Are mediations really without prejudice?

• Published date: 12 June 2021
• Subject Matter: Litigation, Mediation & Arbitration, Disclosure & Electronic Discovery & Privilege, Arbitration & Dispute Resolution, Court Procedure
• Law Firm: Corrs Chambers Westgarth
• Author: Miss Kate Betts, Alice Robertson and Emma West

Alternative dispute resolution (ADR) comprises a fundamental element of modern litigation. Pre-litigation processes and court rules in Queensland¹ provide for ADR, by way of settlement conference or mediation, to encourage settlement of the matter prior to commencement of action in court and again before trial.

All conduct, communications and agreements made during, or arising from, settlement conferences and mediations are understood to be 'without prejudice'. It is not unusual for parties to a mediation to agree as much in writing. The consequence is that, in genuine attempts to seek compromise and reach settlement, discussions often extend beyond the mutually known facts and evidence between the parties.

The recent decision of the England and Wales Court of Appeal in Berkeley Square Holdings Ltd & Ors v Lancer Property Asset Management Ltd & Ors [2021] EWCA Civ 551 serves as a reminder that 'without prejudice' communications during mediation are not necessarily afforded protection from later use by either or both of the parties.

Berkeley Square Holdings Ltd & Ors v Lancer Property Asset Management Ltd & Ors [2021] EWCA Civ 551: Facts

• A dispute arose as to the entitlement of property managers to fees for managerial services in relation to a '5 billion property portfolio in Central London.²
• The parties to the dispute signed a mediation agreement, which required all persons involved to keep confidential all information arising out of, or in connection with, the mediation, and confirmed that such information was agreed to be 'without prejudice'.³Position papers, marked 'without prejudice', were exchanged by the parties prior to the mediation. Settlement deeds set out the terms of the settlement reached.⁴
• Almost six years later, the property owners commenced proceedings...