As well as providing a reminder that mediation must be given proper consideration, the court has also recently provided a reminder that not all documents or evidence produced for the purposes of a mediation will automatically be protected by the without prejudice nature of the mediation process.
Generally, documents produced for the purposes of mediation are covered by without prejudice privilege which means that they cannot be referred to or used as evidence outside the mediation process unless the parties (who own the without prejudice privilege jointly) both/ all agree to waive the privilege. The reasoning behind this is to enable parties to speak freely in order to make admissions or concessions in an attempt to achieve settlement, in the knowledge that such admissions or concessions cannot be used against them subsequently if settlement is not achieved.
This general position is subject to certain limited exceptions, such as where there is a dispute as to whether a settlement has been achieved or not.
The mediation agreement will generally also contain confidentiality provisions whereby the parties agree not to disclose or use documents or material produced for the purposes of the mediation for any other purpose.
However, in the recent case of Savings Advice Ltd and another v EDF Energy Customers PLC, the court held that information about the level of the defendant's costs, produced for the purposes of the mediation, could subsequently be used as evidence of those costs. A settlement had been achieved some months after the unsuccessful mediation, resulting in a detailed assessment of the claimant's costs. The claimant attempted to use the defendant's costs information in the detailed assessment to calculate an after the event insurance policy premium based on them and which the defendant was liable to pay. The defendant objected.
The court took the view that, despite the without prejudice nature of the mediation and the confidentiality provisions contained in the mediation agreement, the information on costs was admissible evidence in the costs proceedings. This was because:
- The statement as to the level of costs was a statement of pure fact, not an admission or concession, and not therefore covered by without prejudice privilege.
- In any event, the relevant communications were in fact marked "without prejudice save as to costs" and not just "without prejudice" illustrating their admissibility in relation to the issue of costs.
- The whole purpose of the mediation was to achieve a settlement and any costs information given in mediation is and must be admissible in order to work out the consequence of any subsequent settlement.
So, how can you retain the privilege and confidentiality in information?
The courts have tended to regard without prejudice privilege as covering the entirety of communications made for the purpose of attempting to settle a dispute and not only admissions or concessions.
This is therefore a surprising, possibly unhelpful, decision. Future cases will no doubt seek to argue that it is dependant strictly upon its own facts: that the claimant's funding agreement relied on the level of the actual costs risk (i.e. the amount of the defendant's costs).
It is true that, on this case, to make such narrow distinctions between privilege and confidence, and forcing subsequent disclosure, could undermine the underlying objective of the privilege: encouraging parties to speak freely in order to achieve settlement. If that were not the case (being able to rely on privilege to protect free speaking), parties would have to carefully consider every statement made or document disclosed in the process to determine whether a concession was present. Such an approach, prudent as it may be, would surely stifle the process. This judgment does therefore seem to be an anomaly on the 'pure fact' point, but it does serve as a reminder of the limitations that can be placed on the privilege.
Parties who wish to retain the privilege and/or confidentiality in information or documentation, both at and subsequent to the mediation, potentially now need to make that ever more clear when providing the information, even more so than they did before. To assist on that:
- Do not mark the communication 'without prejudice save as to costs', but instead simply 'without prejudice' - that way the carve-out applied in this judgment cannot apply.
- Consider providing an element of concession (for the purposes of achieving settlement only), even in relation to costs. That could / should again prevent the communication from being seen simply as a statement of pure fact.
- Ensure, as the parties attempted to in this case, that the confidentiality provisions in the mediation agreement make it abundantly clear what is intended to be kept confidential.