The Claimant was successful, but when the question of costs came to be determined, the Defendants argued that Wethered should not be entitled to its costs because it had refused to mediate the claim until after proceedings had been commenced. Following Halsey, the key question was whether the unsuccessful party could show that Wethered had acted unreasonably in refusing to mediate.
Here the Judge found that Wethered had acted reasonably in refusing to mediate. He described the conduct of the Defendants as attempting to use "a lever to procure capitulation". Proceedings began in July 2004. The Claimant agreed to mediate in January 2005. The Judge accepted that in many cases it would not be reasonable to defer mediation until the litigation was at an advanced stage. For example in Birchell v Bullard (see Issue 59), reference was made to the escalation of costs when proceedings were commenced.
However, here the Judge laid stress on the particular facts of the case which involved questions of construction of an agreement against a factual matrix where there was controversy about the facts. Therefore, the Judge was sympathetic to the suggestion that the mediation would have had a greater prospects of success when the matters had been formulated and pleadings and statements had been formalised. Here it could not have been foreseen when the case started, that it would take so long to reach a stage when the evidence would be complete. Significantly, the Judge agreed with Wethered that until the defence had been set out in greater detail, the nature of the dispute was difficult to fathom.
An attempt was made to admit evidence concerning what happened in the mediation. The Judge was not prepared to allow this. Mediation is an entirely without prejudice process. The privilege of that process must be maintained unless the parties agree otherwise. There was no such consent here nor had matters been raised in Part 36 correspondence.