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English Commercial Court enforces obligation to resolve disputes by friendly discussion prior to arbitration
8 July 2014
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10 June 2014
Mediators need to have confidence in the confidentiality of the process, says Jon Turnbull
If there has been a marriage - shotgun or otherwise - between the courts and mediation, one might be forgiven for believing, following the case of Farm Assist Limited (in liquidation) v SSEFRA (2009), that the courts have now commenced divorce proceedings.
Farm Assist sought to set aside a settlement agreement entered into with SSEFRA, following a mediation in June 2003, on the grounds that it had been entered into under economic duress.
SSEFRA sought directions that the mediator should be free to give evidence about the conduct of the mediation, including her private conversations with the parties. Farm Assist did not object to this, directions were given by the court and both parties wrote to the mediator accordingly.
The mediator referred the parties to the terms of the Mediation Agreement which provided that both parties had agreed not to call her as a witness “in relation to the dispute”. SSEFRA subsequently served a witness summons seeking her attendance at trial.
She then applied to have the witness summons struck out on the basis that her evidence was subject to express provisions of confidentiality and non-attendance pursuant to the Mediation Agreement signed by all parties and that, in any event, her evidence was confidential and/or legally privileged and/or irrelevant.
Mr Justice Ramsey summarised (at paragraph 44) the ‘general’ position as far as confidentiality and privilege in relation to mediation is concerned as follows: (i) mediation proceedings are confidential both as between the parties and as between the parties and the mediator; (ii) they are also covered by “without prejudice” privilege; and (iii) if “another privilege” attaches to documents that are produced by a party and shown to a mediator, that party retains that privilege and it is not generally waived by disclosure to the mediator or by waiver of the ‘without prejudice’ privilege.
Given that both parties had agreed to waive the ‘without prejudice’ privilege, and the mediator had already produced the limited documentation that she had retained, all that remained to be considered, according to the judge, was whether, despite the mediator’s enforceable right to confidentiality, it was “in the interests of justice” that she should be called as a witness.
He decided that, because the allegations of duress concerned what was said and done at the mediation, it was necessary for the mediator to give evidence, and declined to set aside the witness summons.
The judge found that the confidentiality clause in the particular Mediation Agreement did not cover the dispute concerning what happened at the mediation, ie the question of duress, but simply the underlying dispute. However, he held that there was in any case an implied duty of confidentiality that was enforceable by the mediator as well as by the parties.
Even had the clause referred to the mediation itself, Ramsey J said this would not prevent the court retaining a power to go beyond this “in the interests of justice”.
In the event, Farm Assist’s liquidator discontinued the proceedings, so that the trial, which had been scheduled to start in June 2009, did not take place. It is still the case, therefore, that no mediator has given evidence at a trial in England concerning what happened during a mediation subject to English law.
On one level it should not be surprising that there will be limits to the confidentiality of the mediation process. Even in the case of ‘without prejudice’ privilege, there are exceptions that allow the courts to order disclosure of documents and information - for example, where the issue in question is whether or not the negotiations, in fact, resulted in an agreement.
However, given the positive public policy statements in favour of mediation made by the Court of Appeal in Halsey v Milton Keynes General NHS Trust (2004) and elsewhere, it is somewhat alarming that the courts should not be much slower to order a mediator to give evidence in a case such as this. It is essential that mediators, as well as the parties, are able to have confidence in the confidentiality of the process.
It may be that the best way to do this is to recognise the existence of a distinct category of ‘mediation privilege’ that would apply to all those involved in a mediation. Ramsey J appeared to accept in Farm Assist (at paragraph 43) that there was a category of ‘privilege’ that arises in relation to mediation proceedings. However, having expressed this view, he did not develop it further. (See also Brown v Rice & Patel (2007) at paragraph 20).
This is not to say that such a privilege would be impregnable - just as ‘without prejudice’ material can be disclosable in certain cases. However, having a distinct privilege concerning mediation would make its parameters more defined and less susceptible to attack.
Perhaps having given a name - ’mediation privilege’ - to the offspring of their ‘marriage’ to mediation, the courts will be more likely to preserve the stability of their marriage.
Jon Turnbull is a partner at Clyde & Co and a CEDR-accredited mediator