March 14, 2005

Legal Corner

By David Bristow

Q.C., LSM, C.Arb

Mediation confidentiality tested by Ontario courts

One of the most important selling points of mediation was that it is totally confidential. None of the documents, discussions, and mediators involvement, could ever be revealed in any subsequent proceedings, or so the participants in mediation all thought.

Mediation agreements were carefully crafted to ensure total privacy, and to guard against anything said being repeated in any way.

That was what the clients and mediator have all agreed to and it was one of the pillars of the mediation process.

Recently, the confidentiality pillar was tested by the courts in Ontario.

In this case, one side stated that a mediation settlement had been reached by all parties.

The other side denied this and said that one K was not a party to the agreement.

The mediator had drafted the minutes of settlement in his own handwriting, leaving out the name of one defendant K on the signature page.

Counsel for the plaintiff stated the omission was simply inadvertence while the defendant’s lawyer stated K was never intended to be a party to the settlement.

An application was brought before the court to compel the mediator to testify as to what transpired at the mediation respecting the terms of the settlement reached, if any.

The court compelled the mediator to testify only with respect to the issue of whether K was a proper party to the settlement.

The conflicting principals of confidentiality and disclosure were suddenly in sharp focus.

The court went to elaborate pains to reconfirm that mediation must be confidential but said that confidentiality was not absolute when a settlement had been achieved.

The judge stated that the notions of privilege and confidentiality which cloak mediation sessions encourage parties to be frank and candid in seeking resolution without concern that, if no settlement is forthcoming, anything that they may have said at the mediation could be used against them.

However, once a settlement is achieved but its interpretation is in question, disclosure of mediation discussions may be necessary to ensure substantive justice.

In such circumstances, disclosure of discussions will not undermine the mediation process as it is sought not as an admission against a party’s interest, but solely for the purpose of determining the specific terms of an agreement that both parties have arrived at.

Having said that, since privilege and confidentiality are critical to the success of the mediation process, they should not be lightly disturbed.

Some evidence must be adduced on the motion to demonstrate that the mediator’s evidence is likely to be probative to the issue and that the benefit gained by the disclosure for the correct disposal of the litigation will be greater than any injury to the mediation process by the disclosure of discussions that took place.

This case will cause concern to the parties to mediation and to mediators who, up to now, considered everything in mediation proceedings to be confidential.

David I. Bristow is a partner with Team Resolution in Toronto — www.teamresolution.ca.

E-mail: bristow@gsnh.com.

Phone: (416) 597-6585.

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