PIERCING THE VEIL OF CONFIDENTIALITY IN MEDIATION TO ENSURE GOOD FAITH PARTICIPATION

• Author: Dorcas Quek ANDERSON LLB (National University of Singapore), LLM (Harvard); Assistant Professor and Della Suantio Fellow, School of Law, Singapore Management University.
• Publication year: 2019
• Citation: (2019) 31 SAcLJ 713
• Published date: 01 December 2019
• Date: 01 December 2019

I. Introduction

1 Confidentiality is the primary philosophical tenet1 of the mediation process, a key feature that distinguishes mediation from litigation. The mediator's opening statement typically assures the parties about the private and confidential nature of the process, so as to encourage effective participation in mediation. There has been judicial affirmation of the need to give protection to the parties to negotiate freely about all issues without the fear of adverse consequences in future

litigation.2 The protection of the mediator from being compelled to give evidence has also been deemed integral in preserving the neutral role of the mediator.3

2 Nevertheless, mediation confidentiality has never been absolute. Paradoxically, an opaque mediation that is immune from public scrutiny may run the risk of threatening the very integrity of the process. The veil of confidentiality has thus been lifted for several purposes, including the assessment of the parties' conduct so as to ensure good faith participation in the mediation. An increasing amount of mediation legislation has emerged across common law jurisdictions to empower the court to sanction conduct evincing bad faith participation. However, piercing the veil of mediation confidentiality in order to monitor mediation behaviour may inadvertently compromise the quintessential characteristic of the mediation process. How then should the legal infrastructure supporting mediation be properly structured to ensure meaningful participation while simultaneously protecting the confidentiality of mediation communications?

3 This article discusses the related issues of mediation confidentiality and good faith participation, with the overarching goal of examining how both aspects of mediation can be concurrently promoted. Part II4 evaluates the common law and legislative approaches to upholding the general confidentiality and inadmissibility of mediation communications. It focuses, in particular, on the interaction between the Singapore Mediation Act5 (“MA”) and common law concepts that have conventionally been relied on to preserve mediation confidentiality. It also proposes ways to ensure that the veil of confidentiality is pierced in highly circumscribed situations. The next part6 examines the controversial question of whether good faith participation within mediation should be mandated. It assesses the potential impact of such a duty on mediation confidentiality and other implications. It further discusses the type of mediation conduct that is expected by the Singapore courts and other professional conduct rules, as well as several common law jurisdictions. This author proposes the articulation of a good faith obligation in order to send the correct signal about the expected conduct within mediation. However, it is also proposed that sanctions be imposed only for breaches of objective

requirements, and the presence of highly egregious conduct within mediation. Otherwise, the veil of confidentiality would be readily lifted, to the overall detriment of the mediation process.

II. Confidentiality in mediation

A. Confidentiality and competing interests

4 Confidentiality within mediation can be said to be a double-edged sword. Although it encourages candid negotiations, absolute confidentiality within mediation could also be a cloak for unfair treatment of vulnerable parties. Without judicial oversight, the parties' consensual agreement may also harm the interests of third parties. It has been further argued that the veil of confidentiality prevents challenges to the fairness of the mediation process, such as the breach of the mediator's ethical duties or the coercion of parties in reaching a settlement. The need to monitor the process is also much greater if parties' participation in mediation is mandated.

5 Furthermore, although mediation is deemed to be an out-of-court process that is free from legal formalities, this mode of dispute resolution requires the courts' assistance in order to flourish. Evidence of mediated settlement agreements may need to be disclosed for the enforcement of mediated settlement agreements. A party cannot, in the name of confidentiality, blatantly ignore its obligations under the mediated settlement.7 In sum, the veil of confidentiality has to be pierced in limited circumstances to support the mediation process and affirm the effectiveness of mediation as a mode of settlement. Mediation confidentiality has to be balanced with the need to maintain the integrity and fairness of mediation.

