ADR ruling hailed as costs breakthrough

The Association of Costs Lawyers (ACL) has welcomed a groundbreaking court ruling requiring parties to engage in alternative dispute resolution (ADR) before disputes over legal costs are heard. The decision, made by King’s Bench Master Victoria McCloud, marks a pivotal moment in how legal costs disputes may be handled in the future.

In her final ruling before retiring, Master McCloud ordered that former Conservative MP Charlie Elphicke and Times Media Ltd must attempt ADR before their argument over legal costs can proceed. The case stems from Mr. Elphicke’s discontinued libel claim against The Sunday Times over articles published in 2018 regarding allegations of sexual assault. Elphicke later served a two-year prison sentence following his conviction for sexually assaulting two women.

Master McCloud ruled that the media company was entitled to have 80% of its costs covered, noting that the amount would be determined by a costs judge through a ‘detailed assessment.’ Crucially, she emphasised the importance of ADR in such lengthy and expensive proceedings, saying it would be "remiss" not to order ADR before the costs assessment began. Should either party fail to engage in ADR, they will need to justify their stance to the court or risk sanctions.

The ruling reflects recent changes to court rules and judgments that strengthen the courts' ability to direct ADR, as confirmed by the Court of Appeal last year. According to Master McCloud, ADR can often resolve disputes more efficiently than formal hearings, which could take several days and cost as much as a trial. She expressed hope that mandatory ADR orders would become standard practice for costs assessments, as they could help alleviate the strain on the court system.

ACL Chair Jack Ridgway praised the decision, highlighting Dr. McCloud’s long-standing advocacy for ADR. He also noted the growing role that Costs Lawyers will play in facilitating these processes, stating: “This ruling could set a new standard for costs disputes... The involvement of Costs Lawyers, with our experience and skills, is crucial to making ADR work.”

As the legal profession grapples with congested courts and increasing legal costs, this ruling could pave the way for more widespread use of ADR in similar cases, reducing the time and resources spent on drawn-out legal proceedings.