Congratulations to Sir Henry Brooke Chairman of Trust Mediation who collected a Lifetime Achievement Award and the Mediation Achiever of the Year Award at the 2011 Personal Injury Awards.

As one of the Trust Mediation panel mediators I am privileged to work with Sir Henry from time to time. I had the opportunity to observe him in action last year in a four defendant multi-track personal injury case which he helped the parties resolve. As with most multi-defendant actions there were mediations within the mediation which Sir Henry handled expertly.

The comedian Stewart Francis hosted the event which is incentive enough to make me pull my finger out and get nominated next year. Here’s Stewart in action:

Darren Bent v Highways and Utilities Construction 2011

This is a first for me – writing about a case where one of the parties used to be in my fantasy football team (he’s not now, Demba Ba partners Van Persie). Of course this case is not about football it’s about the far more exciting issue of determining the correct BHR (basic hire rate or “spot rate”) for a credit hire vehicle.

This judgment was delivered along with the case of Pattni v First Leicester Bus Limited. In both cases the claimants were not “impecunious” (see Lagden v O’Connor [2003] UKHL 64)

In Darren Bent v Highways Utilities Construction [2011] EWCA Civ 1384 the Court of Appeal three issues arose to be determined:

1. The correct method of calculating the BHR;
2. Whether a car should have been hired on the 7 day rate or the cheaper 28 day rate;
3. If he 28 day is preferred what discount should be applied to the 7 day rate?

The case has a very useful summary of the background law at paragraphs 29 to 41. As far as the first issue is concerned Aikens LJ who gave the judgment of the court said at para 73,

To summarise, the questions are: (i) did the claimant need to hire a replacement car at all; if so, (ii) was it reasonable, in all the circumstances, to hire the particular type of car actually hired at the rate agreed; if it was, (iii) was the claimant “impecunious”; if not (iv) has the defendant proved a difference between the credit hire rate actually paid for the car hired and what, in the same broad geographical area, would have been the BHR for the model of car actually hired and if so what is it; if so, (v) what is the difference between the credit hire rate and the BHR?

For present purposes the important point to note is that (assuming the answer to questions (i), (ii) and (iv) above is “yes” and that to (iii) is “no”) the aim of the judge’s fact finding exercise is to ascertain the BHR for the model of car that the claimant actually hired and to do so on an objective basis.

The court held the trial judge had erred in law. There was evidence available of the BHR for an Aston Martin DB9, the car Darren Bent hired whilst his Mercedes CLS 63 AMG Coupé was being repaired. The figures were £470, £500, £691 and £695. The claimant was seeking to recover £573.28. In the circumstances the appellant failed to prove that the BHR for an Aston Martin DB9 was less than £573.28.

The court accepted the appellant’s argument that the car should have been hired on a 28 day rate as it was reasonably apparent from the outset that the repairs would take a considerable time – the discount to be applied was 12%. Mr Bent was awarded 94 days hire at £504.48 plus VAT, which is a tad under 50 grand.

See the related case of Pattni v First Leicester Bus Limited.

If you have any comments on this case please add them below.

To find out more about mediating credit hire claims call me on 0845 056 3625

Pattni v First Leicester Buses Limited

The Court of Appeal has delivered its judgment in Pattni v First Leicester Buses Limited [2011] EWCA Civ 1384. The judgment also includes the case of Darren Bent v Highways and Utilities Construction. In both cases the claimants were not “impecunious” (see Lagden v O’Connor [2003] UKHL 64.

Can the claimant recover interest on the BHR in a credit hire claim?

This was the issue in the case. Aikens LJ gave the judgment and suggested that the term Basic Hire Rate (BHR) should be substituted for the more familiar term “spot rate”. The claimant had been involved in a RTA. He was entirely innocent. His car, a Porsche 911 Coupé, was damaged and needed repairing. He took out a credit hire agreement on an Audi R8. I’m no petrol head (I owned a Renault Scénic not long ago) although I do know both cars are German and quite expensive. Anyway that doesn’t matter – it was accepted that the Audi was a suitable replacement vehicle.

