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Burchell v Bullard 2005
“A judgment of £5000 will have been procured at a cost to the parties of about £185,000. Is that not horrific?”
“The costs of ADR would have been a drop in the ocean compared with the fortune that has been spent on this litigation”.
The case
The case of Burchell v Bullard in the court of appeal focussed on the costs of an earlier case. This original dispute was between a builder, Mr Burchell, who had a contract to build an extension to the house of Mr and Mrs Bullard, and the couple themselves. He claimed around £18,000 from the Bullards, which they refused to pay on the grounds that they were unhappy with the quality of his work. A counter-claim of over £100,000, which the judge found to be greatly exaggerated, was eventually judged to be worth around £14,000, so less than £5,000 changed hands at the end of the five day hearing. The costs of the case were over £160,000.
Reasons why mediation should have been attempted
The appeal, which was heard in April 2005, focussed on who should be responsible for paying the costs of the case. When the dispute first arose, in 2001, the builder had suggested mediation as a way to resolve the dispute, but the Bullards refused, on the grounds that the case was far too complex for mediation. The appeal court judge, Lord Justice Ward, was reluctant to penalise the Bullards on costs, as their refusal to mediate pre-dated major cases such as Dunnett v Railtrack, and the Halsey judgement. However, he stated that “a small building dispute is par excellence the kind of dispute which … lends itself to ADR.” He gave a number of reasons why mediation should have been attempted:
- The defendants’ belief that their case was so watertight that they need not attempt ADR was unreasonable
- Their claim that the case was too complex for mediation was “plain nonsense”
- “The costs of ADR would have been a drop in the ocean compared with the fortune that has been spent on this litigation”
- “The defendants cannot rely on their own obstinacy to assert that mediation had no reasonable prospect of success”
The court’s stamp of approval
Despite his unwillingness to use the provisions of the civil procedure rules to fully penalise the Bullards for their unwillingness to consider mediation, Lord Justice Ward made it clear that in future, defendants “can expect little sympathy if they blithely battle on regardless of the alternatives”. He said:
“Mediation has established its importance as a track to a just result running parallel with that of the court system. Both have a proper part to play in the administration of justice. The court has given its stamp of approval to mediation and it is now the legal profession which must become fully aware of and acknowledge its value. The profession can no longer with impunity shrug aside reasonable requests to mediate. The parties cannot ignore a proper request to mediate simply because it was made before the claim was issued. With court fees escalating it may be folly to do so.”
Burchell v Bullard [2005] EWCA Civ 358
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