A costs judge has held that information about a party’s costs provided for the purposes of a mediation could be used as evidence when considering the cost consequences of a subsequent settlement: Savings Advice Limited v EDF Energy Customers Ltd  EWHC B1 (Costs).
Documents produced for the purposes of mediation are generally covered by without prejudice privilege and, subject to limited exceptions, cannot subsequently be used as evidence. In the present case the costs information was provided in emails headed “without prejudice save as to costs”, so it is perhaps not surprising that the costs judge concluded it could be used as evidence in subsequent cost proceedings.
A new precedent?
However, other aspects of the reasoning for the decision are more surprising and arguably not supported by existing authorities regarding the without prejudice rule. In particular, the costs judge held that the costs information was not in any event covered by the privilege because it was a statement of pure fact rather than an admission or concession.
Such distinction has been rejected in previous cases on the basis that requiring parties to a negotiation to constantly analyse whether they are making admissions or factual statements would undermine the privilege’s purpose of enabling parties to speak freely in settlement negotiations (see for example the decision of the House of Lords in Ofulue v Bossert  UKHL16, considered here).
While the decision will not necessarily be followed in future cases, it serves as a reminder that parties should be aware of the limitations of without prejudice privilege and the circumstances in which information provided during mediation may be used in subsequent litigation. As a practice point, parties should ensure that they are clear as to what is intended when they provide or receive information ‘without prejudice save as to costs’ in the context of a mediation.
Written by Gary Horlock and Jan O’Neill.
This is an adapted summary version of the original article, for the full version please click here.
Gary Horlock is an associate and Jan O’Neill is a professional support lawyer, both are in Herbert Smith Freehill’s dispute resolution team in London.