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Conduct and Unreasonable Behaviour in Civil Litigation

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The general principle, and indeed the general perception in civil litigation cases is that the unsuccessful party pays the costs of the successful party - ie loser pays winner.

However, the court always retains its discretion where costs are concerned, and where a party ( claimant OR defendant ) has been seen as behaving unreasonably, then costs can be reduced or increased accordingly.

Judges may deem the following types of behaviour from a claimant or defendant as unreasonable:

  • Pulling out of a case at the last minute when there has been no change in the circumstances;
  • The pursuit of a case which is both unsupportable and speculative - ie unlikely to get the intended outcome;
  • Pressing a case which is essentially hopeless with an ulterior motive of embarrassing or inconveniencing the opposite party;
  • Causing adjournments by not turning up at a hearing without a reasonable excuse
  • Making a dishonest claim
  • Ignoring a reasonable offer to settle in advance of the hearing

Such behaviour is a matter of fact and degree, but must be quite serious to attract an order for costs. For example, the court's discretion has been exercised with regard to costs in situations where one party has refused, without having a legitimate excuse, to engage in an alternative dispute resolution process (ADR).There have been cases in which despite a party being awarded costs, that party has had the amount reduced due to their refusal to attempt to settle under mediation.

Mediation is seen as having advantages over the court process - such as providing litigants with a wider range of solutions: an apology, an explanation or the possibility of continuing an existing professional or business relationship. It is also important to note that, if a party unreasonably believes its case to be watertight, then that is no justification for refusing mediation - whilst if it can be shown that the party reasonably believed the case to be watertight, then this could be sufficient justification for refusal to mediate!!

The above can sound very complex, however what is important to bear in mind is that practitioners and clients alike must be aware that when they go down the road of suing another party, their conduct throughout the case will be noted and may be relevant to the costs awarded at the end, whatever the actual legal outcome from the litigation procedure.

By Claire Clark on 15 Apr 2013, 15:05 PM

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