[2025] UKUT 00300 (LC)

A case management hearing took place in March 2024, following which directions were given, with the substantive hearing listed for 19 and 20 September 2024. The parties jointly requested a stay to enable them to pursue Alternative Dispute Resolution, and by an Order dated 30 May 2024, the claim was stayed for two months, and the hearing re-listed for 20and 21 November 2024. It appears that the parties remained in negotiations until a few months before the eventual hearing in June 2025.

Various communications took place over the course of summer 2024. Some of this included the Tribunal being copied into correspondence between the parties, including reference to without prejudice material; this was filtered out by the Registrar, and I did not have sight of it.

On 8 November 2024, with the hearing a matter of weeks away, the Tribunal received a joint application from the parties to stay the claim until 30 November, vacating the hearing scheduled for 20 November, and relisting it for the first available date from 1 December 2024.

On several occasions during these exchanges Mr Nelson referred to his understanding of the Tribunal Member’s comments at the March 2024 case management hearing, which he explained he understood to be an assurance that he would not financially be worse off from proceeding. On 13 January 2025, I directed that an email be sent the parties, the full text of which was:

“The Tribunal notes that in the parties' joint application for a stay dated 7 November 2024, it was indicated that terms to settle the claim had been agreed.

The claimant's email of 29 November indicated that the respondent had not provided 'a satisfactory undertaking for our legal representatives costs to be covered', which he said was 'against the directions of the tribunal which clearly stated that “we are supposed to be in no worse financial position after the grant of the wayleave”’, and that the hearing should be reinstated.

Costs are usually dealt with by the Tribunal in two parts. Costs incurred before the reference was made to the Tribunal are treated as part of the compensation which a person is entitled to if they have suffered a loss for which compensation is payable. Costs incurred in making the reference and after it has been commenced are dealt with at the end of the proceedings, when the unsuccessful party is usually ordered to pay the costs of the successful party, to the extent that they were reasonable incurred and were reasonable in amount. If the claimant achieves a better outcome in terms of compensation and costs than he has previously been offered by the respondent, then he will be the successful party and will be entitled to his costs of the reference. If he has previously been offered more than he eventually recovers, he will be the unsuccessful party and will have to pay the respondent’s costs incurred after the offer was made.

It is important that the claim is now not simply proceeding because the claimant is under the impression that he will be able to recover all of his costs, come what may. If he is the successful party he will be entitled to recover his reasonable costs; if he is not the successful party, he may have to pay part of the respondent’s costs. The Tribunal does not know what offers have been made in the proceedings - and it is important that it remains unaware until after the Tribunal's decision has been published.

If the parties have not reached agreement on all issues, including pre-reference costs and liability for the costs of the reference, the Tribunal will determine the remaining issues at a hearing.

The hearing of the claim shall now be rearranged, but the Tribunal is keen that the claimant is not proceeding under a misapprehension.

The parties are now directed to provide dates to avoid in March and April 2025, and a current estimate of the number of days that will be required for the hearing. Once the hearing date has been set, the Tribunal will arrange a site visit.”

Mr Nelson acknowledged receipt, commenting that “The claim would not be proceeding only on the basis of costs and we fully understand the rationale regarding costs and at which stage they come into play and the thresholds needed to qualify for costs.”

By this point SEPD’s expert, Mr Colin Smith, had retired and an application was made to replace him with a colleague. By an Order of 12 March 2025, I gave permission for Mr Smith to be replaced, with his replacement to file a report by no later than 4 April, in which the new expert was to confirm whether they agreed with the assessment of Mr Smith, and if not the extent to which they differed, in which case Mr Davies, for the Mr Nelson, could file a supplementary report in response. The hearing was relisted for 11 and 12 June 2025.

On 3 April, 24 hours before the new expert’s report was due, solicitors for SEPD made an urgent application to amend the hearing timetable. Because that application included reference to the parties’ negotiations, it was dealt with by the Deputy President, who in accordance with Rule 6(6) of the Tribunal’s Rules (of which more below), gave Mr Nelson 10 days to respond to the application.

In an email of 7 April, Mr Nelson refused to agree with SEPD’s request for additional time because the parties were continuing to negotiate, and made an application to strike out SEPD’s case. By an Order of the same day, SEPD were directed to submit a draft of its new expert report, with the application to rely on it not to be considered until after 30 April, that being the date which both parties had indicated they still intended to complete an agreement disposing of the reference by consent.

The draft report was submitted, and by an Order of 9 May, I granted permission for SEPD to rely upon it, except for a section which included new evidence that amounted to a ‘second reply’ to Mr Davies’s evidence. I refused Mr Nelson’s application to strike out SEPD’s case.

Mr Nelson made an application for permission to appeal against that Order, which I refused on 12 May 2025. He subsequently made a further application to the Court of Appeal for permission to appeal. The Court of Appeal refused permission to appeal on 6 June 2025.

The substantive hearing followed on 11 June, which resulted in the Compensation Decision of 1 July.