Aird & Anor v Prime Meridian Ltd

A court-ordered expert statement is ordinarily open and may be used in subsequent proceedings, even if it is also used in mediation. The position changes where the order and surrounding circumstances show that the statement was prepared primarily for mediation and the parties understood it to have that limited purpose. In such a case, privilege is retained unless waived in clear and unequivocal circumstances. A substantial inconsistency between a privileged statement and a later pleaded case does not, without more, constitute abuse of privilege or unambiguous impropriety. The exception to the without-prejudice rule is reserved for truly exceptional conduct that abuses the privileged occasion.

The defendants applied for declarations that a joint statement prepared and signed by the parties’ architectural experts was not privileged and could be referred to in the ongoing proceedings. The statement followed a court order requiring the experts to meet and identify matters of agreement and disagreement before a mediation. The mediation failed, and the claimants later sought amendments allegedly inconsistent with the statement.

The defendants alternatively argued that the inconsistency amounted to abuse of privilege or unambiguous impropriety. The central issues were whether the statement was protected by the without-prejudice rule and, if so, whether the privilege had been lost.

1. Application dismissed. The defendants’ application failed on both the privilege issue and the alternative abuse-of-privilege argument.
2. Ordinarily, a statement signed by experts following a court order under CPR 35.12 would not be privileged. It is prepared for the assistance of the court in case and trial management and may be referred to in subsequent litigation. Its use in a mediation does not, by itself, alter that position.
3. This was an exceptional case. The order arose directly from the imminent mediation, the short timetable was designed to facilitate it, and the claimants’ solicitor and expert understood the statement to be prepared for mediation. The defendants’ expert regarded it as having, at most, a possible dual purpose. The statement was therefore privileged on the particular facts.
4. The court also took account of fairness. The claimants’ expert had undertaken a more limited exercise than would ordinarily precede a court-ordered expert statement because of the time and financial constraints before the mediation. It would have been unfair to treat the document as open when he would not have signed it had he understood that it could be used in the litigation.
5. Privilege had not been waived in clear and unequivocal circumstances. The removal of the without-prejudice marking and a reference to filing the document with the court did not overcome the parties’ and expert’s relevant understanding of its purpose.
6. The later inconsistency between the statement and the amended pleadings, however extensive, did not amount to abuse of the privileged occasion or unambiguous impropriety. Without-prejudice protection is not lost merely because a party later tells the truth or advances a position inconsistent with an earlier settlement-related statement. The claimants were awarded 80 per cent of their costs, summarily assessed at £9,500. Permission to appeal was refused.