by Andrew Flake
When that oddest of special occasions rolled around this year, our U.S. Groundhog Day, I decided to incorporate the festivities into a post. What are some of the recurring issues are in mediation, things that come up, in some form, again and again? I landed on the mediation privilege: what exactly it is; whether it is a true privilege; when and how it might apply; whether another party has run afoul of it; and so on.
As with “the usual stipulations” in a deposition, parties frequently assume that either that a broad, uniform and universal privilege exists, or that the analysis is the same as any other settlement discussion. Neither is necessarily the case; it might be more accurate to say that we have a strong policy of encouraging the mediation process, as a specific and very effective form of dispute resolution, including open and unfettered discussion and assessment of our cases. We want frank talk about settlement, but how we protect and foster it, will vary.
The core protection, for the mediation process and proceeding itself, will invariably be protected. As the Delaware Court of Chancery expressed it: Confidentiality of all communications between the parties or among them and the mediator serves the important public policy of promoting a broad discussion of potential resolutions to the matters being mediated. Without the expectation of confidentiality, parties would hesitate to propose compromise solutions out of the concern that they would later be prejudiced by their disclosure.
And this protection has very practical benefits. I like the Sixth Circuit’s review of the policy, as very grounded in the real world concerns that can threaten open discussion:
In order for settlement talks to be effective, parties must feel uninhibited in their communications. Parties are unlikely to propose the types of compromises that most effectively lead to settlement unless they are confident that their proposed solutions cannot be used on cross examination, under the ruse of “impeachment evidence,” by some future third party. Parties must be able to abandon their adversarial tendencies to some degree. They must be able to make hypothetical concessions, offer creative quid pro quos, and generally make statements that would otherwise belie their litigation efforts. Without a privilege, parties would more often forego negotiations for the relative formality of trial. Then, the entire negotiation process collapses upon itself, and the judicial efficiency it fosters is lost.
In some states, like Delaware, this policy gets expressed in both strong case law and rule-based protection; in other state courts, there may be only case law, or specific local rules that address the confidentiality of mediations, at least for court-ordered or court-annexed mediations. The Uniform Mediation Act is intended to bring some consistency to the process. Although it has been adopted in some forward-looking jurisdictions, including here in Georgia, though, it is not yet the law in most states.
At the federal level, not every circuit has explicitly recognized a mediation privilege. The Sixth Circuit, in the case I noted above, has. The Seventh, Ninth, and Eleventh Circuits, for example, still have not. In federal court litigation in those circuits, it will be local rules or case law under Federal Rule 408 that provides the most protection for mediation discussion. Do note, however, that Rule 408, as compared to true mediation privilege, is narrower. It permits the admission of statements made in settlement for other purposes, and applying it — what discussions about settlement, and drafts and other documents are protected — can be complex.
It fact, a good argument for adoption of true mediation privilege, or at the state level, for incorporating it by adopting the Uniform Mediation Act, is simplicity. Otherwise, the scope of protection for settlement discussions, at least outside of the auspices of the actual mediation, can depend on differences in case law, public policy, local rule, statute, and the Federal Rules of Evidence and of civil procedure, as they pertain to settlement.
So check in each case, as part of your initial case review, and certainly at the point at which settlement discussions begin, to make sure you understand the particular parameters of and the basis for mediation privilege or protection in your jurisdiction.
You will be surprised at how often the issue, like a groundhog, pops up at unexpected times.
By the way, earlier this month Punxatawney Phil did see his shadow. So if you believe in this small and celebrated mammal’s predictive skills, we’re in for another six weeks of winter. Stay warm.[The Delaware Court of Chancery quote is from Wilmington Hospitality, L.L.C. v. New Castle County ex rel. New Castle Department of Land Use, 788 A.2d 536, 541 (Del.Ch. 2001).]
[The Sixth Circuit quote is from Goodyear Tire & Rubber Co. v. Chiles Power Supply, Inc., 332 F.3d 976, 980 (6th Cir. 2003).]