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Family Mediation: Piercing the cloak of confidentiality

Deborah Eaton QC, 1 King's Bench Walk, Hassan Khan, 4 Paper Buildings and Mark Irving, Harbottle & Lewis examine whether mediation agreements are always susceptible to privilege, following Mr Justice Williams’s judgment in BL v TC & OD [2017] EWHC 3363.

Deborah Eaton QC, 1 King's Bench Walk, Hassan Khan, barrister, 4 Paper Buildings and Mark Irving, partner, Harbottle & Lewis


It is often assumed that the 'cloak of confidentiality' in family mediation cases is impervious to attack. Many family mediators and parties to such mediations continue to operate under this assumption.

But are they safe to do so?

As the law currently stands, broadly, the answer to this question is yes. In the majority of cases the cloak of confidentiality will be preserved. Family mediators and those who participate in mediation can be reassured that, if the mediation fails, what is said within the mediation will remain confidential and cannot be used by one party against the other in any impending litigation.

This general rule was confirmed by Sir Thomas Bingham M.R. in Re D (Minors) (Conciliation: Disclosure of Information) [1993] Fam 231, when he stated that "To what extent, if at all, may evidence be given in proceedings under the Children Act 1989 of statements made by one or other of the parties in the course of meetings held or communications made for the purpose of reconciliation, mediation or conciliation? That is the important question raised by this appeal. The ordinary rule is, as the parties agree, that evidence of such statements may not be given. But the parties do not agree whether the rule is absolute or subject to exceptions; and if it is subject to exceptions they do not agree what those exceptions are."

In child abduction cases, parties often engage in mediation. The Guide to Good Practice for Mediations under the 1980 Hague Convention, paragraph 205 extols the virtues of confidentiality of communications relating to mediation including creating an atmosphere of trust and the importance of their concessions not being used against them. In a typical child abduction case a left behind parent is likely to feel reluctant to indicate that he or she could agree to the child remaining in the other jurisdiction, if he or she fears that this might be interpreted as 'acquiescence' within the meaning of Article 13(1)(a).

Most recently the authors appeared in the case of BL v TC & OD [2017] EWHC 3363, when Mr Justice Williams made obiter comments in the aftermath of approving a consent order in a child abduction case.

"I have not been called upon to determine the legal issues surrounding the withdrawing of the veil of confidentiality. I would say that I consider there is a strong argument for holding that mediation in the context of 1980 Hague Convention proceedings, with the international dimension that it contains, with the peculiar intensity of the post-abduction environment, and where the cloak of confidentiality arises not simply from inference but from express terms, will not necessarily attract the Unilever plc v The Procter & Gamble Co [2000] 1 WLR 2436 exceptions but rather would be immune from disclosure in all circumstances, save for those identified in Re D (Minors) (Conciliation: Privilege) [1993] 1 FLR 932, CA and accepted within the mediation framework itself, namely disclosure might be justified where there was a risk of significant harm to a child. Insofar as I can, in this limited context, I would want to reassure mediators that the cloak of confidentiality remains as securely fastened as ever it was."

In this article we suggest that this is not the correct approach and the Unilever exceptions apply equally to family law cases.


Mediation in general
The law does not accord any special status to mediation agreements and such agreements are governed by the common law "without prejudice" rule. In Brown v Rice [2008] FSR 3 paras 21-22 the court considered the fact that the parties enter mediation "… does not confer on them a status distinct from any other without prejudice communications such as to take them outside the scope of the exception or otherwise to render them inadmissible." Mediation agreements are simply a form of assisted "without prejudice" negotiation.


The "without prejudice" rule
The without prejudice rule broadly applies to exclude all negotiations genuinely aimed at settlement of a dispute, whether made orally or in writing, from evidence in litigation between the parties – per Lord Griffiths in Rush v Tompkins Ltd v The Greater London Council [1989] AC 1280, at 1299.

The effect of the "without prejudice" rule is twofold: first, documents covered by privilege will not be admissible in evidence and second, the documents are immune from disclosure to other parties – Rush v Tompkins Ltd v The Greater London Council [1989] AC 1280

The without prejudice rule is founded on two main justifications. The first is one of public policy: to encourage parties to negotiate and settle their disputes. The second is based on contractual principles, namely as Hoffman LJ put it in Muller v Linsley & Mortimer [1996] P.N.L.R 74 "an implied agreement arising out of what is commonly said to be the consequences of offering or agreeing to negotiate without prejudice."


