Confidentiality and Privilege in Mediation

The General Rule

Mediation is a dispute resolution method in which the parties are assisted by a third person, the mediator, who attempts to streamline the process of dispute resolution and help the parties reach an amicable settlement. In England and Wales, mediation is majorly entrenched in the Civil Procedure Rules and EU directives on Mediation that govern the conduct of civil cases. There is link between mediation and common law rules of privilege and confidentiality, which informs the role and qualities of a mediator. Unlike litigation, parties engaged in mediation have the benefit of a privilege and confidentiality of the discussions between then in pursuit of a settlement and this incentivises them to opt for this tool. As a consequence, the general rule is that mediation proceedings are confidential and privileged and parties express themselves freely knowing that whatever they say may not be used against them later in court or elsewhere. The ‘without prejudice rule’ was first set in Rush and Tompkins Ltd v The Greater London Council where it was held that negotiations genuinely aimed at settlement of a dispute must be excluded from evidence in litigation between the parties. In particular, the rule prescribes that documents are not only inadmissible in evidence but also immune from disclosure to third parties. Foundationally, the above rule is justified on the grounds of public policy and contractual principles as set out by Walker LJ and Hoffman LJ respectively. However, just like all general rules, there are exceptions to the rule of privilege and confidentiality in mediation.

Exceptions

Parties engaged in mediation are free to waive privilege and confidentiality by consent of all the parties. The effect of this waiver is to render admissible before court all communications, documents and admissions made by a party during pre-trial negotiations. In essence, it is one of the ways of precluding a party from hiding behind the veil of confidentiality to cause hardship to the other or deal unfairly. As early as 1889, Esher MR had suggested that it is a good rule to not to look at anything whether oral or written exchanged between parties in a mediation without the consent of both parties. Similar sentiments have since been echoed in recent cases where judicial officers have reiterated that it is does not suffice that one party to the proceeding seeks to open up confidential communication. In Farm Assist Ltd (In Liquidation) v Secretary of State for Environment, Food and Rural Affairs, Ramsey J was of the opinion that that parties are free to waive the privilege afforded to information shared between them during mediation so long as there is concurrence of both parties. Additionally, without prejudice communications between the parties to mediation may be admitted to evidence in line with the exceptions set out in Unilever plc v The Proctor &Gamble Co. The rationale for lifting the veil of privilege imposed by public policy is that there are instances when a party may abuse the protection. The first exception concerns the existence of a settlement agreement or a concluded agreement. In this instance, it could be that the parties have reached a settlement and reduced it into writing but then a dispute arises as to whether a settlement was concluded. Consequently, the court will make a determination by looking at the terms of the agreement as recorded. In Brown v Rice, the court emphasised the need to refer to the concluded agreement in question because without it the court would not be placed in a position to make an informed decision as to whether there was any settlement reached between the parties. Interestingly, there are mediation agreements that contain clauses providing the document is ‘subject to privilege’ or ‘without prejudice’. The pertinent question in such instance is whether the court can proceed to admit the agreement into evidence or it is barred by the veil of confidentiality. This issue was addressed in the case of Tomlin v Standard Telephones and Cables Ltd where the court ruled that it was entitled to look at the correspondence between the parties for purposes of ascertaining a binding agreement had been reached, despite the words ‘without prejudice’ being on the letters in question. In essence, the court was persuaded to look at the substance of the matter rather than the formalities exhibited in the content of the documents. Therefore, it appears that the presence of the words without prejudice on any documents or correspondence relating to the concluded agreement or the settlement itself will not preclude their admissibility for purposes of ascertaining the existence of a concluded agreement.

