MJS Projects: Mediation Refusal and Expert Costs [2026]

Detailed Assessment — 2026-04-15

In MJS Projects v RPS [2026] EWHC 884 (TCC), the court held that the successful defendant’s reasoned refusal to mediate was not an unreasonable failure to engage in ADR. Serious problems with the claimant’s expert evidence did not cross the high threshold for indemnity costs, and standard basis costs were ordered.

Overview

Date: 15 April 2026

Judge: Her Honour Judge Kelly, sitting as a Judge of the High Court

Court: Technology and Construction Court, Business and Property Courts in Leeds

Citation: [2026] EWHC 884 (TCC)

Nature of Proceedings: Costs judgment following dismissal of a professional negligence claim concerning a container park near Felixstowe Port

Key Issues:

Whether the successful defendant unreasonably refused mediation
Whether a late development in the defendant's expert evidence justified a costs sanction
Whether serious shortcomings in the claimant's expert evidence took the case outside the norm for indemnity costs
The proper payment on account by reference to an approved costs budget

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The Decision

MJS Projects (March) Ltd v RPS Consulting Services Ltd, reported as [2026] EWHC 884 (TCC), shows why a refusal to mediate must be assessed in the full context of the parties' conduct. The defendant declined several mediation proposals but did not refuse alternative dispute resolution as a whole. It repeatedly sought the expert material needed to understand the claimant's case, proposed other settlement discussions and made offers.

The claimant's professional negligence claim had been dismissed in a substantive judgment reported as [2025] EWHC 831 (TCC). It accepted that costs would normally follow the event but argued for no order as to costs because the defendant had refused mediation and its expert had altered aspects of his evidence shortly before trial.

The defendant sought its costs in the usual way and argued that the expert phase should be assessed on the indemnity basis. It relied on extensive criticism of the claimant's expert and the alleged failure of the claimant's legal team to identify the deficiencies.

HHJ Kelly ordered the claimant to pay the defendant's costs on the standard basis throughout. She found neither an unreasonable refusal to mediate nor conduct crossing the high threshold for indemnity costs. The defendant received £309,673.80 plus interest at 4 per cent on account.

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Key Holdings

1. Declining mediation was not unreasonable in context

The claimant had proposed mediation before and during the proceedings. The defendant did not accept those proposals, but it consistently explained that the technical expert issues had to be understood first.

The defendant had raised detailed workmanship and causation points years before trial and supplied calculations requested by the claimant. The claimant then took 19 months to respond, did not address the workmanship case meaningfully and declined to provide its expert report even on a without prejudice basis.

The defendant proposed expert discussions, lawyer and expert meetings, commercial discussions and insurer contact. It also made Calderbank offers, including £200,000 about three weeks before trial. The claim was later dismissed in full.

Against that history, the defendant's wish to understand the expert case before spending up to £50,000 on mediation was reasonable. Its response was not a blanket refusal to engage in ADR.

The court accepted that professional negligence disputes can be suitable for mediation and that the parties' disagreement did not itself make settlement impossible. The relevant question was whether the conduct as a whole was unreasonable. It was not.

2. Mediation is not the only form of ADR

The judgment rejects an approach which treats mediation as the only meaningful settlement process. The defendant had participated in other forms of ADR and made offers while seeking the technical information needed for useful negotiations.

The parties had remained far apart. The claimant's late mediation proposal imposed specific conditions, including dates and the identity of the mediator, and came only weeks before trial. The claimant had also said that its own Part 36 offer was not made for negotiation and that it would not meet in the middle.

The court found that mediation did not have reasonable prospects of success while the claimant withheld its expert evidence and failed to engage with the workmanship allegations. A reasoned decision not to use one form of ADR did not justify depriving the successful defendant of its costs.

3. The defendant's late expert work caused no costs sanction

The claimant relied on the defendant's expert changing his position about a mass concrete taper and producing additional calculations shortly before trial.

The taper had never formed part of the claimant's pleaded negligence case. The defendant's expert had referred to it only as relevant if adequate compaction could not be achieved. The court ultimately accepted that adequate compaction was possible.

The additional calculations were performed to test points in the claimant's late expert evidence. HHJ Kelly regarded this as the type of final sense-checking expected in a professional negligence trial. It did not cause the claimant to abandon its case, and most costs, including brief fees, had already been incurred.

