Does Mediation Privilege Exist?

The recently published edition of Phipson on Evidence (20th Edition, 2024) refers to the assumption made by some commentators of a particular form of privilege that applies to the mediation process - "mediation privilege". This is a term that is widely used, but what is it and does it even exist?

This was briefly considered by Tindal J in Pentagon Food Group Ltd and others v B Cadman Ltd [2024] EWHC 2513 (Comm); a claim for, amongst other things, misrepresentations made in the course of a mediation. One of the issues was whether what was said in the mediation was actionable or protected by a form of special mediation privilege.

In the 2007 case of Brown v Rice the court rejected the claim for a distinct form of mediation privilege. It seems the issue has not been considered since, at least until the Pentagon Food Group case. The judge asked whether the "undoubted enhanced importance of mediation" now justifies an enhanced form of "mediation privilege" providing greater protection compared to less structured without prejudice negotiations. He answered this question as "no", without giving a detailed explanation but instead saying he was "not convinced by that" and as such he was also in agreement with the editors of Phipson.

In other words, the judge considered that the privilege that applies to negotiations ("without prejudice" protection) is sufficient for the mediation process. This may not be surprising given that mediations are facilitated negotiations.

If there is no special "mediation privilege" then what protection does apply?

The without prejudice rule is simple and well understood. As a matter of public policy, any concessions or statements made during a negotiation that are genuinely aimed at settlement are not admissable as evidence in the claim. Further, that protection applies to any litigation connected with the same subject matter, even if the parties are different in that litigation.

But there are exceptions to the without prejudice rule, intended to protect the integrity of the negotiations. A list of (non-exhaustive) exceptions where without prejudice communications may be admissable were set out by Walker LJ in the Unilever v Proctor & Gamble case and include:

(1) where the issue is whether without prejudice communications have resulted in a concluded compromise agreement;

(2) where the issue is whether an agreement should be set aside on the ground of misrepresentation, fraud, or undue influence;

(3) where to prove an estoppel, even if there is no concluded compromise, a clear statement on which the other party is intended to act and does so;

(4) where the exclusion of the evidence would act as a cloak for perjury, blackmail or other ‘unambiguous impropriety’;

(5) to explain delay or apparent acquiescence;

(6) where the issue is whether the claimant had acted reasonably to mitigate his loss in the settlement of proceedings; and

(7) an offer expressly made ‘without prejudice except as to costs’.

There is a further exception, developed by Lord Clarke in Oceanbulk that was relevant to this case, namely that where the issue is construing the settlement agreement, facts within the parties' common knowledge, even if conveyed in a without prejudice meeting, are admissable.

The Judge said he was not convinced those limited exceptions required modification for the mediation process. As I comment above, given that a mediation is a facilitated negotiation, this is perhaps not surprising. Also, there is an opportunity for the parties to agree to extra protections within the mediation agreement itself. It is usual for mediation agreements to provide that there is no enforceable settlement unless it is evidenced by a signed written agreement, and that closes down the the first exception listed above. Whilst the judge says mediation agreements impose "superadded duties of confidentiality", he seemingly assumed those prevented the mediator from giving evidence at court and not the parties themselves.

What is interesting about this case was the Judge's willingness to widen the exceptions to the without prejudice rule. Although it may be argued as non-binding, the Judge was willing to:

• extend the Ocenbulk exception (ie that admits evidence from without prejudice negotiations of facts within the parties' common knowledge where relevant to interpreting contractual words) so that it should apply similarly where the facts are relevant to whether a contractual term can be implied.

• extend the Unilever exception (ie the exception that admits evidence to show that an agreement should be set aside for misrepresentation, fraud or undue influence) so that it should extend to negligent implied misrepresentations too.

In summary, it seems that there is no special mediation privilege - even though emails are often headed with this "tag". The mediation process is protected by the without prejudice rule and whatever additional protections are agreed within the mediation agreement. This elevates the mediation agreement to be an important document and my standard agreement provides additional express protections.

Simon Goldring

October 2024