Confidentiality in mediations

It is frequently said that mediation is a confidential process. But what exactly does that mean? Before turning to confidentiality, it is first necessary to consider the “without prejudice” rule. These two concepts are often confused. However, there is a clear difference between them. The without prejudice rule is a rule of general law (usually restated in mediation agreements) that prevents a party from relying at court on statements made in the negotiations. Confidentiality depends on the wording of the mediation agreement and applies to disclosure to the whole world of anything covered by the terms of the agreement and subject to any exceptions in the agreement. Without prejudice rule The negotiations that take place during a mediation are, like any other negotiation, subject to the without prejudice rule, ie it is not possible to give evidence of the communications made in the mediation in any subsequent litigation should the case not settle. The idea is that a safe space is created where everyone can speak openly without worrying that the words they use during the mediation might somehow be used against them subsequently in court. There are exceptions to the rule, such as where one party is alleging fraud, undue influence, duress or misrepresentation. The privilege is that of the parties to the dispute and can be waived by those parties. The mediator cannot prevent the parties from disclosing in court the details of the conversations between themselves if they wish to do so. However, that does not of itself mean they can require the mediator to disclose conversations that have taken place privately between the mediator and each party (see further below). Confidentiality Confidentiality applies in different ways to the different participants. The precise way in which it will apply will depend on the terms of the mediation agreement. These are the people to consider: • The mediator (and any assistant)• Each party• Other persons present including experts and lawyers The mediator The first and most obvious way in which the mediator is bound by a duty of confidentiality relates to the obligation not to disclose things said during the private caucus sessions until consent has been given. The idea is that the parties can trust they can talk to the mediator freely, knowing nothing will be disclosed until they are ready for that disclosure to take place. The more the mediator knows at the earliest possible stage as to what is going on in each room, the easier it is for the mediator to help the parties reach a solution. Some mediators will ask the party at the end of each caucus session whether there is anything they do not wish to be disclosed to the other party. Personally, I think that is dangerous and could lead to mistakes. Most mediators adopt the safer practice of not taking anything out of the room unless they are expressly told they can. In addition, mediation agreements will also often contain an obligation on the mediator not to disclose the fact of the mediation, or anything arising in it, to the outside world (except in a few limited circumstances). The parties Some mediation agreements contain an obligation on the parties not to disclose the fact that the mediation is going to or has taken place. The main confidentiality obligation that parties and their lawyers sign up to is not to disclose certain things that have arisen during the mediation. The precise details depend on the wording of the mediation agreement. This is an example: “The parties, their representatives and anyone else participating with them at the mediation will not disclose to third parties information provided in confidence during or in connection with the mediation or any information relating to the negotiations that take place in the mediation.” There will however be a number of circumstances where it might be appropriate or necessary for parties to disclose that confidential information and these are carved out as exceptions, eg: • The parties agree otherwise in writing.• They are required to do so by law.• It is necessary to do so to implement or to enforce the terms of the settlement.• It is necessary to advise insurers or insurance brokers. It is necessary during the mediation for the purposes of the negotiation to discuss these matters with insurers, experts, financial advisers, legal advisers or any other named individuals by agreement between the parties in writing, but in any of those cases only on terms that otherwise preserve confidentiality. It is given to legal advisers for advising further in relation to the dispute but only on terms that otherwise preserve confidentiality. There is also usually a clause that relates specifically to documents, eg: “All documents and other material produced or given by one party to another party or their representatives for the purposes of the mediation shall be held in confidence by the party receiving it and shall be used solely for the purpose of the mediation. At the end of the mediation all such material shall be returned to the originating party or forthwith destroyed at the option of the originating party.” Mediation agreements rarely contain a term requiring the parties to keep the terms of settlements confidential. If that is what one or more of the parties desire, they need it to be an express term of the settlement agreement. Other persons present All other persons attending the mediation are generally required to sign the agreement (usually in a separate schedule) stating they will also treat what happens at the mediation as confidential. This applies to lawyers, friends and experts, indeed anyone else at the mediation. It is important that all these people are made aware of what they will be asked to sign well in advance of the mediation and that they do so before it takes place. Very occasionally a barrister due to attend/attending a mediation refuses to sign the confidentiality provisions. This can cause havoc and distress, just before the process is due to get underway. It creates instant suspicion and bad feeling. The other party needs to decide whether or not to abandon the mediation with all the consequences that may entail or to carry on. Under their Code of Conduct barristers do of course owe their own clients a duty of confidentiality, but this duty does not extend to third parties. Hence the requirement that they should also sign the mediation agreement. There is no Bar Council guidance stating that barristers should not sign mediation agreements, as is sometimes suggested. Confidentiality is crucial to the mediation process and the parties must have confidence that everyone involved will treat the process in the same way. This applies to counsel as much as to anyone else. Calling the mediator to give evidence Most mediation agreements contain a term stating that the parties cannot require the mediator to give evidence or produce records or notes. Unlike the position under the without prejudice rule, which can be waived by the parties, this is a provision relating to confidentiality between the parties to the dispute and the mediator which therefore cannot be waived by them. The clause gives rise to an enforceable right by the mediator. However, the right is not an absolute one. The court can require the mediator to give evidence if “it is in the interests of justice that she should be called as a witness” (Farm Assist Ltd v Secretary of State for the Environment, Food and Rural Affairs (No 2) [2009] EWHC 1102 (TCC)). Weighing up various factors, the judge in that case considered that the mediator should give evidence. Mediation privilege It is sometimes suggested that there is, or should be, a wider doctrine of “mediation privilege”. Quite what this means is not clear, not least because the courts have not accepted that such a concept exists (see most recently The Pentagon Food Group Ltd v B Cadman Ltd [2024] EWHC 2513 (Comm)). Sometimes documents handed over before or during a mediation are headed “subject to mediation privilege”. What that precisely means is also not clear, given there is no such concept. However, it can no doubt be interpreted as meaning that the document is being handed over pursuant to the without prejudice rule or the clause about documents usually contained in mediation agreements referred to above. Image © Adobe Stock Gary Webber is a founder member of The Property Mediators (www.thepropertymediators.co.uk)