The Supreme Court Costs Office
No.25 of 2004
Reed Executive Plc v Reed Business Information Ltd
14 July 2004
Court of Appeal (Lords Justices Auld, Rix and Jacob)
In deciding the issue of costs in a heavy appeal, in which the substantive judgment had been handed down earlier, the court considered whether the recent decision of the Court of Appeal in Halsey v Milton Keynes General NHS Trust [2004] 3 Costs LR 393; Unreported Appeal Decision No.12 of 2004, had affected the principle enunciated in the old case of Walker v Wilsher (1889) 23 QBD 335 to the effect that without prejudice letters/negotiations cannot be taken into account in deciding costs issues. The court decided that on the proper analysis it had not done so, and therefore:
'34.I therefore conclude that the rule in Walker v Wilsher remains good law and that the court cannot order disclosure of 'without prejudice' negotiations against the wishes of one of the parties to those negotiations. This may (indeed does) mean in some cases the court when it comes to the question of costs cannot decide whether one side or the other was unreasonable in refusing mediation.
35.I do not regard such a conclusion as disastrous or damaging from the point of view of encouraging ADR. Far from it. Everyone knows the Calderbank Rules. It is open to either side to make open or calderbank offers of ADR. These days there is no shame or sign of weakness in so doing. The opposite party can respond to such matters, either openly or in calderbank form. If it does so and gives good reason(s) why it thinks ADR will not serve a useful purpose, then that is one thing. If it fails to do so, then that is a matter the court may consider relevant (not decisive, of course) in exercising its discretion as to costs. The reasonableness or otherwise of going to ADR may be fairly and squarely debated between the parties and under the calderbank procedure made available to the court but only when it comes to consider costs.'