The second exception premised is activated on instances of perjury, blackmail or unambiguous impropriety. For instance if one party makes false statement when he is testifying, the other party may rely on the without prejudice communications with that party as evidence of his perjury. This exception has been considered extensively by Patten J, stating that it will apply where the without prejudice occasion is abused by the making of threats or unambiguous impropriety. The third exception is based on estoppel where despite there being no concluded agreement, one party makes clear statement in privileged communications upon which the other reasonably relies. It follows that the party that placed reliance on the statement can bring into evidence the privileged communication. In Cutts v Head, the court considered the fourth exception regarding costs and stated that if one party prevails in his claim against another, he can rely upon privileged communications except as to costs as evidence for the court to consider when assessing costs. Delay has also been considered by the courts as another element of exception to the general rule so that if one party files an application to dismiss the other’s claim for want of prosecution, then that party may rely on the fact that privileged communications took place and the relevant dates as evidence to explain the delay.in other circumstances, the court will allow an exception for reasonableness where one party wants to set aside his settlement with another, the other party may rely upon privileged communications with him as proof of the reasonableness of the settlement. Further, the case of Underwood v Cox provides another exception to the general rule as fraud, misrepresentation and undue influence. The last exception is associated with rectification of a settlement agreement and a party may produce privileged communications to show that there is an error somewhere necessitating a correction. The upshot of the foregoing is that there are indeed several exceptions to the privilege and confidentiality concept in mediation that negates the presumption that confidentiality is absolute mediation. Reasonably, these exceptions are majorly in place to help parties that may be unfairly prejudiced by the actions of their counterparts who may want to take advantage.

Self-Reflection

After the mediation role play we undertook in the workshop session I gained a lot of insight into mediation as an alternative dispute resolution tool. The setting was appropriate and conveyed the learning outcomes in a practical but familiar and relatable manner. Using Atkins and Murphy model of 1993, I was able experience deeper reflections and build on my previous experience with mediation practices. However, the model may not be suitable for quick reflections on the go for beginners, but for me it was the most appropriate having undertaken self-reflection in other areas. Out of the role play I learned that mediation is more of science and art, in addition to being taught to be a good mediator. A good mediator should inspire trust in the parties by exhibiting the quality of being trustworthy. Clients that are interested in mediation want to be assured that the mediator will be confidential especially with regard to communications between the parties during the negotiations. The existence of this attribute in a mediator, as I learnt from the role play, will entice parties to open up and give frank and full disclosure that will help in expeditious resolution of the underlying dispute. An ideal mediator should be approachable and this quality is exhibited by a person who is respectful, friendly and emphatic. A good mediator should be capable of listening carefully to the parties’ issues, appreciating their emotions and coming across as genuinely concerned with best interest of all parties involved. While empathy will assist a mediator to make parties understand each other’s point of view, emotional intelligence is useful in understanding the prevailing emotions of each party. In almost all professions dedication is a basic quality and mediation is no exception. Like judicial officers, mediators should exhibit competence and diligence in their work so that they can deliver quality work to their clients who are the parties. Perceptiveness is a problem solving attribute that aids the mediator in quickly understanding the situation of the parties and its complexities then providing options after analysing the issues and identifying the risk.

Impartiality is one of the most important attributes and skills that learnt from the role play. It is an indispensable skill that affects the work of a mediator and even the perception of parties. Because justice must not only be done but also be seen to be done, a mediator must exhibit qualities that show that he will not make partial decisions. A mediator’s role is limited to bringing the parties to the table and facilitates the process of mediation but this role requires that one acts in a way that does not favour one party or the other. This attribute is also connected with that of propriety which requires that a mediator should not act even when not in office in manner that may bring a perception of impropriety. For instance, a mediator should not out of his work have personal relationship with either of the parties lest it affects his judgment or brings out a perception of bias against one of the parties. A good mediator should exude objectivity and self-control. This skill is useful when the mediator like in the role play has to evaluate information obtained from the parties. During the questioning session, the mediator should remain objective and dispassionate despite the emotional reactions that he may experience at times. In the same vein, he must exceptional self-control especially in situations where it is appropriate to avoid displays of sympathy, weariness, anger or irritation. The appearance and demeanour of a mediator also means a lot to the parties. His personal appearance may influence the attitude of parties towards the mediation session. Therefore he ought to exhibit an appearance of fairness efficiency and strength. In the end the role play session was quite useful and I learnt from other students from participating in it.

Is arbitral award final?

