Mon 16 Apr 2018

Mediation Confidentiality and Deceit

Posted by Heverton.Oliveira

One of the hallmarks of mediation is its emphasis on confidentiality.

The promise that discussions in mediation are confidential and cannot be raised in a later court action (or otherwise) are critical in order to encourage the parties to engage in candid and forthright discussions towards settlement.

So what happens if one party makes statements or produces documents in mediation that are later found to be knowingly inaccurate and "deceitful"?

The British Columbia Supreme Court recently considered this issue in Ramsden v. Ramsden 2013 BCSC 949 May 30, 2013.  In that family case, Master Caldwell was asked to order production of two documents produced by the husband during a mediation which had not resulted in settlement.  The husband objected on the basis that the documents were privileged and not producible since they were created for the mediation process.  The wife argued that the husband breached the mediation agreement (containing confidentiality clauses) and was not able to rely on it since the documents in question were created by the husband knowing they were inaccurate and misleading.

Interestingly, it doesn't appear that the husband denied that the documents were in accurate; he simply argued that the Court was limited to reviewing the revised versions he produced for this application.

Master Caldwell had little trouble ordering production of the documents.  Paragraphs 17 - 20 of his decision are as follows:

[17]         I am fully in agreement with the position and the authorities that mediation is an important option to the litigation process, that it is to be encouraged and that mediation privilege is important to that process; I am also of the view that there is a significant difference between legitimate mediation and attempted ambush by deception.

[18]         There is a reason why parties to a mediation process are required to sign and abide by an agreement to “disclose fully and honestly all the information and documents relevant to the issues being mediated.” The litigation process contains the safeguards of cross-examination and the watchful eye of the court to ferret out truth from fiction. The mediation process relies on honest, full disclosure and the integrity of the system itself, particularly within the context of matrimonial disputes.

[19]         Where, as here, there is every appearance of evasiveness at best and deceit at worst the court must rally to support the integrity of the true mediation process in order that the immediate, as well as future, participants in that process may have assurance that it is a process with legitimacy, not simply a shell game where they “pays their money and takes their chances”. This is all the more the case where the parties have no alternative but to attempt mediation before they can have access to the court system.

[20]         The order sought, requiring the production of and allowing the use of the Form 8 and the employment letter will, in my respectful view, not discourage parties from entering into mediation; it will rather encourage parties to enter into the mediation process knowing that they will be protected by the court in the event of deceptive disclosure by another of the parties. To protect such documents from disclosure would, on the other hand, lend court approval to practices of deception within the mediation process. Should that occur, mediation would cease to have any meaningful role, particularly in resolving matrimonial disputes.

Note how careful Master Caldwell was to emphasize that his order supported rather than undermined the mediation process which he encouraged.

This decision is useful for a number of reasons:

• it affirms the integrity and legitimacy of the mediation process
• mediation confidentiality and settlement privilege cannot be used to protect a participant from the consequences flowing from their failure to act in good faith
• it affirms the useful and prominent role that mediation has as an alternative to litigation (and as a vital part of the litigation process)
• it demonstrates that a court will protect the integrity of the mediation process and will not approve practices of deception within the process

Mediators might want to review their Agreement to Mediate Forms to ensure they include good faith provisions.

Query:  would the result be the same in a commercial case where the Agreement to Mediate did not include positive duties on all parties to disclose fully and honestly all information and documentation?

Finally, a recent Supreme Court of Canada judgment provides a helpful discussion of "settlement privilege" including its purpose (to promote settlement) and its exceptions (including misrepresentation, fraud and undue influence):  Sable Offshore Energy Inc. v. Ameron International Corp. (N.S.C.A., December 22, 2011) (34678).  Thanks to Eugene Meehan for this one!

Your thoughts?

Kari Boyle, Executive Director, Mediate BC Society

Photo by Kristina Flour on Unsplash