Declining Mediation leaves a bitter costs legacy

The RSPCA has been in the legal headlines recently in two legacy disputes.

Sadly for the Society, success has proven elusive - and defeat costly.

Trustees of charitable bodies have a duty to safeguard legacies, but should also energetically mediate and settle cases where possible, before putting their claims through the uncertainty and expense of a full trial.

In the chancery case of Gill -v- RSPCA [2009] EWHC B34 (Ch), a daughter successfully challenged her Mother's will leaving the family farm to the RSPCA.

The court's judgment on costs detailed what it found to be a half-hearted approach to settlement - and a repeated refusal to mediate - on the part of the RSPCA and ordered it to pay a substantial amount of Dr Gill's costs on the indemnity basis. The amount is not finalised but may approach £1million - all over a £2million estate.

"Indemnity Costs" means that Dr Gill will recover far more of her costs than usual for a winning litigant. The Judge said that the conduct and attitude of the RSPCA to the litigation, coupled with its rejection of Dr Gill's various offers to settle and refusal to mediate made it appropriate to make this indemnity costs order.

The RSPCA has appealed the decision - but the Judge's comments on failure to negotiate and mediate are still worth paying attention to.

The BBC report of this outcome is here: -

http:/.bbc.co.uk/2/hi/uk_england/8501020.stm

In RSPCA -v- Sharp and others [2010] EWHC 268 (Ch), where the RSPCA was arguing over the interpretation of a Will on a large estate, the Judge stated

"It is a matter of regret in my view that this action was ever brought. It clearly caused great distress to the Defendants and I cannot believe the Deceased would have been happy to see arguments by the RSPCA designed to erode the largesse in favour of his friends and relative to their benefit in this way. …………………. I know it is said that Trustees of charitable organisations are required to maximise the return for their charity but I really wonder whether the discharge of that duty required this action to be brought. ……………………….The impact of the arguments on the size of the bequest to the Deceased's brother was quite stark. This action has plainly caused distress to the Defendants and in my view ought not to have been brought."
Reportedly, the RPSCA was again ordered to pay indemnity costs to the family.

http://www.telegraph.co.uktopics/politics/lawandorder/7216771/Judge-criticises-RSPCA-for-taking-bereaved-family-to-court-over-disputed-will.html
Mediation can help charities avoid exposure to the risk of losing and paying significant opponent's costs. Dr Gill in particular was more than willing to negotiate wholeheartedly and proposed mediation twice, when attempts at negotiations between solicitors faltered.

A trained and experienced mediator is the right person to assist in negotiations relating to estates and legacies. Employing a mediator at comparatively modest cost brings an expert to the negotiating table who simply does not have the same anxieties or motives as the parties, and whose sole aim is to help drive the negotiations to a mutually acceptable settlement.

Time and time again clients say that mediation has achieved all they ever wanted - the opportunity to sit down face to face and work with the mediator and the opponent to settle the case. The usual alternative of batting offer letters to and fro is time consuming and, if it becomes protracted, often fails to really get to the heart of the problem.

If the mediation fails to conclude a settlement the parties are also far less likely to face indemnity costs orders as in these two cases - but the majority of mediated cases settle eventually even if not on the day.

Charities in particular, will do well to consider these two decisions and outcomes - and to instruct their legal teams to embrace mediation as a cost-effective and sensible way of resolving these expensive disputes.

With thanks to Philip Hesketh of Hesketh Mediation (www.heskethmediation.com) for publishing the RPSCA -v- Gill costs judgment.

by James Taylor
Solicitor & Mediator
01454 204880