Why did the judge in the legal claim against Clydesdale Bank being brought by hundreds of businesses for the alleged mis-selling of loans, urge the parties at the case management conference to settle the claim to avoid a “huge set-piece trial”? 

The case management conference (CMC) comes after the parties have set out their respective legal positions regarding the claim. It is where the judge decides what evidential steps are needed to get the case ready for trial. It is also where the judge will check that the parties have considered settlement – the courts would much rather parties settle than go to trial as this saves time and money for both the parties and the courts, as well as providing a mutually satisfactory and certain conclusion to the dispute. This is why at the CMC the judge will want to know what steps the parties have taken to try to settle their case, whether by discussion or negotiation or by a more formal process such as mediation (where an independent third party seeks to help negotiate a settlement). The judge will not be told of the details of settlement attempts, just whether the parties have made the attempt.

What can the judge do if any party has not made any attempt to settle the case, which appears to be the case at the moment here? Clydesdale has said that the case has “no merit” which suggests it has refused to attempt settlement because it is confident it will successfully defend the case. What the courts may do is penalise that party in costs, so at the end of trial, that party may recover less in terms of costs (or have to pay an additional amount in terms of costs) than it would otherwise have done. While there may be good reasons for delaying settlement attempts, a belief in the strength of your case, even if it is ultimately vindicated by success at trial, is unlikely to be enough to protect you from the risk of such a costs penalty, as was shown in the case in Wales (t/a Selective Investment Services) v CBRE Managed Services Ltd and another [2020] EWHC 1050 (Comm).