Public policy
There have been many expressions of the importance of the public policy principle. and Robert Walker LJ in Unilever PLC v. The Procter & Gamble Co. [2001] 1 W.L.R. 2436, 2443, described it thus: "… if not sacred … has a wide and compelling effect".

In Cutts v Head [1984] Ch. 290 at 306, Oliver LJ espoused that: "… parties should be encouraged so far as possible to settle their disputes without resort to litigation and should not be discouraged by the knowledge that anything that is said in the course of such negotiations (and that includes, of course, as much the failure to reply to an offer as an actual reply) may be used to their prejudice in the course of the proceedings. They should, as it was expressed by Clauson J. in Scott Paper Co. v. Drayton Paper Works Ltd. (1927) 44 R.P.C. 151, 156, be encouraged fully and frankly to put their cards on the table.... The public policy justification, in truth, essentially rests on the desirability of preventing statements or offers made in the course of negotiations for settlement being brought before the court of trial as admissions on the question of liability."

In Unilever PLC v. The Procter & Gamble Co. [2001] 1 W.L.R. 2436 Robert Walker LJ said

"… the without prejudice rule is founded partly in public policy and partly in the agreement of the parties. They … show that the protection of admissions against interest is the most important practical effect of the rule. But to dissect out identifiable admissions and withhold protection from the rest of without prejudice communications (except for a special reason) would not only create huge practical difficulties but would be contrary to the underlying objective of giving protection to the parties, in the words of Lord Griffiths in the Rush & Tompkins case [1989] A.C. 1280, 1300: "to speak freely about all issues in the litigation both factual and legal when seeking compromise and, for the purpose of establishing a basis of compromise, admitting certain facts." Parties cannot speak freely at a without prejudice meeting if they must constantly monitor every sentence, with lawyers or patent agents sitting at their shoulders as minders."

Expressions of this public policy principle may have particular resonance in family disputes, a view shared by Sir Thomas Bingham M.R. in Re D (Minors) (Conciliation: Disclosure of Information) [1993] Fam 231:

"It is notorious that when marriages break down the victims include not only the spouses themselves but also, and particularly, their children, who are swept into the vortex of their parents' embittered emotions at the cost of much unhappiness and, not infrequently, lasting psychological damage. It is also notorious that when marriages break down and problems arise affecting the children, resolution of these problems through the ordinary processes of adversarial litigation often leads to exaggerated accusations and counter-accusations with, in consequence, an exacerbation of feelings and a heightening of tension. In the interests of the children there is everything to be gained and nothing lost if the parents can be induced, through the good offices of an intermediary, to compose their differences so as to achieve a working compromise which may be wholly welcome to neither parent but acceptable to each. This interest is shared by the public at large, which not only wishes to spare children unnecessary suffering but also to reduce the great burden of cost and delay which contested litigation of this kind necessarily imposes on an already overloaded legal system.

It is, however, plain that parents will not succeed in composing their differences or achieving a working compromise through the good offices of a third party unless they approach the process of conciliation in an open and unreserved manner, prepared to give as well as to take and to make admissions and conciliatory gestures with a view to reaching an accord. If the parties remain in their entrenched positions no armistice will be reached in no man's land. But it is plain that the parties will not make admissions or conciliatory gestures, or dilute their claims, or venture out of their entrenched positions unless they can be confident that their concessions and admissions cannot be used as weapons against them if conciliation fails and full-blooded litigation follows. To be effective, any attempt at conciliation must be off the record. But it does not follow that this is a rule which permits of no exceptions at all, even where the safety of a child is at stake."

Exceptions to the without prejudice rule
The general rule is subject to two main exceptions: where there has been waiver of privilege or where privilege is overridden by one of the exemptions in the Unilever case. These exceptions prevent a party from hiding behind the veil of confidentiality and will render as admissible before a court any communications, including admissions made by a party during pre-trial negotiations.


