Aird & Anor v Prime Meridian Ltd

An order requiring experts to meet and prepare a joint statement under Civil Procedure Rules rule 35.12 must be construed objectively according to its terms. Unexpressed intentions cannot qualify it, and a mediation-related purpose does not alter its status. A statement prepared under rule 35.12(3) is a court document available for use in the proceedings. Its later use in mediation does not make it privileged. A separate document prepared solely for mediation may remain privileged. An experts’ agreement may influence the court but does not bind the parties unless they expressly agree to be bound.

The claimants engaged the defendant to provide architectural services for the construction of a house. They alleged negligence and breach of professional duty. During the proceedings, the Technology and Construction Court ordered the parties’ experts to meet and prepare a joint statement identifying areas of agreement and disagreement under rule 35.12.

The experts produced a statement initially marked without prejudice. It was used in an unsuccessful mediation, later had that marking removed, and was signed and sent for filing. HHJ Coulson QC held that it was privileged for all purposes in [2006] EWHC 2338 TCC. The central issue on appeal was whether the statement was a court-ordered rule 35.12(3) document or mediation material.

Appeal allowed. The Court of Appeal unanimously held that the joint statement was not privileged.

1. Construction of the order. An order under rule 35.12 must be construed objectively according to its expressed terms. The unexpressed intentions or later views of the judge and the parties’ advisers could not qualify the order. The order was plainly made under rule 35.12(3), and the fact that it was made with a contemplated mediation in mind did not change its status.
2. Effect of rule 35.12. The court’s power is to require experts to prepare a statement for use in the proceedings. It has no power to order production of a privileged statement. Experts instructed in civil proceedings must comply with such an order as part of their overriding duty to the court. Solicitors cannot properly instruct an expert not to comply.
3. Privilege and factual inquiry. A separate document prepared for mediation alone may be privileged. A document that is not the ordered statement is not converted into one by a failure to comply with the order. The relevant factual question was whether the document produced was the statement ordered by the court.
4. Application. The final statement was signed by both experts, had its without prejudice marking removed, and was sent to the claimants’ solicitors for filing. It was therefore the considered joint statement required by rule 35.12(3). Its subsequent use in mediation did not confer privilege. Questions of fairness and mediation policy did not alter that conclusion.
5. Further observations. The court may stay proceedings to encourage mediation, but cannot compel participation or prescribe how mediation is conducted. Lady Justice Smith noted the risks of ordering a joint statement before expert reports had been exchanged, but confirmed that rule 35.12 permits such an order at any stage. The lower court’s privilege order was consequently displaced.

• Court of Appeal (Civil Division): On 21 December 2006, the appeal was allowed. The court held that the experts’ joint statement was a court document prepared under rule 35.12(3) and was not privileged. [2006] EWCA Civ 1866.
• High Court of Justice, Queen’s Bench Division, Technology and Construction Court: HHJ Coulson QC held on 19 September 2006 that the joint statement was privileged for all purposes and refused permission to appeal. [2006] EWHC 2338 TCC.