MJS Projects (March) Limited v RPS Consulting Services Limited

Summary

This was the costs decision after the claimant's design and construction claim was dismissed following trial. The unsuccessful claimant accepted that costs would usually follow the event, but argued for no order as to costs because of the defendant's conduct, namely its refusal to mediate and a late change in its expert's evidence.

The defendant said there was no reason to depart from the usual order and, going further, sought indemnity costs for the expert evidence phase, criticising the claimant's expert and the way that evidence had been run.

Her Honour Judge Kelly made the usual order, so the claimant pays the defendant's costs. The refusal to mediate was not unreasonable and the change in expert evidence had no material bearing on the outcome. She refused indemnity costs and ordered a payment on account of £309,673.80 with interest.

Background and facts

The claim concerned the design and construction of a container park near Felixstowe. It was dismissed at trial, in the judgment reported at [2025] EWHC 831 (TCC). The dispute had turned largely on the competing views of the parties' experts on whether the design was negligent, including whether adequate compaction could be achieved under a particular joint.

Before proceedings, the claimant had proposed mediation. The defendant had raised workmanship and causation issues, asked to understand the claimant's expert case, and did not agree to mediate before that material was provided, while proposing other forms of ADR and making settlement offers, including a final offer of £200,000 about three weeks before trial.

The issue

The court had to decide whether the defendant's conduct justified departing from the general rule that the unsuccessful party pays the successful party's costs, whether either the refusal to mediate or the change in expert evidence warranted no order as to costs, and whether the defendant should have indemnity costs for the expert phase.

The decision

Her Honour Judge Kelly applied the general rule. She held that the defendant's refusal to mediate was not unreasonable, applying the approach in Halsey v Milton Keynes General NHS Trust [2004] 1 WLR 3002 and Northrop Grumman Mission Systems Europe Ltd v BAE Systems (Al Diriyah C4I) Ltd [2014] EWHC 2955 (TCC). The defendant had engaged, provided calculations and made offers, and was entitled to understand the claimant's expert case, which the claimant had not disclosed, before mediating:

"the appropriate order in this case is the usual order and so the Claimant shall pay the costs of the Defendant, to be the subject of a detailed assessment if not agreed."Her Honour Judge Kelly, paragraph 44

Even had mediation taken place, it would not have had reasonable prospects of success while the claimant had not engaged with the workmanship allegations or disclosed its expert evidence. The late change in the defendant's expert evidence, on the need for a mass concrete taper, did not bear materially on the outcome, because that point had never been part of the claimant's case on negligence.

The judge refused indemnity costs. Applying the test of whether the case was out of the norm, from Excelsior Commercial and Industrial Holdings Ltd v Salisbury Hamer Aspden and Johnson [2002] EWCA Civ 879, she held that even the claimant's tactics and its expert's conduct did not meet it:

"I do not find in the circumstances of this case that the conduct of the Claimant's lawyers was such that the action was conducted, or the circumstances were such, that it was out of the norm in a way which justifies an order for indemnity costs."Her Honour Judge Kelly, paragraph 84

On a payment on account, applying MacInnes v Gross [2017] 4 WLR 49, she took the approved budget and reduced it by 10 per cent, declining the claimant's request for a larger reduction because mediation had not taken place, since other ADR had. She ordered an interim payment of £309,673.80 with interest at 4 per cent.

Practical implications

Refusing to mediate is not automatically unreasonable. A party that has engaged with the issues, sought to understand the case against it and made settlement offers may reasonably decline to mediate until it has the other side's expert evidence. The court looks at the whole chronology, not the bare fact of a refusal.

A party seeking to punish a refusal to mediate must show it was unreasonable and might have succeeded. Where the party pressing for mediation has not disclosed its expert evidence or engaged with the key allegations, the court may find mediation would have had no reasonable prospect of success, so the refusal carries no costs penalty.

Indemnity costs need conduct out of the norm. Criticism of an opponent's expert, even a finding that the expert went off on a frolic of his own before trial, will not by itself justify indemnity costs. The conduct of the action or the circumstances must be out of the norm, a demanding threshold.

Payments on account start from the approved budget with a modest discount. The court will usually take the approved costs budget, apply a reduction of around 10 per cent, and order that sum on account, rather than working through individual phases, leaving finer adjustments to detailed assessment.

MJS Projects (March) Limited v RPS Consulting Services Limited [2026] EWHC 884 (TCC), Technology and Construction Court, Her Honour Judge Kelly sitting as a Judge of the High Court. Judgment handed down 15 April 2026. Substantive judgment: [2025] EWHC 831 (TCC).