Waiver

There is ample authority for the proposition that without prejudice privilege can only be waived with the consent of both parties. Over 100 years ago in Walker v Wilsher (1889) 23 Q.B.D. 335, 336-337 Lord Esher MR said this: "It is, I think, a good rule to say that nothing which is written or said without prejudice should be looked at without the consent of both parties.." More recently Smith LJ in Brunel University v Vaseghi [2007] IRLR 592 re-iterated the point: "It is not enough for one party to seek to open up the privileged communication. Waiver must be consensual. If one party seeks to adduce evidence of a privileged discussion the other party may agree to this course of conduct or may object." Similar expressions of this principle were confirmed by Ramsey J. in Farm Assist Ltd (In Liquidation) v Secretary of State for the Environment, Food and Rural Affairs [2009] EWHC 1102, [44]


The Unilever exemptions

Robert Walker LJ set out a number of exemptions, when despite the existence of "without prejudice" negotiations, the rule would not prevent the admission into evidence of what the parties said or wrote:

(1) Where 'without prejudice' communications have resulted in a concluded agreement.

(2) Misrepresentation, fraud or undue influence.

(3) Estoppel – even if there is no concluded compromise, a clear statement which is made by one party to negotiations and on which the other party is intended to act and does in fact act.

(4) Where exclusion of evidence would act as a cloak for perjury, blackmail or other unambiguous impropriety.

(5) To explain delay or apparent acquiescence.

(6) Where the issue is that the claimant had acted reasonably to mitigate his loss in his conduct.

(7) An offer that is expressly made "without prejudice as to costs".

(8) In matrimonial cases there has developed a distinct privilege extending to communications received in confidence with a view to matrimonial conciliation – Re D (Minors) (Conciliation: Disclosure of Information) [1993] Fam 231

The rationale behind these exemptions is to prevent abuse of the "without prejudice" rule by a party. In certain cases, "the veil imposed by public policy may have to be pulled aside, even so as to disclose admissions, in cases where the protection afforded by the rule has been unequivocally abused"


Family mediations: piercing the cloak of confidentiality
In Re D Sir Thomas Bingham M.R. acknowledged that the privilege arising from mediation is not absolute, even in a children's case, although the exceptions he identified were limited to where the parties had waived privilege by joint agreement or "in the very unusual case where a statement is made clearly indicating that the maker has in the past caused or is likely in the future to cause serious harm to the well-being of a child".

This principle appears to have been given effect by paragraph 5.11 of Practice Direction 12B FPR 2010 in the context of Mediation Information and Assessment Meetings (MIAM):

"Mediation is a confidential process; none of the parties to the mediation may provide information to the court as to the content of any discussions held in the mediation and/or the reasons why agreement was not reached. Similarly, the mediator may not provide such information, unless the mediator considers that a safeguarding issue arises."

Interestingly, His Lordship did not consider it "fruitful" to debate the relationship of this conciliation privilege with the more familiar head of "without prejudice" privilege, although acknowledged that the underlying rationale was similar. He did not consider that the rules that were applicable to "without prejudice" privilege necessarily applied to the privilege arising from a conciliation. There is no clear reason why this should be so.

What is clear is that His Lordship sought to guard against the situation where conciliation had failed, and one party sought to admit evidence of the conciliation in an attempt to show that the other party had not shown a genuine willingness to compromise. In this situation he said: "Wherever an attempt to conciliate has failed, both parties are likely to attribute the failure to the intransigence of the other. To admit such an exception would reduce the privilege to a misleading shadow."

The underlying rationale for this approach is obvious. There is a strong desire to protect children from harm through litigation and this is better achieved by negotiations taking place outside the court room. If this is to have any integrity and unless parties can speak freely, without weakening their position in contested litigation if that becomes necessary, the conciliation will be undermined and doomed to fail. Ultimately parties may be unlikely to avail themselves of collaborative solutions.

This underlying rationale was endorsed by Williams J. in BL v TC & OD [2017] EWHC 3363.


Aside from the exceptions identified by Sir Thomas Bingham M.R. in Re D the authors contend that the Unilever exemptions apply equally to family mediations as they do to mediations conducted in other civil jurisdictions as:

(i) There is no distinction between privilege arising from mediation and that which arises from "without prejudice" privilege. The only difference is that mediation is a type of assisted "without prejudice" negotiation as confirmed in Brown v Rice.

(ii) The law cannot stand still some 10 years after Re D, the Unilever case introduced further exceptions to the "without prejudice" rule which are of general applicability.

(iii) The exemptions identified in the Unilever case are in themselves limited to exceptional circumstances, will be rarely deployed and are unlikely to undermine the public policy principle.

