What's in your agreement to mediate? Confirming confidentiality before the mediation starts

Confidentiality in mediation - caveat emptorConfidentiality stands as a cornerstone of mediation practice. It encourages the resolution of disputes by allowing those in conflict to candidly discuss the issues they face, secure in the knowledge that what they say in the mediator’s presence cannot be held against them later. In pop culture parlance, what happens in Vegas, stays in Vegas.

Thousands of laws, judicial decisions, scholarly articles, and customary practice among neutrals speak to the important role that confidentiality plays and the value that institutions, users of ADR, and mediators themselves place upon it. Disputants reasonably expect that the disclosures they make will remain in the mediator’s confidence. Often mediators themselves establish or reinforce these expectations at the commencement of mediation by making an introductory statement intended to orient the parties to the process and establish basic guidelines for how the mediator and disputants will work together. This introduction usually includes reassurance by the mediator that what is discussed or disclosed will “stay in the room”. People rarely inquire further into what this means precisely; mediators themselves are sometimes overwhelmed by the difficulties in satisfactorily explaining confidentiality in all its complexity.

Despite these expectations, despite the professional and scholarly emphasis on its virtues, confidentiality is vulnerable and not always assured, as a recent case makes plain. In an article on her always informative Negotiation Law Blog, “Mediator Testifies for Insurance Carrier and Court Enforces Mediated Settlement Agreement against Policyholder“, Victoria Pynchon discusses with dismay Palmer v. State Farm General Insurance, a California case in which a mediator filed a declaration in support of an insurer’s motion to enforce a formal settlement agreement that its insured refused to sign as contrary to the handwritten agreement drafted by the mediator during the mediation proceedings. You can read her unflinching criticism of the mediator’s conduct here. This case also prompted complex commercial litigation lawyer Stephen Goldberg to ask on his own blog, “Can Your Mediator Be Your Enemy?“, finding that sometimes, sadly, the answer may be yes.

So what’s a disputant to do to protect themselves up front? Mediators and parties typically enter into a signed agreement known as an agreement to mediate (PDF). Among other matters, this agreement customarily addresses the issue of confidentiality – its scope, exceptions, waiver, and the obligations of those involved to uphold it.  Typically such agreements include language prohibiting the parties from calling the mediator as a witness or from subpoenaing the mediator (PDF). Such a provision is important for mediators, for whom confidentiality – and impartiality – are stock in trade. Most of us who mediate have no wish to be in the position of disclosing information revealed to us in confidence or providing testimony that would most certainly give one side victory over the other.

But confidentiality provisions also protect the parties. Before mediating your dispute, review the language of the agreement to mediate with care. Make sure you know what you’re getting. I know that what I am about to say risks provoking cries of outrage from mediators who see mediation as a refuge from the legal system for ordinary people who shouldn’t have to hire lawyers, but needless to say, if you’re not an attorney or don’t have one representing you, consider getting competent legal advice before signing an agreement to mediate. It is after all a contract. If the Palmer case teaches us anything, it’s that parties – not just mediators – must take care to safeguard confidentiality.

5 responses to “What's in your agreement to mediate? Confirming confidentiality before the mediation starts

  1. In Finland our law of mediation (victim-offender) has a confidentiality writen in it: mediators can’t be sued to testify concerning the case in mediation.

  2. The urge to confirm a mediated settlement agreement (and hence reduce the docket) by trial courts is so strong that we will continue to see cave-outs of all kinds. Consider, for instance, the California appellate court case of Thottam. In that case the Court found the confidentiality waiver so broad that its carve-out for enforcement proceedings waived the right to retain any statements made during the mediation as confidential. See The Trouble with Thottam here: http://www.negotiationlawblog.com/2008/08/articles/adr-updates/new-cases-on-mediation/the-trouble-with-thottam-mediation-confidentiality-at-risk/

    My proposed solution to the overbroad confidentiality agreement was not to sign any agreement that could possibly be interpreted as broad enough to waive the protection whenever one party sought to exclude from evidence a skeletal agreement or term sheet. Other protections include bringing a form agreement on a flash or jump drive to the mediation so that ALL the terms of the parties’ agreement can be memorialized and executed on the spot (no matter how tired everyone is). This solution also prevents “nibbling,” i.e., trying to eliminate or propose “standard” terms that the parties often know at the time of the mediation will cause difficulties down the line but as to which they hope they’ll “have their way” in the following weeks (or months!)

    In all events, mediation advocates and mediators who assist in the drafting of term sheets, should treat all forms of such an agreement with the same degree of caution with which they’d treat a final and binding contract. We’ve yet to see (as far as I know) a malpractice action against the attorney or the mediator based upon the agreement’s inadvertent waiver of confidentiality.

    As the assignment cop said at the beginning of every Hill Street Blues episode – “hey! let’s all be careful out there!”

  3. Vickie, I couldn’t agree more, and you make very sound suggestions for attorneys and their clients.

    Just to be clear, in this post I wasn’t talking about the end product – the settlement agreement; I was referring to the agreement to mediate that begins the mediation and that spells out the rules of engagement with respect to privilege and confidentiality, spelling out how and to what extent mediation communications will be shielded from disclosure later. Too many people sign them without reading them with care. I’m urging caution on the front end – and I appreciate your caution on the back end. I think between us, we’ve got it all covered. Cheers, Vickie.

  4. Diane,

    As if often the case, I was not clear enough in my note about Thottam.

    Unfortunately, the court in that case was interpreting the “front end” agreement, which it read together with the “back end” agreement as a single contract. Because the “front end” confidentiality agreement was incredibly broad, the Court construed the carve out for enforcing the “back end” agreement as being similarly broad.

    If anyone’s sufficiently interested in the topic to understand the opinion and how it relates to confidentiality in California, there’s what amounts to a “brief” of the case at the link I included in my first comment.

    The point for you, me and all mediators and mediation advocates is that there are dangers lurking at both ends. It is unlikely that the parties to the Thottam mediation would have expected at the “front end” that the confidentiality agreement would be read as part of the settlement agreement. But a court eager to get a case off its docket will take any excuse it’s provided. Hence the need for extreme caution on both ends and the need for mediation advocates to stay current on the law of confidentiality in their own states, which changes two to three times a year here in California (a moving target despite the fact that our Supreme Court has addressed the issue three or four times in the past five years). And I’m not even going to BEGIN with federal court mediation protections (or the lack thereof)!




  5. Thanks for clearing that up. I’m on board with you now.

    Sounds like you’ve got quite a mess in California. In Massachusetts, we have a badly drafted mediation confidentiality statute with minimal case law that has done nothing to clear up the confusion. It contains definitional ambiguities; creates a blanket prohibition on in-court disclosure of mediation communications, with no exceptions and not a word about waiver; and may or may not also prohibit out-of-court disclosures. Not surprisingly, most mediators in Massachusetts seem confused as hell about what it means. We had the opportunity to replace this mess with the Uniform Mediation Act or a sensible, well drafted alternative but mediators balked, preferring to cling to the status quo; still not sure what happened.

    Thanks again, Vickie.