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You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> Aird & Anor v Prime Meridian Ltd [2006] EWHC 2338 (TCC) (19 September 2006) URL: https://www.bailii.org/ew/cases/EWHC/TCC/2006/2338.html Cite as: [2006] BLR 494, [2006] TCLR 8, 108 Con LR 1, [2006] EWHC 2338 (TCC), [2006] CILL 2393 |
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QUEEN'S BENCH DIVISION
TECHNOLOGY & CONSTRUCTION COURT
Fetter Lane, London, EC4 |
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B e f o r e :
____________________
(1) ROBERT AIRD (2) KAREN AIRD |
Claimants |
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- and - |
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PRIME MERIDIAN LIMITED |
Defendants |
____________________
Midway House, 27/29 Cursitor Street, London EC4A 1LT.
Telephone No: 020 7405 5010. Fax No: 020 7405 5026
MR. OLIVER TICCIATI (instructed by Hill Dickinson) appeared for the Defendants
____________________
Crown Copyright ©
His Honour Judge Peter Coulson QC:
Introduction
"By 23.9.05 the parties' architectural experts (Peter Blockley for the Claimants and Frank Cleveland for the Defendants) do 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."
He also ordered that the action be stayed from 1st October 2005 to 31st November 2005 to allow the parties to mediate.
The Relevant Principles of Law
"(1) The court may, at any stage, direct a discussion between experts for the purpose of requiring the experts to:
(a) identify and discuss the experts' issues in the proceedings; and
(b) where possible, reach agreed opinion on those issues.
(2) The court may specify the issues which the experts must discuss.
(3) The court may direct that following a discussion between the experts they must prepare a statement for the court showing
(a) those issues on which they agree; and
(b) those issues on which they disagree and a summary of their reasons for disagreeing.
(4) The content of the discussion between the experts shall not be referred to at the trial unless the parties agree.
(5) Where experts reach agreement on an issue during their discussions the agreement shall not bind the parties unless the parties expressly agree to be bound by the agreement."
(a) The meetings themselves are without prejudice. The privilege that therefore attaches to the meetings is a joint privilege and its waiver requires the consent of both parties. (see Rush & Tompkins v. Greater London Council [1989] AC 1280).
(b) The statement is, in the ordinary case, not privileged. Indeed its production is ordered by the court so that it can be relied on by everyone, including the parties and the court, in any trial of the substantive issues.
(c) The parties are not automatically bound by the matters agreed by their experts, although they can agree to be so bound. However, the lack of such agreement does not make the statement privileged: (see Robin Ellis Ltd. v. Malwright Ltd. [1999] BLR 81.
(d) The conduct of the meetings and the content of the statement are solely for the experts themselves. Interference in this process by the parties or their lawyers may amount to a breach of the court order and lead to a refusal by the court to allow that expert's evidence to be admitted (Robin Ellis).
(a) In Rush & Tompkins Lord Griffiths said
"The without prejudice rule is a rule governing the admissibility of evidence and is founded upon the public policy of encouraging litigants to settle their differences rather than litigate to a finish …. I would therefore hold that as a general rule the 'without prejudice' rule renders inadmissible in any subsequent litigation connected with the same subject matter proof of any admissions made in a genuine attempt to reach a settlement. It of course goes without saying that admissions made to reach settlement with a different party within the same litigation are also inadmissible, whether or not settlement was reached with that party."
(b) In Unilever v. Proctor & Gamble [2000] 1 WLR 2436 Robert Walker LJ said:
"In those circumstances I consider that this court should in determining this appeal give effect to the principles stated in the modern cases, especially Cutts & Head [1984] 1 Ch 290, Rush & Tomkins and Muller v Linsley (30.11.94) 139 SJ LB 43. Whatever difficulties there are in a complete reconciliation of those cases they make clear that the 'without prejudice' rule is founded partly in public policy and partly in agreement with the parties. They show that the protection of admissions against interest is the most important practical effect of the rule. But to dissect out identifiable admissions and withhold protection from the rest of the without prejudice communications except for a special reason would not only create huge practical difficulties but would be contrary to the underlying objective of giving protection to the parties.
The Relevant Facts
"7. … At the hearing both parties expressed a continuing desire to mediate.
8. I raised with the parties at the hearing the lack of any exchange of expert views between them in written form or by way of reports or at without prejudice meetings. I enquired of both parties whether they considered that mediation would have any reasonable prospect of success without this process of the exchange of information and the views of the respective principal experts first having taken place. Both parties agreed that a detailed without prejudice meeting or series of meetings should take place between the principal experts prior to any attempted mediation."
