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Reed Executive Plc & Another v Reed Business Information Limited & Others, Court of Appeal, 14 July 2004

22 July 2004
The issues

Costs – ADR – Mediation – Without Prejudice Communications

The facts

This is one of a number of proceedings between the parties concerning the use of the word “Reed”. Other proceedings extend to the trademark registry in the United Kingdom and in the European Trademark office and in at least two commonwealth jurisdictions. Following the Judge’s decision an issue arose as to costs. An issue arose as to whether the Court could following a judgment on liability and in relation to costs, compel the parties to disclose the details of without prejudice negotiations. The second issue was whether or not the Court’s Order as to costs should reflect the fact that one party was not willing to take part in an Alternative Dispute Resolution process.

Prior to the decision in Halsey v Milton Keynes the rule was that evidence of the detail of without prejudice negotiations could not be given on the question of costs and thus both sides agreed. Had Halsey changed that position? Halsey did not expressly abrigate the rule and it did not refer expressly to the rule at all. Indeed, Halsey had assumed that insofar as ADR was concerned the parties were entitled to adopt whatever position they wished within the ADR and that if as a result the dispute was not settled, that was not a matter for the Court.

In this case the Judge could think of no rational reason why party to party negotiations should not be treated on the same basis and indeed the line between third party assisted ADR and party to party negotiations might be fuzzy. The Court therefore could not order disclosure of without prejudice negotiations against the wishes of one of the parties to those negotiations. The Court moreover could not draw any adverse inference against a party which refused disclosure of without prejudice negotiations.

On the facts of the case it was entirely unreasonable to refuse ADR. The refusing party had a reasonable and as it turned out, justified belief in their prospects and had ongoing disputes and other jurisdictions to consider. Whilst an ADR process might have worked, the prospects did not look good given the wide disparity between the parties. Moreover the case was full of novel points.

The decision

It is unfortunate that some of the Court of Appeal’s reasoning in deciding what were acceptable excuses for not pursuing mediation are out of step with the guidance just given by a differently constituted Court of Appeal in Halsey.

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