The NHS Litigation Authority (NHSLA) has once more been ordered to pay indemnity costs on detailed assessment proceedings after rejecting an offer to mediate.
Late last year Irwin Mitchell claimed have won the first-ever ruling punishing a losing defendant, the NHSLA again, for rejecting an offer to mediate the costs of a dispute.
Unlike the first ruling, Reid v Buckinghamshire Healthcare NHS Trust, where indemnity costs were imposed on the period after the offer to mediate was accepted, in the latest case – again involving Irwin Mitchell – they were imposed for the entire proceedings.
Master Simons said in Bristow v The Princess Alexander Hospital NHS Trust (case no. HQ 12X02176) that the parties “should be encouraged to enter into mediation, and if they fail to do so unreasonably then there should be a sanction”.
He said it took three months for the NHSLA to reject Irwin Mitchell’s offer to mediate, made on 1 April 2015, and “they gave no good reason other than the fact that the case had already been set down for a detailed assessment”.
Master Simons said he was not satisfied that the sanction should be increasing the interest they paid because 8% interest was already a “penal rate” and the defendant “has to bear this very high rate of interest and they are being punished already by their actions because this case could have been settled by mediation”.
He concluded that the “correct sanction” on the NHSLA was that the claimant should receive costs on an indemnity basis on the 80% awarded to it.
Irwin Mitchell had only received 80% of the detailed assessment costs because its original bill had been reduced by 43% to £135,000, with Master Simons finding it was “not accurate”, and included “significant amounts which should not have been included” because they related specifically to claims against general practitioners which were later discontinued.
The NHSLA said it did not enter into the mediation “because the parties were so far apart”, the master recorded.
Irwin Mitchell partner Tom Blackburn said that despite the rulings in Reid and Bristow, the NHSLA had not changed its tactics. “We had this ruling at the beginning of November, and we’ve still not had one mediation.
“Insurers have been slow on the uptake, but have accepted mediations in some cases. They care about their bottom line.”
Mr Blackburn added that neither Reid nor Bristow had been appealed by the NHSLA.