Confidentiality in Mediation: What is actually confidential?

Posted on Apr 5, 2017 by Janine Wilson   |   Categories: Litigation & Dispute Resolution

Parties will often be told that one of the key benefits of mediation is that the negotiations that they have are confidential and that the outcome they reach can be kept confidential.

There is no doubt that confidentiality is very important incentive for parties to mediate and for the free flow of creative discussion and negotiation.

The obligation of confidentiality will be set out in the mediation agreement signed by both parties before the mediation. Confidentiality obligations also apply as a result of the operation of legislation and the common law.

However, nothing in the law is without exception. Confidentiality in mediation certainly has its limits and it is important for parties to remember that the application of confidentiality obligations does not give them a licence for bad behaviour in mediation or that any conduct in bad faith will be without consequence.

Perhaps an obvious exception to confidentiality is that a party cannot disclose information regarding a crime or an issue of public safety and claim that “confidentiality” somehow protects disclosure by the mediator or other party of that information or otherwise prevents a mediator from reporting that information to an appropriate authority. That much is clear. From there, things start to get a little murky.

Say one party discloses to a mediator in a confidential session (without the other party present) that he or she has an intention to deceive the other party to the mediation in some material way or that they have deliberately withheld critical information from the other party. That critical information may have a fundamental impact on the outcome of the negotiation. Despite the best efforts of the mediator to encourage that party to disclose this information and act in good faith, they refuse and, worse still, direct the mediator not to make that disclosure to the other party.

In those circumstances, a mediator is not able to disclose this information to the other side. However, the mediator may consider that such a difficult ethical issue is created by that situation that the mediator simply ends the mediation altogether. That would have practical and costly consequences for the parties.

Far worse is the prospect that a negotiated settlement is reached, the parties sign a binding document, then, some time later, the other party becomes aware of the deception of the other party. A dispute arises and the disadvantaged party seeks to lead evidence of what happened at the mediation. Can a party claim that no evidence of these negotiations can be given because of the negotiations were confidential? They could try, but they won’t get far.

Courts have found many times that where a settlement has been brought about by false or misleading statements made by a party during negotiations, confidentiality will not protect evidence being produced in Court of what occurred during the mediation. That means that position papers or other documents produced for the purposes of mediation can be used as evidence in Court, evidence can be lead of statements made by the parties during the mediation and the mediator might also be required to give evidence.

When preparing your clients for a mediation, keep in mind that the protection given by confidentiality obligations is not bullet proof and parties must always act honestly and in good faith if they want to reach a binding settlement agreement.

(Janine Wilson is a nationally accredited mediator with the Resolution Institute)