Case reiterates importance of confidentiality

A recent case confirms the importance of confidentiality in settlements, including those achieved in mediation, whether or not the mediation contract contains a confidentiality clause.

“If there was no confidentially and mediation wasn't protected, there would be little use for it,” says Clifford Nelson, a former unified family court judge who now is an associate at Riverdale Mediation in Toronto.

In Benson v. Kitt, Justice Patrick J. Monahan of the Superior Court of Justice in Toronto denied Michael Kitt’s request for production of a mediation file related to the issue of child support after his divorce. Kitt sought production of files related to the mediation in 2013 which included the mediator’s file, intake forms and the screening report, which his former wife, Amy Benson, resisted.

“Settlement privilege is a common law rule of evidence that protects communications exchanged by parties as they try to settle a dispute. It enables parties to participate in settlement negotiations without fear that information they disclose will be used against them in litigation, thereby promoting honest and frank discussions and the possibility of achieving settlement. Settlement privilege applies even in the absence of contractual provisions providing for confidentiality,” wrote Justice Monahan, adding that there was, also, in this case, contractual provisions expressly providing that the mediator’s file would be inadmissible in any subsequent litigation.

St. Catharines family lawyer and mediator Sharon Silbert, who did not act in this case, was surprised to see that the argument had been made.

“Settlement privilege is a concept that extends to all kinds of negotiation efforts to reach a settlement in family law matters, not only those  that are covered by a formal agreement to mediate as this one was, but also because as the judge I think rightfully pointed out in the decision, the contents of the notes weren't really relevant,” says Silbert, principal of Sharon B. Silbert Professional Corporation, because the facts the minutes of settlement were not in dispute.

Mediation, she adds, allows participants to bring more personal goals, interests and concerns into the decision-making process. And mediation can also include settlement discussions which she believes can be more effective than efforts to settle through the exchange of formal proposals between counsel because there’s an opportunity to dig into some of the underlying issues, she says.

An important aspect of the process, she adds, is to establish expectations around confidentiality which allows the participants to be open about their concerns and what’s important to them without worrying that the issues might come up in court.

“Mediation forms a fairly significant part of my practice,” she says.

“As part of my own mediation practice I do have clients sign a formal agreement to mediate that does include confidentiality provisions confirming that the matters that are discussed in mediation and my notes, for example, cannot be used in litigation if the issue doesn't get settled. I think that it is reassuring that the judge in this decision pointed out that even in the absence of a formal contract, settlement privilege would likely apply but it still makes sense for mediators to include confidentiality clauses in their mediation contract.”

Nelson, too, was surprised the request was made because “it was such a clear losing proposition” and wonders if litigation was being used here as a cudgel or a weapon.

He says screening prior to mediation is important because it can identify any power imbalances, such as spousal abuse, to ensure substantive part of the mediation process is what it is supposed to be and that is voluntary. Non-disclosure of financial information is another example of an imbalance where all the power falls to one side, and it leaves the other party negotiating and bargaining from the position of no knowledge.

Therefore, he adds, ensuring both parties’ discussions in mediation remain confidential is important in setting up a fair process and is a basic tenet.

He points out that the confidentiality guarantee refers to media but also solicitor-client privilege as well as personal relationships with therapists.

“Not only do you tell people that it is going to be private and confidential and not be used but also you get them to sign contracts saying the same thing,” he says.

"There was so much packed into that case that it almost could have talked about litigation process" but the judge chose not to, he says. "It really covers almost all of the principles that help two people negotiate a case in confidence what they think is confidential is not going to be disclosed down the line."

In Benson v. Kitt, the judge found that confidentiality was covered by the common law principle of settlement privilege, but Nelson says a signed contract provides double protection.

And he questions whether mediation would work if there were no confidentiality.

Indeed, Adam Black, a partner with Torkin Manes LLP in Toronto, believes Justice Monahan’s decision supports the objective of mediation as an alternative dispute resolution process that can result in a settlement satisfactory to both parties.

A settlement in mediation can meet the objective of addressing everyone’s interest, he says.

“The process of mediation requires full and candid discussions between the parties without fear of those discussions finding their way outside out of the four corners of mediation,” he says. “And without the protection, the settlement privilege, that attaches to mediation, the fear is that these candid discussions won't happen. And I think those candid discussions are a necessarily ingredient to a successful mediation.”

Mediation is increasingly being recognized as an important tool which now the courts point to with some regularity. Black points to court-connected mediation services which a judge may recommend to litigants.

“And off the parties go to mediation as a diversion from the litigation process. Certainly there's some focus on ADR even in the courts,” he says.

Although there is always a need to balance rights, which could apply to the issue of privilege, says Black, referring to Monahan’s decision. Exceptions to privilege could come down to a competing interest in interest in disclosure outweighing the public interest in encouraging settlement, he says.