already been granted from £7.5 million to £9.5 million (having noted that the claim for costs is to be pitched at something over £11 million). For the purpose of this argument I am prepared to accept that the overwhelming likelihood is that the claimant will be entitled to recover the premium of the after-the-event insurance policy. I am also prepared to accept that there is authority for me to revisit this, notwithstanding that Mr Justice Foskett had already, with the same material as I have, made his order.
23. But there are substantial risks about a further interim payment. There is already an existing risk of the need to repay the substantial sum already paid, but I note also that there may well be a risk that a reasonable proportion of the costs would be exceeded, even if the appeal in the Court of Appeal were to fail. The defendant would wish to argue at the detailed assessment (depending to a significant extent, I suppose, on disclosure of documents) that some of these costs were incurred in the case as a whole (and not just in respect of the matter heard before Foskett J). They should fall outside this particular assessment. Moreover, it is not just the issue of limitation which is with the Court of Appeal and the different cases may be decided differently on their own facts. There is the question of strike out and the Court of Appeal may well take the view that an adjustment in the costs order ought to be made regardless of the result of the appeal. Again, I have a wide discretion. I keep my eye on the correct ball of fairness, proportionality and the like and again I determine this issue in favour of the defendant. There should be no further interim payment.
24. I make one or two additional observations. There are two things happening at the moment. One, I hope, is an ongoing dialogue, however it is promoted, about the possibility of some consensual outcome to this litigation. If that can be achieved, the earlier it is achieved the better before the appeal in the Court of Appeal and those costs have been incurred.
25. The second thing that is happening, of course, is the litigation itself inside court and any future case management conference, it seems to me, is far better convened against a settled landscape. How would one begin to case manage this case further except in perhaps small isolated areas when one does not know the outcome of the strike out appeal and the limitation appeal? Before sensible case management can occur, the comments of the Court of Appeal would be of very great assistance to the judge who is eventually appointed to case manage this case.
26. I also finally observe that the Court of Appeal has its own mediation service and the Court of Appeal may well wish to consider mediation with the parties later in the year.
27. Costs of today are reserved.

Judgment perfected and approved as above

………………………………………..

The Honourable Mr Justice MacDuff

18th January 2010