According to the Arbitration Act 1996, an award made by a tribunal pursuant to an arbitration agreement is final and binding both on the parties and on any other persons claiming through or under them. The only instance when an arbitral award will be considered not to be binding is when the parties themselves have agreed otherwise that it will not be biding upon them. However, the finality and binding nature of such an award does not affect the right any party to the arbitration agreement to challenge such an award. Parties to an arbitration agreement who have obtained an award from a tribunal can enforce it with leave of court in the same manner as court judgment or order. Statistics from English courts indicate that challenges to arbitral awards are rarely successful. Out of 274 claims brought to the English Commercial court in the last three years preceding March 2018 under section 68 and 69 of the Act, only 6 were successful. Despite the high chances of failure in challenging arbitral awards, the above statistics show that there are indeed chances of success albeit slim. It follows that arbitral awards are not really final and binding on the parties per se. in particular an arbitral award can be challenged under section 68 for on the grounds of serious irregularity and under section 69 for appeal on a point of law. Therefore, the statement as espoused by section 58 is not entirely true because an arbitral award can actually be challenged and set aside for limited reasons. The ensuing discussion will explore the different instances when an arbitral ward can be challenged. Nathan Hill observes that the manner in which the UK arbitration law deals with issue of setting aside arbitral wards is quite different from the UNCITRAL Model Law on International Commercial Arbitration. The Arbitration Act although largely influenced by the Model law still has a different approach to challenges to an arbitral award. While the Model law does not make provisions for setting aside an award the Arbitration Act provides that an award may be set aside on the basis that the arbitral tribunal made an error of English law. Secondly, separates grounds for setting aside into jurisdictional defects and procedural and other defects respectively.In section 68 the Act lists twelve procedural ground on which an award can be set aside unlike Model law which has only two.

In Essex County Council v Premier Recycling Ltd, an English High Court held that the words ‘final and binding’ in an arbitration clause could not in itself exclude the right to appeal on an award made by a tribunal. Therefore, a party that challenges the jurisdiction of the court to hear an appeal on the basis that the arbitral award is conclusive, final and binding would mostly likely fail in the light of the above decision. In a similar case, the court relied on the above case to dismiss one party’s argument that section 69(1) ousted the jurisdiction of the court to hear the appeal because the award was final, conclusive and binding. Commentators have criticised these decision as a danger to the arbitration tool since it constrains autonomy of the process. Equally, there are others who have termed the decisions as central to ensuring that procedural safeguards are in place to protect the participants of an arbitration process. Recent cases like P v D Ors highlights the willingness of English courts to set aside an arbitral awards when serious matters relating to procedures are involved. In this case the court set aside an award by London Court of International Arbitration (LCIA) under section 68 on the basis that the Tribunal failed to deal with all the issues including not considering the claimant’s contribution claim in the proceedings. As a result of that claim and errors identified in the award by the Tribunal the court was satisfied that substantial justice had been occasioned hence it set aside the award and remitted to the Tribunal for correction. Another significant court decision in 2017 was when a Commercial Court found that since the applicant had been denied opportunity to make submissions, the decision of an arbitrator on costs could be challenged for serious irregularity under section 68 of the Arbitration Act. More importantly, this decision was momentous since it showed that courts may intervene in the conduct of arbitration for purposes of upholding the integrity of the process and facilitating equal treatment of parties. Despite the court’s reluctance to set aside awards any envisaged grounds in the Arbitration Act, there are case that prove that instances of serious irregularity will warrant the court’s intervention. In RJ and another v HB, the court in 2018 set aside an award under section 68 of Arbitration Act for serious irregularity after finding that the arbitrator made an award that was not sought by any of the parties, without the required notice under section 33. In the end it is clear that an arbitral award is not necessarily conclusive, final and binding on the parties. For different reasons allowed under the Arbitration Act a party can apply to court to have the award set aside or remitted to the tribunal for reconsideration. Be that as it may, it is to be noted that it is the province of parties to decide in their arbitration agreement whether they would want to, in future, appeal the award.

Bibliography

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