The Court of Appeal has criticised the failure of parties to heed its “strong” encouragement to resolve their dispute by mediation.
Lord Justice Males also told judges they should ignore the agreed list of issues if it was not proving helpful.
He made the comments at the end of a ruling about the gearbox of a Ferrari 250 GTO, the world’s most expensive car. In this case, the car was sold for $44m.
The claim was for specific performance of a contract to deliver the gearbox and Males LJ described it as “regrettable that what began as a relatively simple dispute between parties who had done business together in the past and who obviously share a love of classic cars should have mushroomed” into multiple issues.
“I cannot help thinking that it would have been very much in the interests of both parties, if they were unable to resolve matters themselves, to have engaged the services of a skilled mediator at an early stage.”
He noted that, when giving permission to appeal, he observed that while the case did not fall within the Court of Appeal pilot scheme for mediation, “the parties are strongly encouraged to consider attempting to resolve their dispute by mediation”.
Counsel for both parties said they had not taken any steps to do so; the claimant said that, because of the defendant’s failure to respond to settlement offers in the past, it was not thought worthwhile to pursue it.
Males LJ said: “This is highly unsatisfactory. Strong encouragement from the court to consider mediation merits careful consideration and is not simply to be ignored or rejected out of hand.”
The judge was also critical of the list of issues agreed by the parties, which he reckoned was produced “as a result of a trawl through the pleadings, picking up every point where there was a dispute between the parties”.
That was “not in general likely to be a helpful approach”, he said, and so it proved in this case.
“Nor is it in accordance with the Circuit Commercial Court Guide, which provides at para 6.11 that ‘the list of issues is intended to be an agreed record of the principal issues of fact and law arising in the case’ and, as such, is a key document for case management purposes.
“I would emphasise the word ‘principal’. I would draw attention also to the more detailed provisions set out at para D6.1 of the Commercial Court Guide, which also make clear that ‘the list should identify the principal issues in a structured manner, such as by reference to headings or chapters. Long lists of detailed issues should be avoided, and sub-issues should be identified only when there is a specific purpose in doing so’.
“As these provisions explain, the list of issues is intended to be the servant of good case management.
“There is a danger, not altogether avoided in this case, that rigid adherence to the terms of an unduly detailed and unstructured list will obscure rather than reveal what the case is really about.”
Males LJ said judges “should not feel fettered” by the list of issues agreed at the case management conference “if, as the case develops, it becomes apparent that it is not serving its purpose”.