"Paragraph 6 is okay save that we do not agree that it is appropriate to have an order that there is a joint statement of issues agreed, etc. That was not discussed. We do not have an issue with it in principle, but it could add significant costs. What was ordered was a meeting on site to discuss the Scott Schedule with a proposal that the experts report to their instructing solicitors. We are happy to talk nearer the time about whether they can usefully do more and even in terms of some sort of joint statement but not an Order at this stage."
"I am happy with all your proposed amendments to the draft with the exception of the question whether the experts should produce a joint statement (CPR 25.12(3)). My understanding at the hearing and Andrew Hennesey's [his solicitor] was that the judge intended there to be such a statement but we have neither of us got a note that puts the matter beyond doubt.
We think that a joint statement would be desirable for the following reasons:
(a) Without one there will potentially be grave problems at any settlement discussions if we are not certain what the respective positions of the experts are after their meeting.
(b) Since a joint statement is likely to be required in any event we think that it would be desirable that it be drawn up while the experts' discussions are still fresh in their memories.
(c) A joint statement will be essential before the experts come to write their reports. Obviously we do not want them to waste time on matters which are not in issue between them, but unless there is a statement they will not be able to refer to their discussions."
He attached a second draft of his proposed order which retained the requirement for a statement in these terms:
"By 23.9.05 the parties' architectural experts (Peter Blockley for the Claimants and Frank Cleveland for the Defendants) do 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."
"On 19.7.05 Mr. Bacon (Counsel for the Claimants) and I (Counsel for the Defendant) appeared before Judge Thornton QC on a restored CMC in the above case. We have almost reached agreement on the order that we would like the learned judge to make, but there is one matter that separates us, namely whether the experts should prepare a joint statement after they have met pursuant to CPR 35.12.3. The Claimants would prefer that they don't and the Defendants would prefer that they do."
"27. I would finally observe that the Defendant relied in part for its contentions on the suggested fact that the order requiring the two experts to make a joint statement was made under the provisions of CPR 35.12(3) which provides that the court may direct that following a discussion the experts must prepare a statement for the court. This showed, it was contended, that the joint statement had a dual purpose and was not privileged in the context of the court seeing the contents of the statement during the subsequent stages of the litigation.
28. However, the wording of the relevant direction set out above does not refer to CPR 35.12(3) but merely to the preparation of 'a statement' (not 'a joint statement'). The Defendant had sought wording which required a joint statement to be prepared under the provisions of CPR 35.12 but those additional provisions were omitted from the direction. This consideration is not of course conclusive either way since the relevant consideration is what was agreed by the two experts and what was their authority as to the status of the document they had signed and as to whether that document could have a double purpose which could result in the privilege being lifted if the other purpose was its use in the mediation."
"At the CMC on 19th July 2005 the parties' respective experts were tasked with producing a joint statement in advance of mediation. Mr. Cleveland returned to work on 15th August and only managed to pick up Mr. Blockley's e-mails after speaking with Mr. Blockley yesterday. As we mentioned immediately after the CMC on 19th July 2005 Mr. Blockley is unavailable from 3rd September to 6th October 2005.
The experts are unable to meet until 25th August 2005 and are concerned as to whether a joint statement can now be finalised in a form suitable for mediation in advance of Mr. Blockley's departure."
"In view of the number and complexity of the issues I am not optimistic that we will be able to explore the issues and produce an agreed joint statement in that time frame in a form which would be helpful to the parties or the court, although we will obviously do our best."
"The joint statement … will almost certainly not be in a fit state for filing with the court."
Mr. Davidson responded immediately to point out that:
"The proposal is not for a joint report to submit to the court but one which can be used in mediation. In those circumstances the report would not need to be in a form appropriate for the court at this stage, merely a working document to assist with mediation."
Mr. Blockley replied again to confirm to Mr. Davidson that he "was aware that the joint statement was for the purposes of mediation."
"12. … Mr. Blockley agreed to this during a telephone conversation. Later on 1st September 2005 I sent a copy of the signature page with 'without prejudice' duly removed. My covering fax sheet together with a covering letter with the posted copy of the joint statement clearly noted to Mr. Blockley the agreed removal of 'without prejudice' status … Mr. Blockley signed and returned the signature page to me by e-mail …
13. At no time since mutually agreeing our amendments did I understand that Mr. Blockley regarded the agreement as merely provisional or merely for the purposes of mediation … "
It is of course that last point which is at the heart of the dispute now between the parties.