It was held that the claimant could recover 29 days hire at a basic hire rate of £370.50 per day for a grand total of £10,744.50. The claim had been for 40 days hire at £500 a day. The claimant wanted interest on that sum from the end of the hire period. The judge at first instance, and Swift J on appeal, said they couldn’t have it, notwithstanding the fact that the hire agreement specifically provided that the hirer would pay interest on the charges for the period.

Court of Appeal decision

The claimant advanced three arguments:

1. The claimant reasonably entered into the credit hire agreement as a direct result of the tort. The claimant’s contractual liability to pay interest  at the agreed rate was reasonably foreseeable and so is a loss which is recoverable from the defendant. It is well established by authority that a contractual liability to pay money which is incurred as a direct result of a tort constitutes a recoverable loss from the tortfeasor.
2. When the judge was assessing the damage suffered as a consequence of the defendant’s tort he should have taken into account the fact that if the claimant had hired a car in the usual way, by paying in advance, he would have lost the use of his money. Therefore the judge should have awarded both the BHR and interest on that sum as two heads of the damages recoverable for the loss of use of the claimant’s car.
3. The claimant is entitled to statutory interest pursuant to section 69 of the County Courts Act 1984 to reflect the loss of use of funds that the claimant would have incurred if he had hired a replacement car on a standard basis (ie. by paying in advance).

All three arguments were rejected and the appeal was dismissed. Of the first argument Aikens LJ said at paragraph 61,

In my view it is clear that the interest charge for which Mr Pattni is under a liability to Swift by the terms of the Agreement constitutes the cost of an “additional benefit” given to the credit hirer , viz. the benefit of delayed payment of the credit hire charges until the “Claim” against the other driver has been finalised. On the analysis of both Lord Hoffmann and Lord Hobhouse in Dimond v Lovell, this is not a recoverable loss in the case of a hirer who is not “impecunious”, in the sense described by Lord Hope in Lagden v O’Connor.

As to the second and third arguments the court held the claimant simply hadn’t suffered any loss as the interest liability was deferred to settlement of the claim.

See the related case of Darren Bent v Highways and Utilities Construction.

For information on mediating credit hire claims call me on 0845 056 3625.

If you have a comment to make on this case please add it below.

I am delighted to welcome Arlene McCarthy MEP for the North West Region as my guest blogger this week. Arlene writes:

On 13th September 2011, the Parliament adopted my report on the implementation of the Mediation Directive.  The aim of the report was to assess the impact of the 2008 Directive in the Member States, and examine how it had been implemented.

The Legal Affairs committee considered the opinion of both practitioners and users of mediation whilst compiling the report, in addition to identifying how the Directive could be improved, paying particular attention to its scope, confidentiality agreements, enforceability, incentives and the idea of mandatory mediation.

The adoption of the report signalled the European Parliament’s approval of the infringement proceedings against 9 Member States, initiated by the European Commission, who have failed to meet the 21st May 2011 implementation deadline.

It is important that the UK and all Member States conclude the implementation process as soon as possible in order to reap the financial benefits.  In the UK, litigation worth 200,000 Euros takes around 333 days to solve via the courts, and costs an average of 51,000 Euros.  In contrast, mediation would take around 87 days and cost only a fraction of the price, at roughly 9,000 Euros.

However, the time and monetary benefits of mediation are not the only important aspects that should be considered.  Whilst the 2008 Directive only relates to civil and commercial cross-border matters, it is also important to recognise the benefits that mediation can bring to family disputes – in both domestic and cross-border cases.

Mediation allows the parties involved greater control over the process, what issues are discussed and, of course, the final outcome, partly because they are far less dependant on factors such as court timetables, lawyers’ availability or cost restraints.  This can result in the preservation of a relationship, which might otherwise deteriorate due to a number of reasons associated with court cases, primarily heavy financial burdens.

By voting in favour of this report by a massive majority, the Parliament has sent a clear message to Member States:  we want governments to assist their citizens in making use of mediation systems, and establish mediation procedures to bring an end to expensive court cases.

We are now looking forward to the Commission’s legislative proposals on Alternative Dispute Resolution, the first of which is foreseen for the last quarter of the year, as well as the Commission communication on the implementation of the mediation Directive, scheduled for 2013.

