The High Court has provided a warning to practitioners about the importance of pursuing negotiations in false imprisonment claims. The case of Moradi v The Home Office [2022] EWHC 3125 (KB) also concerns the timings of those negotiations. The judge took the opportunity to express his concerns that the parties failed to reach a settlement until 5 pm on the day before the trial was due to start:

Of course, all Courts welcome all settlements. But some settlements are more welcome than others. This particular settlement, at the last possible moment, effectively wasted two days of valuable Court time which could not be used for other work. It also did not even resolve proceedings as it left costs wide open – and the parties were miles apart in written submissions on 14th November.

Ms Moradi is a German national. She was convicted and imprisoned in the UK in 2017 for an immigration offence and was made subject to a notice of intention to deport. She was released part way through her sentence and returned to Germany. But when she returned to the UK in May 2018 to pursue her appeal against deportation, she was detained again by the Home Office. Her appeal was allowed. In July 2018 she was transferred to the custody of the Ministry of Justice. She was released in October 2018 after a total of 46 days’ imprisonment. Thereafter Ms Moradi brought a claim for false imprisonment against the Home Office and the Ministry of Justice.

The claim against the Ministry of Justice settled but the claim against the Home Office proceeded. Ms Moradi ignored a Part 36 offer to settle for £10,000 made 10 months before trial and did not make any serious attempts to progress settlement negotiations until right before the trial was due to begin. The claimant won £5,000 more than the earlier Part 36 offer, but because she accepted the eventual offer less than 21 days before the trial was due to start, she was not automatically entitled to her costs.

The judge concluded that the unrealistic strategy adopted by the claimant demanded a reduction of her costs that was significant rather than token. He ruled that:

I reject both parties’ submissions and see no reason to alter my provisional view. Of course mediation requires co-operation from both sides as the Claimant says, but the fact remains that the Defendant made an offer of £10,000 and the Claimant then did not make an offer for several months, settled for a low value with the MoJ (who had refused to mediate), then made an offer of £40,000 to the Defendant: four times its offer and nearly three times what the Claimant eventually accepted. Any development in the Defendant’s argument was one of the risks of litigation: if that changed the landscape of the case, the Claimant could have argued that the Defendant should not be permitted to take the point. She did not and settled for £15,000. Overall, that reveals the Claimant’s settlement strategy with the Defendant until then had been completely unrealistic and I find conduct which justifies a significant not token reduction. As for the effect of the statutory charge on the Claimant’s damages, bluntly that is something the Claimant should have been advised about before pursuing an unrealistic settlement strategy. Therefore, a reduction is justified and one markedly more significant than 10%. However, 50% would be too great a reduction in the circumstances, especially as the Claimant did belatedly settle at a reasonable level. The fair, reasonable and proportionate reduction remains in my judgement 33%.

The judge’s decision is likely to have a significant impact on the amount of damages eventually received by the Ms Moradi. The statutory charge allows the Legal Aid Agency to recover the costs of funding the claim from the claimant where she does not obtain 100% of her costs. The charge is there so that legally aided individuals contribute towards the cost of funding their cases where they are able, and deter them from running up unreasonable costs by giving them a financial interest in how much money is being spent. The judge noted that during the period in which negotiations stalled, an additional £70,000 of costs were expended on both sides, and it seems that he felt this had to be reflected in the final costs order.