Garritt-Critchley v Andrew Ronnan and Solarpower PV Ltd [2014] EWHC 1774 (Ch)

by Tony Allen Solicitor, Mediator and Senior Consultant to CEDR

The dismay bordering on disbelief felt by many mediators after the Court of Appeal’s refusal to sanction the successful defendant in Swain Mason v Mills & Reeve for declining to mediate, even when recommended by a judge, on the basis that the parties were too far apart has been happily swept away by the as yet unreported case of Garritt-Critchley v Ronnan [2014] EWHC 1774 (Ch).  In a decision of HHJ Waksman sitting as a High Court Judge in the Manchester District Registry, the claimants were awarded indemnity costs against the defendants, who agreed between trial and judgment to accept the claimant’s Part 36 offer made two months before trial of £10,000.

Late acceptance of a Part 36 offer leaves the whole costs question to be determined by the judge, and a claimant would be optimistic about being awarded standard basis costs up to the offer and perhaps indemnity costs from the date of the offer, although the claim was said originally to be for £208,000. However, the outcome here was that indemnity costs were ordered against the defendants for the whole of the claim, a truly penal order. The defendants had steadfastly declined to mediate from the claimant’s first invitation prior to the issue of proceedings. Despite several further suggestions to mediate, the defendants maintained their refusal even in the teeth of judicial recommendation to mediate at a case management conference eight months before trial. They asserted that the parties were too far apart for it to be appropriate. Indeed, in responding to one invitation, the defendants reportedly went so far as to acknowledge being aware of the penalties that might be imposed for unreasonable refusal, but said:

“[W]e are confident that in a matter in which our clients are extremely confident of their position and do not consider that there is any realistic prospect that your client will succeed, the rejection is entirely reasonable.”

The claim was based on a dispute over whether a binding agreement had been reached about the sale of shares, largely dependent on factual issues revolving around oral and documentary evidence. The judge regarded the case as eminently suitable for mediation...

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By Tony Allen 

Tony Allen is a Solicitor, Direct Mediator and Senior Consultant for The Centre for Effective Dispute Resolution (CEDR).