6 Nevertheless, the interest in maintaining fairness within mediation has resulted in an ever-increasing list of circumstances justifying the lifting of the veil of confidentiality. There is the risk of the exception becoming the norm, and mediation being a porous process that is frequently subjected to public scrutiny. Many jurisdictions have grappled with balancing confidentiality with other competing interests, and Singapore is no exception. The next part proceeds to discuss Singapore's approach in ensuring that the veil of confidentiality is pierced only in limited and clearly defined circumstances.8

B. Pre-legislation approach to confidentiality and admissibility of mediation communications

7 Prior to the enactment of the Mediation Act in Singapore in 2017, the confidentiality of mediation communications was protected by a mixture of common law privileges and contractual protections, a situation which the Senior Minister of State for Law described as “thoroughly confusing to the individual mediation user”.9 In general, the law has largely relied on two overlapping concepts of confidentiality and admissibility. “Confidentiality” refers to the obligation of all the parties not to disclose mediation communications to any third party. Mediation confidentiality is premised on two sources – an express obligation of confidentiality in the mediation contract, and implied confidentiality.10 The duty of confidentiality can only be breached when all the parties, including the mediator, collectively waive it. However, regardless of any waiver, the court may still order the disclosure of mediation communications when it is “in the interest of justice” to do so.11 Hence, confidentiality per se does not preclude the mediation communications from being admissible in court. In this respect, English commentator Bartlett observed that contractual confidentiality “does not itself provide a shield against a witness summons [of the mediator] or determine the issue of admissibility”.12

8 By contrast, the concept of admissibility is an evidential one, referring to situations when mediation communications may be properly admitted in court. Both the English and Singapore courts have relied heavily on the “without prejudice” rule to decide on admissibility. Under this principle, statements or documents used in the course of negotiations for settlement purposes are not admissible as evidence.13 In the English Court of Appeal decision of Aird v Prime Meridian Ltd,14 May LJ affirmed the application of the without prejudice privilege to mediation communications.15

9 Although the without privilege rule provides greater protection to mediation communications than implied or contractual confidentiality, it is fraught with uncertainty and inadequacies. In Singapore, there is some ambivalence concerning the sources of the rule. It appears to be derived from both common law and s 23 of the Evidence Act,16 which provides that:

… no admission is relevant if it is made either upon an express condition that evidence of it is not to be given, or under circumstances from which the court can infer that the parties agreed together that evidence of it should not be given.

This section applies the “without prejudice” rule only to the parties involved in the negotiations.17 However, the Singapore Court of Appeal has acknowledged that common law also extends the rule to third parties.18 As such, the scope of the applicability of the rule is not altogether clear.

10 In addition, the concurrent reliance on common law and the Evidence Act has resulted in uncertainty about whether the rule is synonymous with a privilege held by the parties. Pinsler has noted that s 23 is technically not a privilege because it only states that such admission is not relevant. Admissibility of relevant facts is determined by law and not subject to the party's intention, whereas the doctrine of privilege is concerned with a party's right to withhold information, a right he can maintain or abandon through consent or waiver. Nonetheless, Pinsler posits that the principle of waiver is still applicable in the context of communications for the purpose of settlement.19 Furthermore, the Court of Appeal in Mariwu Industrial Co (S) Pte Ltd v Dextra Asia Co Ltd20 expressly referred to a privilege while discussing the without prejudice rule.21 It is therefore arguable that the Singapore courts have treated s 23 as equivalent to a common law privilege despite the dissonance between legislation and common law.

11 In the event that the rule indeed operates as a common law privilege, the privilege may still fall short of providing sufficient protection of mediation communications. It appears that only the

parties, and not the mediator, may waive the privilege protecting their “without prejudice” communications.22 It is not a privilege owned by the mediator. In Farm Assist Ltd v Secretary of State for the Environment, Food and Rural Affairs (No 2)23 (“Farm Assist”), the court ordered the mediator to be a witness because the disputing parties had waived their privilege, and the court deemed the disclosure to be in the interest of justice. The parties had agreed in their mediation agreement not to call the mediator as a witness in any litigation and arbitration relating to the dispute. Despite this contractual clause, Ramsey J decided that the parties were entitled to and did waive their...