"3. The parties agree that every person involved in the mediation will keep confidential:
(a) the fact that the mediation is to take place or has taken place other than to inform a court dealing with any litigation relating to the dispute of that fact, and
(b) all information, whether oral or written or otherwise, produced for or at the mediation including the terms of any settlement agreement arising from it;
provided that nothing in this clause prevents the parties including the mediator discussing the mediation with the parties' professional advisers and/or insurers or any party to the mediator making disclosure to any relevant authority or person …
4. The parties agree that:
(a) all offers, promises, conduct and statements made in the course of the mediation proceedings are inadmissible in evidence in any litigation or arbitration …
Note: Evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable simply as a result of its use in the mediation."
Is the Statement Privileged?
(a) The orders in respect of the experts' meetings and the statement only came about as a result of the imminent mediation. To put it another way, without the mediation, the order of 18th August 2005 in respect of the experts' meetings and the statement would not have been made at all. At the very least, the period for the preparation of the joint statement would have been much longer than a month or so from the making of the order, particularly given that experts' reports had not yet been exchanged. The whole purpose of the short period in which the statement had to be agreed was so that it could facilitate the mediation.
(b) The judge did not think that he was making a conventional order pursuant to CPR 35.12(3), although it may fairly be said that, on the wording, that is what he did do. He clearly believed that the order was made for the purposes of the mediation, to assist the parties and to give the mediation the greatest possible chance of success.
(c) The Claimant's solicitor and the Claimant's expert both believed that the purpose of the statement was for use in the mediation: see paragraphs 20-22 above.
(d) To put it at its highest, the Defendant's expert believed that the statement had a dual purpose: it was to be used initially in the forthcoming mediation and, if the mediation failed, it might possibly be used in any subsequent court proceedings.
I find therefore that, as at 1st September, the primary function of the statement was to assist in the mediation.
Abuse of Privilege
(a) In Forster v. Friedland [1992] CAT 1052 Hoffmann LJ (as he then was) said that the value of the without prejudice rule would be seriously impaired if its protection could be removed for anything less than unambiguous impropriety.
(b) In Fazil-Alizadeh v. Nikbin [1993] CAT 205 Simon Browne LJ said:
"There are powerful policy reasons for admitting in evidence as exceptions to the without prejudice rule in only the very clearest of cases. Unless this highly beneficial rule is most scrupulously and jealously protected it will all too readily become eroded."
(c) In Unilever Robert Walker LJ referred on a number of occasions in his judgment to the abuse of privilege and the need for something "oppressive, dishonest or dishonourable" in the defendant's conduct at the without prejudice meeting in order for the without prejudice protection to fall away."
"It is not the mere inconsistency between an admission in a pleaded case or a stated position, with the mere possibility that such a case or position, if persisted in, may lead to perjury, that loses the admitting party the protection of the privilege: see the first holding in Fazil-Alizadeh. It is the fact that the privilege is itself abused that does so. It is not an abuse of the privilege to tell the truth even where the truth is contrary to one's case. That after all is what the without prejudice rule is all about, to encourage parties to speak frankly to one another in aid of reaching a settlement, and the public interest in that rule is very great and not to be sacrificed save in truly exceptional and needy circumstances."
Conclusions
(a) Ordinarily, a court order for the provision of a statement signed by both experts as to what they agree and disagree will mean that, once the statement has been agreed, the without prejudice protection will be removed and the statement can be referred to by all parties in the subsequent litigation. That is so even if the statement is used for the purposes of mediation.
(b) On the facts of the present dispute this was not an ordinary case. The judge only made the order for the assistance of the parties in the mediation and the Claimants' solicitor and the Claimants' expert acted on that basis. As a result, in this case, the prima facie position is that the document was privileged. To put the same point another way, this is not a clear and unequivocal case where privilege has been waived.
(c) In view of the limited time and financial constraints on the Claimants' expert last summer, in the weeks prior to the agreement of the joint statement, it seems to me that it would be unfair to rule that the statement was now not privileged. I conclude on the evidence that, if the Claimants' expert had known that the joint statement was to be used in the litigation if the mediation was unsuccessful, then he would not have signed it.
(d) The Defendants' alternative argument fails. The mere fact of inconsistency between the statement and the new pleadings, no matter how wide, cannot in my judgment amount to an abuse of the privileged occasion or unambiguous impropriety. Even if that is wrong, then, on the material that I have been provided with, it seems to me to be clear that an unambiguous impropriety has simply not been made out on the facts.
(Following submissions)
(Following submissions)
Note 1 Lewison J in Hall v. Pertemps [2005] EWHC 3110 Ch, para. 9 [Back] Note 2 See the words of Rix LJ in Savings and Investment Bank v. Finkin [2004] 1 WLR 684, para. 56 [Back]