I hope that my report will provide helpful input so that we can better serve our citizens with an affordable and efficient system for access to justice across the EU.

 Many thanks to Arlene. If you would like to guest blog for me drop me an email.

Following its consultation on resolving disputes in the workplace the government is “even more convinced about the role that mediation can play, as one of the forms of early dispute resolution.” In its response to the consultation the Department for Business Skills and Innovation said a substantial growth of mediation has the potential for a major and dramatic shift in the culture of employment relations.

The Benefits:

• A reduced number of employment tribunals;
• Reduced fear of tribunals amongst employers;
• Improved business confidence about job creation.

The Aims:

• Long term reform to create a new approach to resolving workplace disputes so that mediation becomes a more accepted and trusted part of the process.
• Work with the private sector as part of ‘Every Business Commits‘ to address the lack of familiarity with mediation.
• Give businesses, particularly SMEs and Micros, access to low-cost, low-risk mediation as a workplace dispute resolution tool.

The Proposals:

• Launch a major pilot with the retail industry (an early adopter of mediation) to share their mediation skills with SMEs and Micros in their supply chain in a way that improves the quality of the in-house scheme and the relationships with suppliers.
• Implement an area wide approach to developing mediation networks in particular geographical areas. Fund mediation training to selected candidates from SMEs and Micros through a regional training scheme. These new mediators will provide low-cost mediation to other organisations in their network. A regional pilot will introduce the scheme.

The government has declared it will continue to work with the mediation industry to embed mediation in the resolution of workplace disputes.

What do you think about the proposals? Add a comment below.

What’s your story?

Have you been to see a solicitor recently about a non-matrimonial legal dispute?

What advice did your solicitor give you about alternatives to going to court such as mediation? Please a comment below about your experience.

Why?

Because the government thinks not enough solicitors are complying with their professional duty to advise about alternatives to trial – see Outcome 1.12 in the new Solicitors’ Code of Conduct. This belief is reflected in the proposal to introduce mediation information sessions where court litigants have to see a mediator for information about the process before they can go to trial.

It will be interesting to see what your experience is so please comment below. Thanks.

legalweek.com has reported that the Ministry of Justice is adding another £10 million pounds into its 2012 budget for publicly funded mediation taking the total to £24 million for the year. The report says:

An MoJ spokesperson said: “Research shows that mediation can cost a quarter of the price and take a quarter of the time of going to court.

“Data from legal aid cases show the average cost per client is £535 compared to £2,823, and that the average time for a mediated case to be completed is 110 days compared to 435 days for non-mediated cases. With two thirds of publicly funded mediation already resulting in full agreement, it can ensure better results for families too.”

I wonder if some of the money is to be used funding of the expansion of the free small claims scheme for civil cases. The scheme is currently optional and has a very high success and user satisfaction rating. These factors were presumably influential on the government because it has proposed making referral to the scheme compulsory for small claims in it’s consultation paper Resolving Disputes in the County Court. Another proposal in the same report is to increase the limit for small claims (currently at £1,000 for personal injury cases and £5,000 for other civil cases).

If these two proposals are adopted then obviously the workload of the small claims mediators will go up exponentially. The scheme is fully funded by HMCS so it will need more money to deal with the new cases.

It is not clear if the government intends to expand the HMCS service to cope with the demand or employ private sector mediation providers to fill the void. It is also not known if there will be any fee charged to litigants for the service which is currently free at the point of delivery.

I will of course report as soon as the MoJ publishes its response to the consultation when we should have  better idea of how this will all pan out.

Mr Justice Ramsey has suggested that mediation could be an appropriate way to deal with minor criminal offences as well as complex white-collar crime. He spoke recently at the CIArb’s Mediation Symposium. The Law Society Gazette reported his comments:

In such cases, he [Mr Justice Ramsey] said, mediation could be used to give structure to the process where judges are asked what sentence a defendant might get if they pleaded guilty and to the bargaining by the Crown Prosecution Service over what alternative charges it might accept a plea to. He said: ‘I have a six-month fraud trial with eight defendants starting shortly. That will be a very expensive trial of white-collar crime and is precisely the sort of case that could be mediated in a system where criminal mediation was accepted.’

