Can a court hear evidence of without prejudice negotiations in a mediation in order to determine whether or not there was a concluded agreement to settle?

What is the consequence of the form of this Mediation Agreement:

1. that provided any agreement to settle reached in the mediation is not complete until reduced to writing and signed by, or on behalf of, the parties?
2. if an offer, made at the mediation, is left open for acceptance on the following day, is any such acceptance within the mediation for the purposes of creating a concluded agreement to settle?

The Detail: 

Without Prejudice Rule

The Judge reviewed the existing law as to the without prejudice rule, including its justification on the grounds of public policy and the express or implied agreement that negotiations should not be admissible in evidence. He referred to Reed Executive PLC –v- Reed Business Information Limited (decision here) where the Court of Appeal had unanimously agreed that no distinction is to be made between party to party negotiations and negotiations conducted within a mediation: both are to be treated as within the without prejudice rule. One of the exceptions to that rule is being able to consider without prejudice material to see whether a concluded settlement was reached (Tomlin –v- Standard Telephones and Cables Limited [1969] 1 WLR 1378). That much was common ground between the parties, as was an acceptance that the court could not require the mediator to give evidence. There was, therefore, no decision as to whether the mediator could be compelled to give evidence.

The Judge did not accept the following: 

• ADR Group’s submission that nothing said or done in preparation for, at, or in consequence of the mediation can ever be used outside the mediation;
• ADR Group’s further submission that the court should not readily open up without prejudice discussions to the scrutiny of the court. Where there is an exception to the rule, the Judge said the court must look at the necessary material;
• Mrs Patel’s submission that the Mediation Agreement prevented the court  looking at events relevant to its decision on the matters within the exception to the without prejudice rule. That was contended for by reason of Clause 1.4 of the Mediation Agreement which provided the settlement would not be binding unless it was in writing and signed by the parties It had been argued that this removed the exception to the without prejudice rule.

 Reduced to writing and signed

The provision in Clause 1.4 of this Mediation Agreement that required any settlement agreement to be reduced to writing and signed by, or on behalf of, the parties is believed to be used in most mediation agreements. The Judge said:

“…the purported acceptance of that offer would not have resulted in a concluded settlement. Any alleged agreement resulting from that offer and acceptance would have been incomplete and, by virtue of Clause 1.4 of the agreement to mediate, the acceptance was in any event subject to contract.”

Acceptance the following day

An attempt was made to argue that the acceptance, sent by letter the day after the mediation, was not “within the mediation” as required by that Clause and, consequently, there was no concluded agreement. The Judge said,  obiter:

“Offers made during mediation are commonly left on the table after the conclusion of the formal mediation hearing itself, in order to enable the parties to reflect and if necessary for the mediator to continue discussions with the parties individually. In my judgment, an acceptance, made after the conclusion of the mediation hearing, of such an offer is just as much made in the mediation as if it was made at the hearing itself. In the present case, had there been a valid offer and acceptance, it would have resulted in a “settlement reached in the meditation” within Clause 1.4 of the agreement to mediate."