The Court of Appeal's decision in Dunnett v
Railtrack plc  2 All ER 850 highlighted the necessity for
lawyers and parties to consider ADR, failing which a party may be
penalised in costs (see Litigation e-bulletin - Issue No. 2). This has
been further highlighted by the judgment of Lightman J in Hurst v
Leeming  EWHC 1051.
The claimant, Mr Hurst, was a partner in a firm of solicitors which
was later dissolved. Disputes arose between Mr Hurst and his former
partners and Mr Hurst issued proceedings against them. Part way through
the trial of those proceedings, Mr Hurst instructed Mr Leeming QC
through his solicitors.
Mr Hurst lost at first instance, in the Court of Appeal and in the
House of Lords. Those unsuccessful proceedings led to his bankruptcy. Mr
Hurst blamed the failed proceedings and his consequent financial
situation on his legal advice and representation at the time he
instructed Mr Leeming. He was unable to bring proceedings against Mr
Leeming, his counsel, due to the immunity from suit for negligence in
the conduct of proceedings enjoyed by barristers at that time.
Therefore, Mr Hurst sued his solicitors, in effect as vicariously
liable for the alleged negligent conduct of the proceedings by Mr
Leeming. Mr Hurst issued these proceedings in the Chancery Division. The
action was struck out and Mr Hurst was refused permission to appeal by
the Court of Appeal. Mr Hurst then commenced fresh proceedings against
the solicitors in the Queen's Bench Division. That action was struck out
as an abuse of process.
Following the House of Lords decision in Arthur J.S. Hall &
Co. v Simons  3 WLR 543 removing counsel's immunity from suit,
Mr Hurst brought proceedings against Mr Leeming alleging negligence.
This action was dismissed by Lightman J who then had to deal with the
issue of the costs of the action. In the ordinary case Mr Leeming would
be entitled to his costs as the successful party, but Mr Hurst submitted
that no such order should be made as both prior to and after the
commencement of the proceedings, he had invited Mr Leeming to proceed to
mediation and Mr Leeming had refused.
Mr Leeming gave a number of reasons for refusing to proceed to
the legal costs already incurred in meeting the allegations and
the threat of proceedings;
the seriousness of the allegations of professional negligence;
the total lack of substance of the claims made;
the lack of any real prospect of a successful outcome to...