I’m not sure what the public appetite for plea bargaining is. The government will no doubt be looking at the suggestions as it seems to be embracing mediation as a costs saving measure for civil justice. It would be logical for them to extend it to the criminal arena.

I’m interested in the judges’ reported suggestion that mediation could take over the restorative justice process. I’m not entirely sure what is meant by that and what the people who are already pioneering restorative justice work in this country would make of it.

It’s also reported that Mr Justice Ramsey said mediation needs to assert itself as a form of dispute resolution in its own right and not be seen as “the best of a bad bunch“. The report does not expand on this comment or what it means. Mediation is currently offered as an alternative to litigation or arbitration. It tends to occur after one of those other processes have commenced. Maybe the suggestion is that it should be considered before those processes have commenced. The challenge the for the mediation community is to aim for the day when a client enters a solicitors’ office and asks the solicitor to help resolve their dispute by mediation.

Let me know what you think about mediating criminal cases by commenting below:

If you were waiting eagerly for the government’s response to the Settling Disputes in the County Court consultation paper then you’ll have to wait a while longer. It has been put back from the end of October date – no idea if the postponement is related to Mr Djanogly having his referral fee duties removed.

Anyway people have been lining up to say what a bad idea mandatory mediation would be. Lord Neuberger gave a vigorous defence of the right to resort to the courts in a speech last March. He said;

The only way the party in the right can get what he deserves, can vindicate his rights, is to go to court, and any civilized system should ensure that he is able to do so.

Mr Justice Ramsey speaking at the CIArb’s Mediation Symposium this month argued that introducing mandatory mediation would be unwise, stating that “the essence of mediation is that it should be voluntary“.

Speaking at the same event Professor Dame Hazel Genn says that the drive by the government towards mediation is diverting attention away from the cutbacks to the funding of the civil justice system. She is quoted as saying that “Mediation may be about access, but it is not about justice” and that although mediators facilitate settlement they do not provide access to justice.

Here’s what I think:

1. I agree with Lord Neuberger – without the threat of the litigation stick what’s the point of settling any claim against you?
2. Of course the government is only interested in mediation because it thinks promoting it will save them money.
3. Yes the essence of mediation is that it is voluntary.

That’s why – much though I may benefit from it financially – I am against mandatory mediation. The crazy thing about the proposals for mediation information sessions and the like is that everything is already in place – solicitors are obliged to inform clients about ADR and judges are obliged to ensure it is used where appropriate. You don’t need new schemes, you need to use the existing ones.

The Manchester Mediation Information and Assessment Pilot Scheme was born on 4th July this year. I am one of the Manchester mediators who have attended the court since then acting as “duty mediators”. Unfortunately the scheme appears to have been, in short, a failure.

What’s the Scheme for?

It was introduced following the Government’s consultation Settling Disputes in the County Court. There was a proposal to introduce a mandatory mediation information and assessment session step into civil litigation. The idea was to get the lawyers and the litigants to discuss each case with a mediator – the implication being the MoJ does not think lawyers are properly promoting the use of mediation to their clients.

No actual mediation takes place – parties just receive information about the procedure and potential for use in their particular case.

Why hasn’t it worked?

Litigants who are represented by lawyers very rarely attend court apart from for trial, that’s a bit late for mediation! So the objective – of getting information about mediation to litigants – was bound to fail.

The court tannoy announces the presence of the mediator every so often. There are posters advertising the service around the building and the DJs are well informed of the service. Despite all that the universal experience of my colleagues is of very few enquiries, usually none.

Should the proposal be scrapped?

Requiring all parties and representatives to attend court to speak to a mediator is unworkable, will add huge expense and frankly is patronising and pointless to the many lawyers who already use the full range of ADR tools to resolve cases. Lawyers already have an obligation (in the Conduct Rules) to advise clients about mediation and the courts already have all the necessary case management powers to ensure it has been properly considered. An alternative to adding new layers of procedure would be to ensure uniform use of the existing rules. That would cost money to train the judges and some method for solicitors to certify that they have provided the necessary advice. There is no money for the former and no appetite for the latter.

I’d like to hear your views – what, if anything, do you think should be done? Please comment below.