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ACCA Applied Skills · Corporate and Business Law (Global) · Alternative dispute resolution mechanisms

During mediation, Aroha Ltd tells the mediator in a private session that it would accept a lower payment than it is publicly demanding. The mediation fails and Aroha Ltd sues Dunmore Co. Dunmore Co wants to use this private statement as evidence of weakness. Which statement is most likely correct?

The statement is generally confidential and made without prejudice, so it normally cannot be used in later court proceedings. Confidentiality encourages parties to speak frankly in mediation. It is not public, and the mediator's professional qualification does not affect the protection.

  1. AThe statement is generally confidential and made on a without prejudice basis, so it normally cannot be used in the later court caseCorrect
  2. BThe statement can always be used because anything said to a neutral third party is public
  3. CThe statement can be used only if the mediator is a qualified lawyer

Explanation

Mediation is confidential and settlement discussions are normally without prejudice, which encourages candour. Statements made to try to settle generally cannot later be relied on as evidence in court. The mediator's qualifications are irrelevant to this protection.

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