Savings Advice Limited and Zinc Consumer Limited v EDF Energy Customers Plc [2017] EWHC B1 (Costs), Judgment 17 January 2017

Costs information in the form of statements of facts can be separated out from other documents or information produced without prejudice and for the purposes of a mediation or negotiating a settlement. That factual information can be relied on in subsequent costs assessments.

Savings Advice Limited (SAL) and Zinc Consumer Limited (Zinc) brought a claim against EDF seeking damages totalling £1,063,372.90.  The claim settled after both claimants accepted EDF’s Part 36 offer.  The claimants’ costs were agreed save for ATE premiums totalling £255,963.88 which remained in dispute.

During the proceedings, and unsuccessful mediation had took place, prior to which there were exchanges of costs information on a “without prejudice save as to costs” basis.  The mediation agreement provided that documents brought into existence for the purpose of the mediation should be subject to without prejudice or negotiation privilege, and as such inadmissible as evidence in any litigation or arbitration connected to the dispute.

The ATE provider’s premium was to be calculated on the basis of the opponent’s costs (the amount the opponent would have sought had it succeeded).  In the event of the opponent refusing to provide such details, the ATE provider would calculate the premium by making a best approximation of the opponent’s likely costs.

The losing defendant’s solicitor declined to provide details of his client’s costs, instead offering only details of costs that he and his cost draftsman felt might have been recovered inter partes (about £108,000 in total).  The ATE provider therefore went on to make a best approximation of the defendant’s likely spend taking into account cost figures that had been provided for the mediation, details of past claims, and details of the claimants’ own spend. The defendant argued that the premium should be based on the figures that it had provided, also that the HTE provider was not entitled to rely on the costs figures that had been provided for the mediation.

However, Master Haworth, relying upon the judgment of Ramsey J in Farm Assist Limited v Secretary of State for the Environment, Food and Rural Affairs [2009] EWHC 1102, found that although the documents in issue were produced for the purposes of the mediation, they were purely factual.  He went on to state that where parties enter into mediation or informal negotiations for settlement of claims it is imperative that they do so in the full knowledge of their opponent’s costs and that ‘costs information in the form of statements of facts can be separated out from documents or from other information that comes into the domain of either party for the purposes of negotiating a settlement of the substantive claim’.  The ATE provider was thus entitled to rely on that information.

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