As has been discussed previously, the mediation process is an important step in all litigation in Toronto. Settlement privilege and the exceptions are important cogs in the wheel of understanding the protections afforded to the mediation discussions.

Duty of Confidence

There remains a further issue which may arise from an abuse of the mediation process. This may occur when a party fails to honour the confidence of the process and repeats the contents of the discussions or the result of the mediation to someone who was not involved in the mediation.

This duty of confidence may arise in two ways. The first comes from a covenant contained in the mediation agreement. The second source is that the idea that the concept of “the implied undertaking” applies to the mediation process.

The Ontario Rule[1] on mediation codifies the principle that communications made without prejudice in an attempt to resolve a dispute are not admissible into evidence, unless such communications have resulted in a concluded settlement. The rule does not, however, make mediation confidential. It does makes the discussions inadmissible.[2]

Settlement privilege is a rule of evidence. The consequences of a breach of each leads to separate and distinct consequences.[3]

The Mediation Agreement

Typically, the parties to a mediation will reciprocally covenant that the contents of the mediation are confidential.

Apart from this general practice, there may also be many other reasons for the parties to request a confidentiality term, beyond the immediate desire to settle the claim. These may include particularly sensitive information that is expected to be revealed at the mediation, such as financial details or trade secrets. Other factors may include the revelation of information that could be used by other parties which could lead to additional litigation or public authorities, or the information could prove to be publicly humiliating.[4]

Mediation & The Implied Undertaking

The principle of the implied undertaking arose in a decision of the Ontario Court of Appeal[5] in which this Court first determined the need to protect documents which had been produced on discovery.

In this case, the employee in question had been terminated from a real estate agency. In the course of her initial lawsuit against the company, a report that the agency made to its regulator questioning the employee’s integrity was disclosed. The employee used this report to then support a subsequent defamation action against the agency. The Court of Appeal refused to allow her to do so, based on this submission of the need to protect documents produced in the litigation.

This resulted in the later establishment of this principle as a Rule within the Rules of Civil Procedure.[6] The specific Rule does not, on its face, refer to the mediation process. There remains, hence, an argument that the underlying principle does.

In one recent Court of Appeal decision,[7] this issue was reviewed by one of the three justices in a separately concurring decision. This judge came to the same conclusion as was reached by the majority decision, but for differing reasons. This particular decision is not binding law, but nonetheless remains instructive and persuasive.

One of the parties to the mediation was seeking a contempt order, due, in part, to an  allegation that the opposing party at the mediation had violated the confidence of the mediation process.[8] The alleged offence was a publication of the results of the mediation, as below:

No reconciliation was reached in the action brought against Gazeta and its Editors Alicja Gettlich and Zbigniew Belz.

After a mediation session that lasted for a few hours last Tuesday, Ms. Elzbieta Rogacka, the Plaintiff (let us refresh our memory: a private action taken, corporate money used) rejected the Gazeta editors’ proposal which might have served as a basis for reconciliation of the parties.

Abella, J.A., the author of the concurring opinion, noted that the mediation process is a mandatory one which requires participation and the exchange of information between the parties. This creates a public policy motivator to insure that the mediation is subject to a confidentiality protection, she stated:

Mandatory mediation is a compulsory part of the court’s process for resolving disputes in civil litigation. Wilful breaches of the confidentiality it relies on for its legitimacy, in my view, represent conduct that can create a serious risk to the full and frank disclosures the mandatory mediation process requires. It can significantly prejudice the administration of justice and, in particular, the laudable goal reflected in Rule 24.1 of attempting to resolve disputes effectively and fairly without the expense of a trial.

This judge’s decision found wisdom in using the implied undertaking concept to be applied to the mediation process.

This being said, because the formal rule does not specifically apply to the mediation process, Abella J.A. agreed with the two other justices that this was not a proper case for a contempt order.

One subsequent case has commented favourably on this view of applying the common law concept of the implied undertaking to the mediation process.[9]

Remedy for Breach of Confidence

The mediation agreement may, itself, provide for a remedy in contract for a breach of the confidentiality provision.[10]

Should one party have violated the confidentiality of the mediation process, whether this obligation arise by covenant or by the implied undertaking submission, the breach could be enforced by a contempt motion or by separate action for damages.[11] Where the breach is threatened, it could be restrained by injunction.[12]

To succeed on a contempt application, the court[13] concluded that the conduct must be shown to have a “significant adverse effect on the administration of justice”. Given the rules do mandate the parties’ participation, there remains the potential to seek the remedy of contempt where “the circumstances are clear and beyond reasonable doubt,” a view which was also shared by Borins J.A.[14]

The mediation process when conducted openly and in good faith can lead to settlement of many disputes and offer means of resolve which a court cannot order. Settlement resolutions based on non-monetary components such as an apology or a reference letter or even a reinstatement are not within the usual ambit of a judge’s power. It can work effectively to end cases. Confidentiality is an important tool to lead to this result.

Understanding the Rules of Mediation

Whether your interests be that of an employer or an employee, a fundamental understanding of the expected rules of confidence is an important step to a successful mediation and avoiding later complications.

If you have questions about the mediation process, contact the offices of Toronto employment lawyers Grosman Gale Fletcher Hopkins. We regularly advise workplace parties on a wide range of legal workplace issues. Contact us online or by phone at 416 364 9599 to schedule a consultation.

 

 

 

[1] Rule 24.1.14 All communications at a mediation session and the mediator’s notes and records shall be deemed to be without prejudice settlement discussions.

[2]  Rogacki v Belz

[3] Union Carbide v Bombardier SCC May 2014

[4] Owen V. Gray in “Protecting the Confidentiality of Communications in Mediation” (1998) Osgoode Hall Law Journal 667

[5] Goodman v Rossi

[6] Rule 30.1.01(1)

[7] Rogacki v Belz The majority decision did not speak to this issue.

[8] In this case, there was also a confidentiality covenant in the mediation agreement.

[9] Marshall v Ensil Canada March 2005 Master MacLeod

[10] Union Carbide v Bombardier SCC May 2014

[11] Marshall v Ensil Canada March 2005 Master MacLeod

[12] Marshall v Ensil Canada March 2005 Master MacLeod, referencing Jones v Campbell [2000] O.J. No. 3153

[13] As written by Borins J.A., Armstrong J.A concurring. Abella J.A. wrote separate concurring reasons.

[14] The successful appellant was, however, denied his costs on appeal, in part due to his violation of the covenant. Borins J.A. dissented on this issue. The Court of Appeal in the costs decision noted a proposed amendment to the mediation rule to add a provision that all communications at a mediation session and the mediator’s notes and records shall “be subject to the deemed undertaking as provided in rule 30.1.01”. This amendment has not been effected.


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