The boomerang effect

Mediation has become a well established part of dispute resolution, and there exists a pool of able mediators who can be called upon. Mediation’s relationship with the courts has also settled down. We know that the courts will not make orders obliging parties to mediate, or telling them how to conduct their mediation if they agree to have one. A court’s role is to encourage rather than compel, the thinking being that compulsion could amount to a violation of article 6 of the European Convention on Human Rights.

So how does a court go about “encouraging” the parties to mediate? Once the parties have agreed to mediate, the only steps the court can take are to put the court action on hold and inform the parties where they can find a mediator. Nothing more than that. Is this a good thing or not?

In the case of Aird vs Prime Meridian, the claimant sued his architect for negligence.

At some point during the pleadings stage the parties agreed to mediate their differences, so an order staying proceedings for alternative dispute resolution was made.

Then, with the imminent mediation in mind, the judge made an order for the parties’ architectural experts “to meet without prejudice and prepare a statement of the issues upon which they are agreed and those upon which they are not agreed, with a brief statement of the reasons for the disagreement”. The parties considered (and the judge agreed) that it would be helpful to the mediation to have the experts’ input before mediation started. “Without prejudice” meetings then took place and a signed experts statement was lodged with the court. By this time the label “without prejudice” (which had appeared on the drafts) was removed from the statement.

The mediation did not succeed, so the parties resumed court proceedings. At this point, the defendant argued it was entitled to use the experts’ joint statement. But the claimant refused to agree to this, claiming it was a document created for the purpose of the mediation and as such was a privileged document. The mediation agreement bound the parties to “keep confidential all information, whether oral or written or otherwise produced for or at the mediation”.

The Technology and Construction Court judge, before whom the issue came for decision, agreed with the claimant. The statement was privileged.

Is it a contradiction to say that the court cannot order a mediation to take place but can give orders to assist the process once the parties have agreed to mediate?

The defendant raised the stakes and went to the Court of Appeal, which would have none of this. The order had to be construed objectively, the court said, not by reference to what the judge or claimant thought it meant. Looked at this way, it was an order under rule 35.12(3) of the Civil Procedure Rules for an expert’s statement to be filed in court.

The result was that the statement was not privileged and could be relied on in the proceedings. It was no more privileged than the pleadings.

The reasoning of the Court of Appeal should not blind us to the reality that the court was trying to help the mediation but lacked the power to do so. There is simply no power to order an expert’s statement to be produced for a mediation that will be, and remain, privileged.

Presumably, all would have been well if the parties’ agreement to the experts’ meeting and preparing a joint statement had been embodied in a consent order and not made under rule 35. But a consent order is just that: without agreement it cannot be made.

Why should the powers of the courts not extend to requiring documents to be prepared for a mediation that would be privileged from the outset? Is it a contradiction to say that the court cannot order a mediation to take place but can give orders to assist the process once the parties have agreed to mediate?

Practitioners know how important it is to set up mediations properly. There has to be some disclosure and it is frequently essential to have expert input beforehand. The courts have long had powers they exercise in support of arbitration, so we need similar court powers to support mediation.

This case is a cautionary tale of the court doing its best to assist and being rebuffed for trying. The rules committee should take a look at this as soon as possible.