Landmark alternative dispute resolution ruling signals new era for costs disputes 

Future failure to comply with ADR mandates could lead to sanctions 

Former Conservative MP Charlie Elphicke and Times Newspapers have been ordered to engage in alternative dispute resolution (ADR) over a legal costs dispute before court proceedings can continue.  

The decision, hailed as a landmark by the Association of Costs Lawyers (ACL), could set a precedent for the insurance and personal injury sectors, where ADR has increasingly become a valuable tool for cost management and dispute resolution. 

Delivered by King’s Bench Master Victoria McCloud in her final ruling before retirement, the decision is emblematic of the growing judicial push towards ADR as a means to relieve pressure on the UK court system.  

Importantly, professionals in insurance and personal injury law may see this as a harbinger of similar requirements for cost disputes related to negligence and claims settlements.  

Failure to comply with ADR mandates could lead to sanctions, a message that resonates strongly with claims professionals who face lengthy and expensive disputes. 

Details of Charles Elphicke v Times Media Ltd 

Elphicke’s libel claim against Times Media Ltd concerned articles alleging he was under investigation for sexual assault, a case that was eventually discontinued. Despite the withdrawal, he sought to avoid the usual costs awarded to the opposing party when a case is dropped. Master McCloud ruled that breaches of court rules justified a 20% reduction in Times Media’s costs, but the exact amount remains to be determined through a detailed assessment by a costs judge. 

The ruling highlights recent changes to judicial guidelines, allowing courts to mandate ADR where appropriate, a trend that is particularly relevant for insurance and personal injury disputes. Such cases often involve substantial legal costs that can quickly escalate. In many instances, engaging in ADR -such as mediation – can offer a faster, less costly alternative to full court hearings. 

A future with ADR as ‘the norm’ 

Master McCloud noted that ADR should become “the norm” for cases involving detailed cost assessments, a development that could transform how cost disputes are handled across various sectors. Her judgment emphasized that pre-assessment ADR could prevent the costly and time-consuming court proceedings that claims professionals are keen to avoid. The ruling also underscores the role of Costs Lawyers, whose expertise could be vital in navigating the complexities of ADR in claims and cost assessments. 

ACL chair Jack Ridgway praised the decision: 

“Dr Victoria McCloud has long been at the forefront of the push to consider ADR and her farewell ruling could well set a new standard for costs disputes. They are often amenable to mediation and other forms of ADR but, as has been the case across all kinds of disputes, there has hitherto been reticence to try it. The courts may soon give parties no choice. 

“I also welcome her recognition that the involvement of Costs Lawyers, with our experience and skills, is crucial to making ADR work.” 

Can ADR ease pressure on the UK court system? 

With the congestion of UK courts an ongoing concern, the ruling aligns with efforts to streamline case management and reduce delays. Insurance and personal injury professionals, frequently dealing with high-stakes claims and prolonged disputes, may need to prepare for ADR to become a default step in cost dispute resolution. 

This shift could provide a more pragmatic approach to dispute resolution, ultimately leading to greater efficiency in claims processing and cost management. 

Image: © mediaphotos via Canva

Josie Geistfeld Josie is an editor for Claims Media. She welcomes feedback, comments, and opinion at josie.geistfeld@barkerbrooks.co.uk