Mediation Confidentiality and Privilege: The Twin Supports of Resolution (Part 1 of 2)

Mediation Confidentiality and Privilege: The Twin Supports of Resolution

Mediation Confidentiality and Privilege: The Twin Supports of Resolution

It has been a long and tiring day in mediation. The parties have struggled with complex and emotional issues, but finally have hammered out the major points have a complex Settlement. An apology was a major impetus to the final agreement. A few “minor” points still must be worked out, and the mediator continues to work with the parties. But it appears to be a successful mediation, and the attorneys are already finalizing a written settlement agreement memorializing the deal terms for the parties’ signatures.

It’s late. Everyone is hungry, tired and grumpy. Suddenly, someone says something unexpected that is an emotional trigger. The mediation is in danger of ‘blowing up’, and the mediator is struggling to perform damage control. It seems like no one is willing to sign the settlement agreement.

Now what? If the agreement is not signed, is there still an enforceable deal? The parties went to mediation after assurances of the confidentiality of their communications – both those with the mediator and those with other participants. They discussed their financial situation, plans for the future, candid emotions about other participants, their mental and physical injuries and the impact the dispute has had on their marriage and their families.

No one wants their information disclosed to the general public, and certainly no one wants to see it exposed in court during litigation. How do attorneys ensure the information remains confidential even if no agreement is reached? How do they draft an enforceable settlement agreement amid the pressures of mediation, and how can they ensure that agreement does not spark its own litigation?

The confidentiality of mediation communications Is central to the success of dispute resolution efforts. Frequently, the barriers to settlement Of cases that have been dragging on for years lies not in dollars and cents, nor in some legal point. To be sure, financial and legal realities have their place in settlement. But the key is often in some dream unrealized, some unspoken fear, or some long-ago insult.

Such things may be legally irrelevant, But that does not stop them from mattering for settlement purposes. Things like this motivate us, and our motivations show the way to settlement. But without confidentiality of mediation communications, the parties would be unlikely to discuss their feelings candidly, and the mediator’s effectiveness would be impaired.

The more the mediator knows about the barriers to settlement, the legal merits of all parties‘ cases, is there a financial situations and related risk tolerance, the real damages done and the relationship between the parties, the more likely they are to be able to realistically assess the situation and craft a way forward to settlement. But no one will talk about these matters if there is a chance they will be broadcast all over town or even be used against a non-settling party in litigation. An apology is a special case here.

On one hand, sincere apologies have been shown to reduce or even eliminate claims for damages. On the other, in some jurisdictions they are considered admissions of liability. So though that apology might resolve the entire case, It will not be given unless there is an assurance of confidentiality.

Before the mediation, attorneys should discuss with the client the need to be frank with the mediator, and the nature and extent of mediation confidentiality. Clients should feel free to discuss anything with the neutral, knowing he or she will neither disclose the information to the other side nor to anyone else if the disclosure is made confidentially. If they could potentially be relevant, Counsel for the parties should also discuss exceptions to confidentiality, such as juvenile proceedings, criminal cases, administrative proceedings, ability ta introduce a signed settlement agreement and an action to enforce that agreement or duress in obtaining consent to settlement. In the initial session of the mediation, the neutral will also emphasize the existence of confidentiality and privilege, because they are so central to the process. Additionally, it is very likely that the neutral will have the parties find a mediation agreement containing confidentiality provisions in it. The mediation proceeds under the assumption that it is privileged and confidential.

That said, a mediator should be told what information is confidential and what can be shared with the other party. The mediator will want to share as much as possible to facilitate settlement, so no assumptions should be made. Either there should be a blanket statement that everything said to the mediator is confidential (which would not be very helpful to the process) or the mediator should be told at each juncture what is confidential and what is not.

Confidentiality and privilege are sometimes used as interchangeable terms. However, they are legally distinct. Confidential information is information, which has been the subject of efforts to keep it secret. It is not always inadmissible, but it is usually subject to a more stringent standard of discovery. And it may not be disclosed to those who do not need to see it, even parties to the litigation. An example of this is trade secrets. Even where they are discoverable, the court strictly protects them. In general, mediation communications have been closely protected by the appellate courts, with very few exceptions allowed. Even those few exceptions shocked. The dispute resolution community, given the centrality of confidentiality to the success of mediation.

