Percy v Anderson-Young [2017] EWHC 2712 (QB)

This case gives an indication of the power of mediation in bridging the gap between two parties who despite being £1.8m apart settled the case at mediation.  The case concerned a failure to settle a personal injury claim.  When it became apparent how far apart the parties were, the Claimant's solicitor took out ATE insurance with a premium of £533,000.  Pursuant to mediation, C's costs were agreed but D challenged the ATE premium.  The Court ordered D to pay the premium saying at [76]:

Finally, I should mention the position of the Defendant. It could be said that the Defendant was treated unfairly in that he was given no opportunity to settle the case (as he did at the mediation) before the additional insurance liability was incurred. Thus, having taken a reasonable approach to the claim at the mediation, he finds himself penalised by an eye-watering premium as part of the costs. However, in my judgment, any sympathy for the Defendant here would be misplaced. The Defendant chose to fight this claim bullishly, indeed arguably aggressively, and gave every indication to the Claimant that he was going to fight the case to trial behind the Part 36 offer. The Defendant chose not to settle this case until a very short time before trial – he could have made an additional Part 36 offer at any time in the years following the abortive JSM in November 2011, but chose not to. Any Defendant who settles late, particularly this late before trial, must know that he thereby significantly increases the costs risk. An experienced Defendant will know that a reasonable Claimant will probably take out additional ATE insurance, and the Notice of Funding dated 10 September 2013 will surely have come as no surprise. Furthermore, the Defendant should have anticipated that the premium would be significant.