The Court held that there may be times when the
confidentiality of mediation must yield to the interests of
Many business people and lawyers distrust mediation. Something
about the idea of sitting down with "the enemy" in a
frank and open exchange, shortly before you square off in court,
just doesn't feel right.
To counter this unease, advocates of mediation have stressed the
security of the process: if it works, everyone's happy; if it
doesn't, the confidentiality of the proceedings is ensured, and
no-one is any the worse for it.
But a recent judgment in the United Kingdom serves as a useful
reminder to Australian lawyers that this assurance is not absolute.
What goes on behind the closed doors of a mediations will not
always be protected from disclosure.
The dispute in Farm Assist Limited (in liquidation) v The
Secretary of State for the Environment, Food and Rural Affairs
(No.2)  EWHC 1102 (TCC) concerned whether a settlement
reached during mediation proceedings had been entered into under
economic duress. In court proceedings, some six years after the
mediation, the High Court was asked to decide whether the mediator
could be compelled to give evidence of what transpired during the
mediation, including in her private conversations with the
The parties had, with the Court's leave, written jointly to
the mediator, asking whether she had any notes, documents or
recollection of the proceedings. Her reply was that she had none,
and that as she conducted about 50 mediations per year, she had no
useful recollection of this one.
Undeterred by this response, the defendant sought to take a
witness statement from the mediator. The mediator referred to the
mediation agreement, in which the parties undertook not to call her
as a witness, and declined to assist unless ordered to do so. When
the defendant subsequently served a witness summons, the mediator
sought to have it set aside.
There was no doubt that the parties had agreed in advance that
the mediation would be confidential. Although the privilege and
confidentiality attaching to "without prejudice"
communications and the mediation as such has been seen as
inviolable, courts may limit the extent to which this applies.
Parties can, of course, waive privilege - and in the Farm
Assist case they had done so. That left the question of
whether there was a further obligation of confidentiality arising
from the mediation agreement. The Court accepted that to protect
the integrity of the mediation process, it was necessary to
recognise a duty of confidentiality owed also to the mediator.
There may be other applicable privileges, but these, the Court
held, could be waived by the parties.
Having recognised that a confidentiality agreement is generally
enforceable by the mediator, the Court went on to hold that there
may be times when this confidentiality must yield to the interests
of justice. The circumstances of the Farm Assist dispute
was one such time. Two of the factors driving this conclusion were
the lack of objection by the parties, and the fact that the
evidence sought concerned the mediation proceedings themselves, and
not the underlying dispute, which is what the confidentiality
clause in the mediation agreement was concerned with.
In Australia, there are legislative provisions (Commonwealth and
State) which govern, and generally protect, the confidentiality of
mediations. But there is a debate about how far that protection
should extend. The tension that arises is between giving parties to
a mediation the confidence to participate freely in the process
knowing that information disclosed is protected, and preventing the
sterilisation of information disclosed in the mediation as evidence
in subsequent litigation even though the other party may have known
about or been able to find out about it independently of the
In Williamson v Schmidt  2 Qd R 317 the
Queensland Supreme Court preferred the view that such evidence was
admissible, although communications that were of a "without
prejudice" nature, such as the attitude of a party to
negotiations, would not be admissible. In passing, the Court
suggested that, as with any other agreement, an agreement reached
in a mediation could be sued on, and that evidence relevant to the
conclusion of the agreement would then be admissible. This
statement, although obiter, would suggest an approach
consistent with that taken by the UK High Court in Farm
None of this means that lawyers should advise against
mediations, or that business people should avoid them. Nor does it
mean that participants in mediation must assume that they cannot
talk in confidence. Confidentiality in mediations will remain the
general rule. But as with most rules, one should always be alive to
the possibility of exceptions.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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