The views of Lord Sumption in Prest v Petrodel Resources Ltd and others [2013] 2 A.C. 415 are perhaps pertinent: "courts exercising family jurisdiction do not occupy a desert island in which general legal concepts are suspended or mean something different."

In short, family law must yield to the general common law.


Waiver
The most obvious method of waiving a mediation agreement is when the parties agree to convert its contents into a consent order following the receipt of legal advice. However, simply because a clearly concluded agreement is contained within a mediation document rather than a consent order does not afford it special protection – we say more about this under the exception of concluded agreements.

The more likely and contentious scenarios are where either one party inadvertently waives privilege or deliberately deploys "without prejudice" material considered in mediation, before the court.

In the former scenario a party may have impliedly waived privilege. The party responsible for the disclosure may have some recourse by relying on being a self- represented litigant and in cases where the mistake was obvious. This will of course depend on the circumstances of the case – Guinness Peat v Fitzroy Robinson [1987] 1 WLR 1027. The state of mind of the person said to have waived privilege may be important – see Pizzey v Ford Motor Co Ltd [1994] PIQR P15, P21, CA. Mann LJ.

"It is of the utmost importance in the context of litigation that a party should be able to rely on the discovery of his adversary. Exceptions to that ability must not extend beyond fraud and mistake. Cases of mistake are stringently confined to those which are obvious, that is to say those which are evident. This excites the question: Evident to whom? The answer must be to the recipient of the discovery. If the mistake was evident to that person then the exception applies, but what of the case where it was not evident but would have been evident to a reasonable person with the qualities of the recipient? In this context the law ought not to give an advantage to obtusity, and if the recipient ought to have realised that a mistake was evident then the exception applies."

The latter scenario is akin to the law that would pertain where legal professional privilege was waived. In Somatra Ltd v Sinclair Roche & Temperley [2000] 1 WLR 2453, para 30, Clarke LJ stated that: "Fairness requires that where a party deploys privileged or without prejudice material as part of its case at a trial the other party should be entitled, in the one case, to see the whole of the privileged document and, in the other case, to rely upon the other without prejudice material which came into existence as part of the same without prejudice process."

The effect of waiver may entitle the other party to rely on the whole of the without prejudice material generated within the mediation process.


Concluded agreements
There will be cases where mediation results in settlement and the terms of that settlement are recorded in writing. Where there is a dispute between the parties as to whether settlement has been reached, how is the court to determine the dispute? The only way this can be achieved is to look at the terms of the mediation agreement itself. In Brown v Rice [2008] F.S.R. 3 the court made clear that "… without considering the communications in question it would be impossible to decide whether there was a concluded settlement agreement or not."

Many mediation agreements or summaries contain preambles and express provisions providing the document is "without prejudice" or "subject to privilege." Are such caveats sufficient to maintain the veil of confidentiality?

In Tomlin v Standard Telephones and Cables Ltd [1969] 1 WLR 1378, 1382G the court in the context of whether the parties had reached a binding agreement, considered that it was entitled to look at correspondence, notwithstanding the words "without prejudice" on the face of the letters, in order to ascertain whether a binding agreement had been reached. The question was clearly one of substance rather than form.

"A point which arises is that all the letters written by the agent of the insurance company bore the words "without prejudice." The point is taken that, by reason of those words, there could not be any binding agreement between the parties, and it was said, indeed, on behalf of the defendants that the letters were not admissible. I feel no doubt, as the judge felt no doubt, that the letters were admissible, because the point was whether there had been a concluded agreement of any kind between the parties in accordance with that correspondence and it would be impossible to decide whether there was a concluded agreement or not unless one looked at the correspondence.

Having said that, the presence of the words "without prejudice" will give rise to a 'rebuttable presumption' that a document was presumed to be for negotiating purposes – Bradford & Bingley v Rashid [2006] 1 WLR 2066 (HL) para 87, per Lord Mance. It is therefore advisable that solicitors continue to endorse the words "without prejudice" on correspondence and similarly for mediation documents to contain such clauses to make it plain that, in the event of negotiations being unsuccessful, they must not be referred to in any litigation which may ensue.

In Venture Investments Placement v Hall [2005] EWHC 1227, para 11, HHJ Reid QC emphasised that "mediation proceedings do have to be guarded with great care. The whole point of mediation proceedings is that the parties can be frank and open with each other, and that what is revealed in the course of mediation proceedings is not to be used for or against either party in the litigation, if mediation proceedings fail."


