1 Refusal to mediate. 2 Indemnity costs

Societe Internationale de Telecommunications Aeronautiques Sc v The Wyatt Company (UK) Ltd and others. Maxwell Batley Part 20 Defendant (Ch [2002] EWHC/2401 14 November)

Refusal to mediate

SITA brought a multi-million dollar claim against Watson Wyatt which was settled after mediation for $35m. Watson Wyatt claimed a contribution from Maxwell Batley under CPR Part 20 in proceedings which they comprehensively lost. Watson Wyatt resisted an order that they should pay the whole of Maxwell Batley’s costs on the grounds that Maxwell Batley had refused to participate in their mediation with SITA, relying upon CPR rule 44.3(5)(a) (the relevance of the conduct of the parties to costs orders) and the decisions in Dunnett v Railtrack plc [2002] WLR 2434 CA (21/ LL p58) and Hurst v Leeming [2002] LI R (PN) 508. The judge (Park J) refused to deprive Maxwell Batley of any of their costs because of their refusal to mediate on a number of grounds. First, the only reason why Watson Wyatt wanted Maxwell Batley to take part in the mediation was so that pressure could be brought on them to make a large contribution to whatever SITA was willing to accept from Watson Wyatt. Second, the purpose of the invitation to mediate was not with a view to resolving the liability of Maxwell Batley without litigation: there was no suggestion that, with influence by the mediator, Watson Wyatt might not pursue their claim against Maxwell Batley. Third, Watson Wyatt had tried to browbeat and bully Maxwell Batley into the mediation in a manner which the judge found disagreeable and off-putting, they had even suggested that Maxwell Batley’s solicitors’ reputation would suffer as a result of the way in which they were conducting the claim. Finally, Watson Wyatt told Maxwell Batley that the mediator had told them that they could get $10m from Maxwell Batley and that he was ‘motoring’ against them. The judge found that an astonishing way of trying to persuade Maxwell Batley to join the mediation. The invitation, or rather demands, of Watson Wyatt to Maxwell Batley to participate in the mediation had been self-serving and it would be a grave injustice to Maxwell Batley to deprive them on any part of their costs because they had not done so.