Cumbria Waste Management Ltd & Anor v Baines Wilson (A Firm)

Documents and communications arising from a mediation should, in normal circumstances, remain protected from disclosure. The without prejudice rule is founded on public policy and, where applicable, the parties’ agreement. Its exceptions should be applied cautiously, particularly where a third party shares the privilege and confidentiality. The exception recognised in Muller v Lindsay & Mortimer for a former client’s claim against solicitors did not extend to disclosure of a third party’s mediation material. Express confidentiality provisions and the public interest in effective mediation supported refusal of the application.

The defendant solicitors had acted for the claimants in negotiating a waste-management agreement with DEFRA. After the claimants settled their dispute with DEFRA following two mediations, they sued the solicitors in negligence for the alleged loss represented by the difference between their original claims and the settlement sums.

The claimants pleaded that the settlement was reasonable. The defendant therefore sought disclosure of documents arising from or connected with the mediations, contending that the material was relevant to the reasonableness and causes of settlement. DEFRA, which was not a party, resisted disclosure under the mediation agreements, the without prejudice rule and confidentiality principles. The central issue was whether the exception identified in Muller v Lindsay & Mortimer required disclosure.

1. Application dismissed. The defendant could not bring the mediation documents within the Muller v Lindsay & Mortimer exception to the without prejudice rule. That case concerned a former client’s claim against former solicitors and did not consider the position of a third party whose material was sought. Here DEFRA shared the privilege and had expressly agreed confidentiality with the claimants. The application therefore failed on privilege alone (paras [24]–[27]).
2. The without prejudice rule protects genuine settlement negotiations because of the public interest in encouraging settlement and, in some cases, the parties’ express or implied agreement. Courts should be slow to create exceptions, particularly in mediation, where confidentiality is central to the integrity of the process (paras [16]–[27]).
3. Independently, DEFRA could rely on an exception to the general principle that confidentiality alone is not ordinarily a bar to disclosure. Documents and communications within a mediation should normally be protected from disclosure (paras [28]–[30]).
4. The court should be very slow to order disclosure of papers held by mediators. Protective measures such as restricting access or hearing evidence in closed court were inappropriate. Justice should normally be administered openly, and DEFRA should not be subjected to the expense and inconvenience of such a regime (paras [31]–[32]). The court did not need to decide the separate contractual or relevance objections (para [33]).