In contrast to confidentiality, privilege refers to the inability to admit something as evidence at trial, not to prevent its disclosure to the public. But a thing may be both confidential and privileged. Privileges are statutory, and narrowly construed. However, they may be broadly defined.

The Breadth of Mediation Communications

Confidentiality of “mediation communications,” as the term is used above, is extremely broad and meant to cover the entire spectrum of communications that might take place during or in preparation for mediation. Under the Uniform Mediation Act, which serves as a model for several jurisdictions, mediation communications are defined as:

“[C]onduct or a statement, whether oral, in a record, of it verbal, or nonverbal, that occurs during a mediation or is made for purposes of considering, conducting, participating in, initiating, continuing, or reconvening a mediation or retaining a mediator.”

That is, so long as the communication is related to the mediation in some way, it is confidential and privileged

Confidentiality

Even before passage of the Uniform Mediation Act, courts understood that the process works best when parties frankly and openly discuss the dispute and its effect on them. Evaluation of the worth of one’s case requires admitting it has weaknesses vulnerabilities as well as strengths and advantages. Failure to do this honestly will lead to a skewed view of the merits. But few people will admit weakness when that admission might be broadcast or used against them. Recognizing this, courts jealously guard The integrity of mediation confidentiality.

Further, if a non-monetary integrative (“win-win) solution that meets the needs of all parties is possible, It will not occur unless the parties engage in mutual dialogue about their goals, needs, and interests. But the parties are unlikely to let one another inside their heads and hearts in the shadow of an adversarial process in which one party could take advantage of the disclosures of the other that were made in mediation. Integrative solutions require a spirit of cooperation that cannot exist if the exploratory process necessary can become fuel for the competitive fires of litigation.

As was briefly noted above, even though the courts recognize the importance of confidentiality to the mediation process, the protection is not absolute. It is subject to a judicial balancing test in which the public policy in favor of mediation is substantially outweighed by the need for the evidence, and such evidence is not otherwise available. This test has been incorporated into the Uniform Mediation Act.

The balancing test introduces an unwelcome measure of unpredictability into the confidentiality question. If a court may be convinced that a contrary public interest outweighs the interest in mediation confidentiality, the bargain the parties made when agreeing to mediation will not be kept.

Further, although reference has been made to the “uniform” mediation act, the law concerning mediation is anything but uniform. According the comments to the UMA, over 2500 statutes and rules make up a patchwork of law concerning mediation in the United States. Not all states have adopted the UMA, and even those that have may have modified the basic framework in some important respects. And as mediator Max Factor III recently pointed out, because of the Supremacy Clause, if a countervailing federal right is impaired by mediation confidentiality, the State law protections will give way to the federal guarantees.

So the answers to the questions posed at the beginning of the article above are, as in so many legal contexts, “it depends on what the law says.” The relevant law, of course, is the law of the jurisdiction in which the mediation is held — unless Federal rights become an issue.

For example, where the UMA applies, there is no enforceable agreement without a writing signed by all parties. But some jurisdictions apply ordinary contract principles to mediation agreements and might determine that the deal points agreed upon were sufficiently definite and complete to create an enforceable oral contract.

What does all of this mean for parties in mediation who are concerned about confidentiality? Is the promise of confidentiality in mediation illusory?

The short answer is no. In general, courts disfavor mediation-related litigation, and protect mediation confidentiality. But it is important to ask competent counsel about the extent of mediation confidentiality in your particular jurisdiction, and any exceptions to the rule that could be applied in light of the known facts and likely positions in your dispute.

Section 8 of the Uniform Mediation Act provides: “mediation communications are confidential to the extent agreed by the parties or provided by other law or rule of this State.” So the parties may to some degree craft their own confidentiality rules, though it seems unlikely that statutory or constitutional exceptions can be eliminated. To the extent that the parties cannot agree or some unwaiveable exception applies, parties should be expected to self-censor, making the mediator’s task more difficult.

*Continued in Part 2… (stay tuned for Mediation Privilege)

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Scott Van Soye
Managing Editor - Scott Van Soye is the managing editor of ADR Times. He is also a full-time mediator and arbitrator working with the Agency for Dispute Resolution with offices in Irvine, Beverly Hills and nationwide. He is a member of the California Bar, and practiced real estate, civil rights, and employment law for over twenty years. He holds an LL.M. in Dispute Resolution from Pepperdine University, where he is an adjunct professor of law. He welcomes your inquiries, and can be reached at [email protected] or (800) 616-1202, Ext. 721

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