Dennett -v- Railtrack Plc – Court of Appeal – 22nd February 2002

Facts:

The Defendant's railway lines ran next to fields which the Claimant rented and used to graze horses. There was a gate leading from the field to an "accommodation" crossing and this gate was left open resulting in three horses straying on to the railway line and being killed. The Claimant commenced proceedings against Railtrack claiming negligence and damages of £9,000. The claim was rejected by the first Court, and also on appeal, but an issue did arise as to whether the Defendant should be awarded its costs (bearing in mind it had defended the claim successfully) where the Defendant had refused to participate in alternative dispute resolution on the basis that, inter alia, it was confident of success in the proceedings.

The Decision:

The Court decided there should be no order as to costs in favour of the Defendant, notwithstanding its success in the proceedings. When the application for permission to appeal came before the Court, permission had been given to appeal but at the same time the Court had urged the parties that alternative dispute resolution should be explored. The Claimant had indicated a willingness to explore alternative dispute resolution provided the Defendant was also willing to do so; but the Defendant had not been so willing. The Defendant had been confident of success in the proceedings and had, therefore, taken the view that there could be no benefit of then participating in alternative dispute resolution. However, the Court pointed out that in cases like the present one, a Claimant would, perhaps, have been satisfied with an apology and an explanation. This could have been explored in alternative dispute resolution. Both the lawyer and his client have obligations to further the overriding objectives under the Civil Procedure Rules which include Court proceedings only being used as a last resort. Accordingly, if a party refused to participate in alternative dispute resolution without good reason (and by implication the reason given in this case was not a good reason!) then that party would suffer the consequences when costs came to be awarded.

Comment:

A salutary lesson both to lawyers, other advisers and their clients. The temptation not to incur further professional fees dealing with alternative dispute resolution where one is extremely confident of success in Court proceedings should, on the basis of this case, be resisted. It is possible to see arguments either way as to whether the Court of Appeal's decision was reasonable or harsh, given the particular circumstances of this case. Whether an individual Claimant making a monetary claim would have been satisfied with an apology and an explanation is debatable but it would appear that we are now in an arena of a compulsory "nothing ventured is nothing gained" where refusal to participate in an alternative dispute resolution process could result in an adverse costs order.

This article was first published in Property Week. For further information please contact Andrew Walker at [email protected] or on 020 7367 2710