5). Do we need legislation to introduce a new “mediation privilege”?  

What then is the case for legislation? I think it is put at its highest as follows. 

(1)           Mediation is at a crucial stage of its development. It offers society enormous benefits in terms of the civilised and cost-effective resolution of disputes between citizens. Mediators perceive that confidentiality plays a vital part in its acceptance by litigants. Whatever the courts may be doing to the law of without prejudice privilege in general mediation needs special protection. The parties are after all being asked to put their cards on the table not only for the other side to  see but also for a complete outsider, the mediator,  to see. 

(2)           If mediations have to begin with a complex lecture about the circumstances in which disclosure might subsequently take place rather than a simple assurance about confidentiality then discussion at mediations will be chilled.   

(3)           The complexity and unpredictability of the three-party cases, the Muller line of cases, is itself sufficient justification for the cleanest  and simplest possible  line to be drawn by Parliament .

(4)           The two common law jurisdictions with a mature involvement with mediation, Australia and the USA, have both legislated extensively on this issue.  Nearer home the Irish Law Commission in the course of an encyclopaedic report  on mediation which has just been published concludes that there is a case for legislation to deal with mediation confidentiality.

(5)           If the law is prepared to afford permanent protection to communications with a legal advisor in order to ensure absolute frankness (as it is)  then it should grant the same protection to  communications with and in the presence of a mediator.    

All of this is compellingly simple. The case for restraint is more complex.  

(1)           Of course these are difficult questions, both in the ordinary without prejudice context and the mediation context.  It is possible quite legitimately to disagree with, for example,  the Muller decision in the three-party case. But to do so is to disagree with the whole of the law on without prejudice. To introduce a mediation-specific change in the law will not solve the wider problem and would make bad law. Certainly some parties might choose mediation over negotiation because of the greater privacy. But some might make the reverse choice because they would not want to be hampered in conducting other subsequent litigation. There would also be endless scope for argument as to whether  a particular communication  was part of a mediation or merely an independent piece of negotiation.

(2)           It is quite wrong to suggest that the courts have engaged in a conscious or even an incompetent attack on these principles. In each case they have faced applications by parties seeking information and evidence  relevant to a bona fide dispute, information and evidence probably not available elsewhere.  The interest of justice in ensuring cases are decided on the best evidence is obvious and clear. If the strong from of mediation privilege sought by some were to be introduced parties might need to be warned as to the consequences of the new law for their own rights. For example, (a)           without the two-party  exceptions you will have no redress for fraud committed during the negotiations and if the written agreement contains a commercially significant error it will be impossible to rectify it.(b)          without the three-party exception  you will be unable to litigate subsequently any issues involving, among other things, the incompetence of the mediator or your own legal representatives committed in the course of the mediation.       The Courts have developed the law of without prejudice privilege incrementally and with care. They apply the rules to mediations as to simple negotiations because mediation is just “facilitated without prejudice negotiation”.  Those of us who have paid for expensive training and are now nurturing our mediation practices may object to the “just” in the last sentence. But can we in all honesty disagree? Why should the rules which apply where  two chief executives negotiate a deal suddenly be inadequate when they are joined by a mediator?     While we mediators might like to think that we perform a magical or priestly function the truth is that we cannot justify the application of a different and specific set of rules.  I recall  that the decisive stage in many of my mediations comes when I leave the two principals to discuss the matter alone and the mediation at that stage is effectively proceeding in my absence.   

(3)           Of course the EU Directive may be taking us to a place where mediations just are given their own discrete rules. But Rolfe J. in the Australian case of AWA v Daniels put it very fairly :  

“…when all this has been said, there is a marked similarity between mediation and other attempts at  achieving settlement. …Each recognises the need for some degree of frankness and disclosure inter partes, which generally transcends what would occur if the matter were fought out in Court; each must proceed on the basis that what is sought to be achieved is a settlement, which, ex hypothesi, involves the giving up by each party of some right to which each may consider it would be entitled if the matter were litigated to  conclusion.“A similarity between the two processes…is that in the course of each the other party may, and probably will, become aware of matters of which it may not have been cognisant previously, or…., a view or belief held may be confirmed as a  fact.”[22]        

(4)           Those arguing for legislation need to be conscious that over-broad protections may attract an attack under the Human Rights Act. The existing without prejudice rules have been held to engage the HRA but in fact to be justifiable in the public interest.[23] Any extended protection would also need to be justifiable. Even in California the constitutional rights of one of the parties can over-ride mediation confidentiality.[24] 

(5)           Some seek to justify a hard-line by arguing that mediators and parties simply need to ensure that enforcement issues do not arise; document your agreements carefully and ensure all representations are recorded as terms of the settlement. These are counsels of perfection and the only certainty is that in a proportion of cases these high standards will not be met. We need to remember too that the majority of the mediations in this country will soon be (if they are not already) conducted mainly by telephone under the County Court schemes. The rules we develop will be useless if they only function properly in well-funded commercial mediations held in city offices with both parties in attendance and secretarial services on hand. Even then inaccuracies and flaws can creep in late in the evening as tired lawyers draft complex agreements.  (6)           Mediators engaged in a great deal of special pleading at the time of the controversy over POCA.[25]  We were told that mediators needed special and specific protection from the statutory duty to disclose if mediation’s growth was not to be stunted. The solution to the problem, if there was a problem, came when the Court of Appeal applied the general law of privilege to the Act in Bowman v Fels [26].  Mediation turned out not to need special treatment or legislation after all. Perhaps the common law should be allowed to work out its own solutions and to explore the implications of Muller case by case.