Confidentiality is at the heart of the mediation process. Because parties feel safe from commercial exposure or assumptions of weakness drawn from signals of readiness to compromise, they attend mediations, parties talk directly to each other in a way that litigation makes virtually impossible, they disclose secret positions to the mediator, they indicate willingness to move from strongly expressed litigation positions, they make offers to each other and discuss alternative ways of mending business relationships. Insurers and defendants apologise and empathise with injured claimants and often move huge distances from their on-the-record positions to achieve risk-moderated solutions. None of this would happen if the parties did not feel safe in doing so. There is no doubt that this is a process which works and delivers results.

But we need to be clear both about the present situation in law and whether it needs amendment. The imperative to do so lies in the requirement of the EC Directive on mediation that the UK legislates by 2011 to implement the relatively minimum standards it sets for cross-border mediation. With huge pressure on the legislative timetable, mediation is unlikely to get much Parliamentary time, especially if the topic is limited to the minority activity of cross-border mediation. The changes we make to meet the Directive’s requirements almost certainly will be applicable to mediation generally.

While we may already just about meet the Directive’s requirements on quality, education, and enforceability of mediated outcomes, and while we may feel resistant to suspending limitation periods during mediation (mainly because we fear satellite litigation about when a mediation starts and ends), we cannot escape consideration of the reform of mediation confidentiality. Article 7 (headed Confidentiality of mediation) reads:

1. Given that mediation is intended to take place in a manner which respects confidentiality, Member States shall ensure that, unless the parties agree otherwise, neither mediators nor those involved in the administration of the mediation process shall be compelled to give evidence in civil and commercial judicial proceedings or arbitration regarding information arising out of or in connection with a mediation process, except:
(a) where this is necessary for overriding considerations of public policy of the Member State concerned, in particular when required to ensure the protection of the best interests of children or to prevent harm to the physical or psychological integrity of a person; or
(b) where disclosure of the content of the agreement resulting from mediation is necessary in order to implement or enforce that agreement.

This is a very watered-down version of what appeared in the previous version of the Directive. Mediators and providers were previously placed under an absolute bar over giving evidence about:
• Party invitations or willingness to participate in a mediation;
• Any party’s statements, admissions and settlement proposals made during a mediation;
• Any mediator proposal for settlement and any party’s expression of willingness to accept it; and
• Any document prepared solely for the purpose of a mediation.

The earlier draft went further by providing that any such evidence could not be ordered by a court to be given by anyone else who had attended the mediation (remembering that the mediator is absolutely barred anyway) and if offered should be treated as inadmissible, in both proceedings related to the mediated dispute and also other litigation. It could only be admitted to the extent required to implement or enforce a mediated settlement agreement; for overriding public policy reasons; or where the mediator and the parties agree. It also provided that otherwise admissible evidence would not be rendered inadmissible simply because it was used in a mediation.

So it not only gave absolute protection to mediators from being compelled to give evidence, but also restricted the content of evidence that anyone could give about what happened at the mediation in any later proceedings, a far cry from the qualified protection to mediators given as the only component of mediation confidentiality in the Directive’s final form.

Of course we have no such statutory protection for mediators at all in English law, merely a contractual undertaking by the parties not to call the mediator or mediation provider as a witness. So we need legislation to achieve even this limited requirement. But do we need more, and is the current law clear enough? I suggest that we need to establish a higher standard and greater clarity.

Recently judges have either felt able or been invited to consider what happened at a mediation, something which is unsettling for mediators who are used to assuring parties and their advisers at the outset of the process that what happens at the mediation is off

the record and not available to a judge. As a matter of practice, I now qualify this by saying that it is unavailable unless you all consent to tell the judge what happened, reflecting that the parties have a joint, but not a several, right to waive “without prejudice” privilege. In several recent cases this seems to be what happened. For instance in both Chantry Vellacott v Convergence Group and Malmesbury v Strutt & Parker, the parties told the judge what they had offered each other during the mediation, enabling the judge to find that one of them had been unreasonable in his stance. On the other hand, in Reed Executive v Reed Business , the court would not go behind without prejudice correspondence when considering a costs award, and in Cumbria Waste Management v Baines Wilson, the judge would not permit solicitor defendants to have access to mediation material generated at a previous mediation to settle a dispute between the claimants and DEFRA, because DEFRA declined to waive privilege or their contractual right to confidentiality of the process. In Brown v Rice and Patel, the judge held that he was entitled to look at what happened at a mediation to decide whether settlement terms had been agreed, even though one party and indeed the mediation provider objected, and even though it was clear that no written settlement agreement had been produced, as required by the mediation agreement.

No one wants there to be confusion about what contractual confidentiality and “without prejudice” privilege mean in relation to mediation. It will unsettle what is a very useful process. On the whole there has been no difficulty about it, but harder cases are emerging which call for clarification of the law. To what extent, and from whom, can a court receive evidence to support or defeat a claim by a party that their lawyer under- or over-settled a case in mediation? Can a third party claimant get access to mediated settlement discussions if the parties object, even if affected by the level of settlement (such as a sub-contractor affected by settlement between the client and main contractor, or an earlier lawyer being sued for the difference between the settlement figure and some

We objectively higher appropriate level)? How precisely may a party, who settles on the basis of a material misrepresentation made during a mediation or subject to a threat, unstitch that settlement? Is it possible to sue a negligent mediator when this would involve revealing what the mediator did behind the veil of confidentiality? Is there a distinction between contractual confidentiality – which normally is no bar to court investigation – and “without prejudice” privilege, and if so how do they interact?

Such problems have already emerged for consideration in the US and Australia, in particular, and some fine distinctions are being drawn. The Uniform Mediation Act in the US suggests hearings in camera to sort out such issues before mediation material enters the public domain by judicial decision. This may be a sound approach here too, perhaps invoking the power of the court under CPR 39 to order private hearings.

The debate sparked by the EC Directive’s rather limited aspirations is one we now need to develop for these wider reasons.

The regulatory debate

Another key issue facing the mediation community is how it should be regulated. There is a pressure felt amongst the mediation community to set some standards in place in order to discourage “cowboys” leaping on to a new market bandwagon, and to encourage good practice rather than bad practices so as to create a way for buyers of services to know that they are dealing with someone of at least reasonable quality.

Although there are limited instances of real problems with this flexible, non-binding process, the Civil Mediation Council (CMC) is aiming to set both basic standards of practice requirements for individual mediators and mediation organisations which register with it. Both groups will have to (a) confirm that they meet the standards set, and (b) will have to commit to follow a Code of Good Practice, and (c) to be subject to the CMC independent public complaints scheme. It is a three-part system of supervision that, while being light touch, aims to ensure that reasonable minimum requirements are followed by anyone claiming to operate in a professional way. The CMC will encourage courts and public sector bodies particularly, to ensure that they use registered mediators or organisations, if they are inviting tenders for services or otherwise using mediators or organisations delivering mediation services. In addition to commercial mediation, this scheme will be open to workplace providers of mediation, a development stimulated by recent employment legislation reform.