The development therefore had no material effect on the outcome or the costs incurred and did not justify a conduct penalty.

4. Serious expert failings did not justify indemnity costs

The substantive judgment had been highly critical of the claimant's expert. The judge had no confidence in him or his evidence. Among the problems were:

Failure to apply the professional negligence test correctly in practice.
Inadequate treatment of the workmanship and causation issues.
Reliance on an outdated edition of a technical publication without identifying the updated edition.
Further tests and rerunning of the finite element analysis immediately before trial without telling the parties or providing the results.
An approach which appeared more forensic and technical than the method a competent designer would use in practice.

The claimant lost because the court lacked confidence in its expert. That was more serious than the ordinary situation in which one expert is preferred over another.

The indemnity threshold nevertheless remained high. The solicitors had stated the correct legal test in their instructions, and the expert had set it out in his report. The full extent of the problem emerged during cross-examination. The compressed expert timetable also mattered.

The claimant was responsible for its expert for costs purposes, but the material available before trial did not sufficiently alert its legal team that he would give evidence in the way he did. The unsuccessful tactical choices and failure to ask further questions did not take the litigation far enough outside the norm. Costs remained on the standard basis.

5. The budget supported a 90 per cent payment on account

The defendant's approved budget was £344,082. Applying the approach in MacInnes v Gross, the court treated a 10 per cent reduction as the starting point because budgeted costs had already been assessed for reasonableness and proportionality.

The claimant sought a 20 per cent reduction because the mediation provided for in the budget had not taken place. The court refused. The budget covered ADR more broadly, other forms of ADR had occurred and any phase adjustment could be examined on detailed assessment.

The court awarded £309,673.80, representing 90 per cent of the approved budget, plus interest at 4 per cent. The payment was an interim sum pending agreement or detailed assessment, not the final recoverable amount.

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Practical Implications

For Costs Lawyers

1. Audit the whole ADR history. A list of rejected mediation invitations is incomplete without the information requested, other settlement methods proposed, offers made and the parties' negotiating positions.

2. Do not equate refusal of mediation with refusal of ADR. CPR 44.2 permits a sanction for unreasonable failure to engage in ADR. It does not make mediation the mandatory or preferred method in every case.

3. Connect conduct to costs caused. A late expert development will not justify a costs penalty if it did not change the case or generate material additional expense.

4. Distinguish expert failure from legal team misconduct. A party bears costs responsibility for its expert, but indemnity costs require circumstances outside the norm. The court will examine what warning signs the lawyers had before trial.

5. Use the approved budget as the payment starting point. A 10 per cent margin may be suitable for budgeted costs, subject to the circumstances and any identifiable work which did not occur.

For Litigation Practitioners

1. Give reasons when declining mediation. Identify the missing evidence, why it is needed and what alternative process can move settlement forward.

2. Share enough expert material for meaningful ADR. A party pressing for mediation while withholding the report central to liability may weaken any later conduct argument.

3. Supervise experts throughout, not only at report stage. Verify the governing legal test, causation dates, current technical sources, model changes and the precise scope of instructions.

4. Require disclosure of late testing. Experts should notify the legal team immediately of rerun models, new calculations and altered opinions so that the procedural consequences can be managed.

5. Keep offers commercially realistic. The defendant's £200,000 offer, followed by complete dismissal of the claim, supported the reasonableness of its settlement conduct.

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Conclusion

MJS Projects v RPS confirms that mediation conduct is fact-sensitive. The defendant declined mediation, but it did so for explained reasons while seeking the expert material required for useful negotiation, proposing other processes and making substantial offers. That was not an unreasonable failure to engage in ADR.

The claimant's expert evidence failed badly at trial, but the indemnity threshold was not crossed. The solicitors had given the correct legal test, the problems became clear largely during cross-examination and the expert timetable had been compressed. The defendant therefore recovered standard basis costs throughout.

The payment on account followed the approved budget. A 10 per cent margin produced £309,673.80 plus 4 per cent interest, leaving any further phase adjustments to detailed assessment.

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Citation: MJS Projects (March) Limited v RPS Consulting Services Limited [2026] EWHC 884 (TCC)

Full judgment available at: The National Archives

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