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Only Following Orders? Gordon Lees of Construction specialists Driver Consult looks at the process of mediation.

Mediation has been the courts chosen method of ADR since the introduction of the Civil Procedure Rules and, in keeping with that favour, the courts will seek to provide any assistance it can to the parties in order to facilitate mediation.

The actual process of mediation invariably involves an exchange of documents setting out the parties’ position in the mediation and, in some cases, these documents go further than position statements and can include expert evidence in support of a parties position statement.

The position of these documents between the parties is that they are produced on a “without prejudice privilege” basis.

The concept of without prejudice privilege arises from two principles – open discussion and implied agreement.

The principle of “open discussion” derives from public policy in encouraging the parties to any civil dispute to settle their differences without litigating to the finish and, as such, any admissions made in the mediation or, indeed, any other negotiations are inadmissible in any associated litigation on the same subject matter.
Implied agreement arises from an extension of public policy whereby the parties have agreed to carry out negotiations to settle their differences on an open discussion basis and it is implied in this agreement between the parties that one will not disclose the matters in those open discussions without the permission of the other.

Where matters prepared in, or arising out of, a mediation have been presented to the court in subsequent or concurrent litigation the courts have sought to underline the without prejudice privilege rule.

In the case of Smith Group plc –v- Weiss Mr. RC Kaye QC, sitting as a Judge of the Chancery Division, considered that the test to be applied to the admissibility of material used in mediation was whether it was fair and just to allow a party to rely on that material in the litigation.

The terms of the mediation agreement and the wider public policy led the Judge to conclude that the courts should be slow to hold that the without prejudice status of material in a mediation should be lost except in clear and unequivocal circumstances.

However, in the recent case of Robert Aird and Karen Aird –v- Prime Meridian Limited, [2006] EWHC 2338 (TCC) HH Judge Peter Coulson QC had to consider the without prejudice status of an Experts Report produced as the result of a court order for use in mediation and whether this report was admissible in a litigation.

“The principle of “open discussion” derives from public policy in encouraging the parties to any civil dispute to settle their differences without litigating to the finish…

“In this case the Judge in a litigation had stayed proceedings to allow the parties to endeavour to resolve the dispute by mediation. However, in the case management conference the Judge raised the matter of the absence of an experts report and whether the mediation would be successful in the absence of such a report.

The Judge recorded that both parties agreed to a detailed without prejudice meeting or series of meetings between the parties experts prior to the mediation.

This “agreement” was disputed by the parties. The parties subsequently discussed the matter of the experts report and the wording of an order to be given by the Judge. The parties did not agree on whether the expert report should be in the form of a joint statement under the provision of CPR and applied for directions from the Judge who gave directions accordingly. The Judges directions were in respect of a joint statement from the Experts for the purposes of the mediation.
The parties’ experts duly prepared the joint report however the claimant’s expert proceeded on the basis that the report was for the purposes of the mediation only and was reassured on this matter by the claimant’s solicitor. Further, the wording of the mediation agreement between the parties contained a “note” to the effect that: “Evidence that is otherwis

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