The single greatest asset of mediation is candour. Parties will only speak honestly about the strengths and weaknesses of their positions — and about what they would truly accept — if they are confident that nothing said in the room can later be deployed against them. That confidence rests on two distinct legal foundations, and it is a common error to treat them as one.

The first foundation: confidentiality

The first is contractual. Virtually every mediation is conducted under a mediation agreement, signed by the parties and the mediator before the session begins, which provides that the mediation is confidential: what is said and produced within it is not to be disclosed to outsiders. This obligation binds the parties and the mediator alike, and it extends to matters that without prejudice privilege would not touch — the fact of who attended, the conduct of the parties on the day, and the documents prepared for the mediation itself.

The second foundation: without prejudice privilege

The second is the without prejudice rule. Communications made in a genuine attempt to settle an existing dispute are, as a matter of public policy, inadmissible in subsequent proceedings concerning that dispute. The policy is venerable and sensible: parties must be free to make concessions in negotiation without fear that those concessions will be read out to the judge if negotiation fails. The rule applies to mediation as it applies to any settlement negotiation, whether or not the words “without prejudice” are stamped on every page.

The limits of the protection

Neither protection, however, is absolute, and the prudent party should understand the exceptions.

  • The without prejudice rule will not shield communications where the issue is whether a settlement was in fact concluded — the court may look at the exchanges to decide whether agreement was reached and on what terms.
  • The cloak cannot be used as an instrument of abuse. The authorities recognise exceptions for unambiguous impropriety, such as threats or blackmail dressed up as negotiation.
  • Confidentiality is owed to the parties, not by them to the mediator alone; where both parties waive it, the protection falls away.
  • In exceptional cases the court may require even the mediator to give evidence, where the interests of justice demand it — as the litigation in Farm Assist Limited v Secretary of State for the Environment, Food and Rural Affairs (No 2) [2009] EWHC 1102 (TCC) illustrates.

Practical counsel

Three points of practice follow. First, read the mediation agreement before the day, and understand precisely what it protects. Second, conduct yourself in the mediation on the footing that candour is protected but impropriety is not — the privilege exists to encourage honest negotiation, not to license misconduct. Third, when settlement is reached, record it in a signed written agreement intended to be binding and admissible, for that document — unlike everything that preceded it — is meant to see the light of day.

Candour, properly protected, is what allows mediation to do its work. Know the boundaries of the protection, and you can speak within them with complete freedom.