High Court Refuses Leave For Post Mediation Tender On Basis Of Litigation Disadvantage

The recent decision of the High Court in White Young Green Environmental (Ireland) Limited v Anne Gethings [2015] IEHC 498 has raised new issues when advising clients on when to make an offer of tender of payment at a late stage in the proceedings and in particular post mediation.

Background

The case was set down for trial in April 2015 however on the second day of the trial, following the urging of the Court, the parties adjourned proceedings to engage in mediation and the proceedings were stayed as a result. The mediation was unsuccessful and a new trial date was set for January 2016. The plaintiff subsequently made an application pursuant to Order 22 Rule 1(1) of the Rules of the Superior Courts seeking leave of the Court to make an offer of tender of payment to the defendant in relation to the defendant's counterclaim. The plaintiff submitted that nothing was revealed or said during the mediation process that would result in prejudice to the defendant's case but acknowledged the potential litigation disadvantage to the defendant. The defendant argued that although no specific prejudice would occur to the defendant's case if leave was granted, as a result of the mediation the plaintiff gained unique insight into the defendant's thinking and strategy in relation to the proceedings. Additionally the defendant submitted that its expert reports were made available to the plaintiff during the mediation process.

Decision

The Court (Binchy J) acknowledged that it will generally accede to applications for a late tender offer unless by doing so a prejudice is caused to the plaintiff (or in this case to the counter-claimant) or it is unfair to grant the application. The Court noted the public policy consideration in bringing litigation to a swift and economic conclusion as a determining factor. However, the Court ultimately decided it would be unfair to allow the application in this case for two reasons:

The conduct of the mediation gave the plaintiff a litigation advantage(1) into the defendant's thinking in relation to the proceedings. A meaningful mediation explores legal, personal and financial issues and it seems very likely that following mediation each party will have a significantly better understanding of the attitude to the proceedings of the other party, putting the defendant in a better position to make a tender offer. The litigation advantage gained by means of mediation undermines the public policy objective behind mediation, which...