UPDATE: SHOULD MEDIATION ATTENDEES BE BOUND

TO CONFIDENTIALITY?

April 2010

Judgment:

Protec Pacific Pty Limited - v- Brian Cherry - Supreme Court of Victoria, Australia - Mr Justice Habersberger - [2008] VSC 76 - Click here to read the judgment >>

Questions:

Should every individual attendee at a mediation (including expert witnesses, lawyers, employees of parties, students, pupil mediators and so on) be required to sign a confidentiality provision?

Quick overview:

In Protec, an Australian decision, Professor Brian Cherry had acted as expert on behalf of one party in a three-party piece of litigation. When the first party and the second party settled, Professor Cherry assumed his work for the first party was over and he agreed to talk directly to the third party. Protec obtained an injunction restraining Professor Cherry from further communication with the third party.  This case causes a question to be asked: should all attendees at a mediation be individually bound by confidentiality to each other and to the parties?

The Detail:  Professor Cherry was engaged by Protec as an expert in pending litigation between Protec and WMC (Olympic Dam Corporation) Pty Ltd and in a related mediation. Under his appointment, he was expressly bound by confidentiality to Protec, but not to the other parties. Steuler Industriewerke GmbH was joined into the proceedings by WMC. The proceedings between Protec and WMC settled, one term of which settlement was that Protec would sue Steuler. However, Professor Cherry assumed that his involvement was over and he began to talk to Steuler direct. When Protec’s lawyers became aware of what was going on, they sought and obtained an injunction restraining Professor Cherry from further communication with Steuler. In this case, there was no express term as to mutual confidentiality between the parties and the attendees.

In England and Wales, most mediations are conducted in this respect under a provision such as “...each Party, the Mediator and every person involved in the Mediation will keep confidential, and not use for any purpose other than the Mediation or for any ulterior or collateral purpose, all information produced for, during, or as a result of, the Mediation including the fact of any written settlement agreement signed by or on behalf of the Parties and its terms. That agreement is usually signed only by the parties to the dispute, not by every attendee. CEDR’s standard agreement adopts a similar approach. Is that sufficient to bind all the attendees to confidentiality? Given that confidentiality is one of the cornerstones of mediation, we should try to restrict the scope for argument about confidentiality.

In Scotland and many other jurisdictions, including Australia, it is commonplace for every attendee to expressly sign up to mutual obligations of confidentiality. For example, the recently published Model Mediation Agreement (see here >>) of the Chartered Institute of Arbitrators, which body operates internationally, includes the following: “In consideration of my being permitted to attend the Mediation taking place under the provisions of the Agreement to which this Schedule 4 is part, I agree to be personally bound by the without prejudice nature and the confidentiality provisions of the Mediation Rules...” There follows space for every attendee to sign in order to be bound by those obligations.

It seems that England and Wales is out of kilter with most of the mediation world in this respect. It is suggested that a provision such as what follows should become the norm in England and Wales:

“I agree with each of the Parties to this Mediation and the Mediator, that in consideration of my being present at this mediation and/or taking part in any way in its preparation, I will not disclose to any person not expressly authorised in writing by the Parties to receive such information, anything which I have heard or read or seen or produced in the course of this mediation unless obliged by law to do so. Solicitors acting for insurers are hereby authorised to communicate with those insurers about the mediation"

followed by a place for each and every attendee to sign.