A cloak for perjury, blackmail or other unambiguous impropriety'
In Unilever (at p. 2444 G) it was made clear that the exemption should be applied only in the clearest cases of abuse of a privileged occasion. A mere inconsistency between an admission and a pleaded case or a stated position will not unveil the protection of privilege. Instances of perjury and blackmail are perhaps likely to be clearer than those of "unambiguous impropriety"

In Savings & Investment Bank Ltd (In Liquidation) v Fincken [2003] EWHC 719 (Ch) [2003] 3 All E.R. 1091 para 40, Patten J. considered the scope of unambiguous impropriety as follows:

"It seems to me that the exception identified by Robert Walker LJ can extend, in appropriate cases, not only to instances where the without prejudice occasion is abused by the making of threats but also cases where there is an unambiguous admission of facts which is intended to be followed by an equally unambiguous denial of those facts by the same party. Circumstances of that kind amount to an abuse and the exclusion of such evidence by virtue of the rule would act as a cloak for perjury.

I am also satisfied, for what it is worth, that circumstances of that kind constitute unambiguous impropriety of the kind envisaged by Lord Justice Hoffmann. That is not to say, as I hope I have indicated, that every admission, legal or factual, can be open to the court in subsequent proceedings regardless of the circumstances. The sort of cases that I have in mind are cases where in an uncomplicated situation and not for the purpose of establishing a negotiating position on a hypothetical basis the party has made a clear admission of relevant facts which he or she then subsequently chooses to deny."

In a hypothetical family law example, a father in a relocation dispute may agree in the clearest terms that the mother and child may relocate externally on the basis of generous agreed contact, but without any other conditions or caveats. Those terms are subsequently recorded within a mediation agreement. The parties' solicitors thereafter correspond in order to implement the terms of the agreement and significant steps are taken by the mother and child to relocate. The father later withdraws his agreement following an argument with the mother. Can the father hide behind the mediation agreement to conceal his volte face? Applying the legal principles in Savings & Investment Bank Ltd the father may be considered to have exercised "unambiguous impropriety" by making a clear admission and later resiling from it. Will the justice of the case require disclosure of the mediation terms?

Closely allied to this exception is one of estoppel, particularly where, as in the scenario above, one party has taken significant steps to implement the terms of an agreement. Mr Justice Neuberger in Hodgkinson & Corby Ltd and Another v Wards Mobility Services Ltd [1997] F.S.R. 178 said this:

"… there is, to my mind, a powerful argument for saying that if a clear and unambiguous statement is made by one party in "without prejudice" correspondence, and the statement is acted on, and reasonably acted on, by the other party, an objection by the first party to the correspondence being put in evidence by the second party in order to justify the step taken by the second party would be plainly unconscionable and would not be upheld by the court."


Stability of marriage
In Re D, Sir Thomas Bingham M.R. suggested that there was a distinct privilege relating to 'matrimonial conciliation' based on the public interest in the stability of marriage, relying on the case of D v National Society for the Prevention of Cruelty to Children [1978] AC 171. The latter case made reference to three cases: McTaggart v McTaggart [1949] P. 94; Mole v Mole [1951] P. 21 and Theodoropoulas v Theodoropoulas [1963] 3 W.L.R. 354. All three cases concerned divorcing couples in the midst of reconciliation. The principle applied in all three cases was that adumbrated by Denning LJ in McTaggart:

"The rule as to "without prejudice" communications applies with especial force to negotiations for reconciliation. It applies whenever the dispute has got to such dimensions that litigation is imminent."

Whilst this privilege may apply to couples seeking to reconcile in order to avoid divorce, it appears that its reach does not extend to separated couples making arrangements for the future care of the children of their marriage.


How should this work in practice?
If one party seeks to rely on without prejudice material at trial, the party should first seek the permission of the other party. If the parties cannot agree, the matter should be raised at the earliest opportunity at a directions hearing and the matter determined by a judge, other than the trial judge. There is an obvious logic to a judge recusing himself after considering the privileged material, but each case will depend on its own facts – see Berg v IML London Ltd [2002] 1 WLR 3271, Stanley Burton J.

The authors appeared for the father in BL v TC & OD [2017] EWHC 3363.


June 2018