Confidentiality and Privilege in the Mediation Process

Imagine you attended a mediation in a hotly contested matter which turns out to be a total waste of time because your adversary was late, unfamiliar with the file or unwilling to entertain settlement discussions. Is it permissible to tell the trial judge about your adversary’s failure to act in good faith? What if you are able to reach an agreement but one side later refuses to acknowledge that agreement? Is there any recourse?

Imagine you participate in a mediation which is unsuccessful. Your adversary files a motion wherein it is disclosed that your client was willing to waive alimony at mediation. You, of course, are furious at this misrepresentation because that is only part of the story. What has been omitted is that your client was only wiling to waive alimony in exchange for receiving 100% of the property in equitable distribution. How do you respond?

The General Rule

Attorneys frequently opine that all discussions in mediation are confidential. However, the reality is more nuanced. There are both exceptions and exclusions. The Mediation Privilege comes from Rule 1:40-4(c) and the Uniform Mediation Act (UMA).[1] This privilege is further incorporated into Rule 519 of the New Jersey Rules of Evidence.

Rule 1:40-4(c) provides, “[a] mediation communication is not subject to discovery or admissible in evidence in any subsequent proceeding except as provided by the New Jersey Uniform Mediation Act, N.J.S.A. 2A:23C-1 to -13. A party may, however, establish the substance of the mediation communication in any such proceeding by independent evidence.”

The UMA states that a mediation communication is “a statement, whether verbal or nonverbal or in a record, that occurs during a mediation or is made for purposes of considering, conducting, participating in, initiating, continuing, or reconvening a mediation or retaining a mediator.”[2]

This would cover the communications made during the mediation itself and also communications relating to scheduling and logistics surrounding the mediation. The parties and the mediator are bound by the privilege. In addition to the participating parties, there may be nonparty participants such as accountants or other experts who are similarly bound by the privilege.[3]

As a general rule, mediation communications are privileged and not subject to discovery or admissible in evidence in a proceeding unless waived by all the parties to a mediation, as well as the mediator and the third party participants.[4] Each of those individuals has the right to raise the privilege so as to not be forced to reveal communications that occurred during mediation. Similarly, the privilege may be raised to preclude others from disclosing what was said in the mediation.

The privilege can also be waived by the action of a party. If a party discloses a mediation communication the party waives the mediation privilege, but only to the extent necessary for the person prejudiced by the disclosure to respond.[5]

Communications Not Protected by Privilege

The UMA provides that there is no privilege for a mediation communication under certain circumstances. These are not exceptions to the privilege, but rather communications that are not covered by the privilege.[6] The privilege does not apply to the following:

1. An agreement evidenced by a record signed by all parties to the agreement.
2. Communications made during a session of mediation that is required to be or is open to the public.
3. A threat or statement of a plan to inflict bodily injury.
4. A communication that is intentionally used to plan a crime, attempt to commit a crime, or conceal an ongoing crime or ongoing criminal activity.
5. Communications offered to prove or disprove a claim or complaint filed against the mediator arising out of mediation.
6. Communications sought or offered to prove or disprove a claim or complaint of professional misconduct to malpractice filed against a mediating party, nonparty participant or representative of a party based on conduct occurring during the mediation.
7. Communications offered to prove or disprove a child abuse or neglect in a proceeding involving DCP&P unless DCP&P participates in the mediation.[7]

The UMA also provides that a privilege does not exist if a court, administrative agency, or arbitrator finds, after a hearing in camera, that the party seeking discovery or the proponent of the evidence has shown that the evidence is not otherwise available, that there is a need for the evidence that substantially outweighs the interest in protecting confidentiality, and that the mediation communication is sought or offered in:

1. a court proceeding involving a crime as defined in the “New Jersey Code of Criminal Justice,”N.J.S.2C:1-1 et seq.; or
2. except as otherwise provided in subsection c., a proceeding to prove a claim to rescind   or reform or a defense to avoid liability on a contract arising out of the mediation.[8]

Privilege and Constitutional Rights

In State v. Williams[9], the New Jersey Supreme Court was faced with the clash between the mediator privilege and the defendant’s constitutional rights. The parties had attended mediation at the municipal court level. The matter did not settle and an indictment for third degree assault, possession of a weapon and fourth degree unlawful possession of a weapon.  Williams alleged that at the time of the mediation the alleged victim admitted he had first picked up a shovel, supporting his claim of self-defense. The case came before the Supreme Court solely on the issue of the admissibility of the mediator’s testimony. The defendant argued that the R. 1:40-4(c) prohibition against a mediator testifying should be relaxed in order “to secure a just determination…and fairness in administration” pursuant to R. 1:1-2. The court balanced the Fourteenth Amendment guarantee that every criminal defendant is entitled to a fair trial, including the right to cross examine and impeach the state’s witnesses as well as the defendant’s right to cross examine and impeach the state’s witnesses against the mediation privilege.

The Supreme Court noted the language in the UMA that the privilege yields if  “there is a need for the evidence that substantially outweighs the intent in protecting confidentiality and the proponent of the evidence shows the evidence is not otherwise available”.[10] The court found there was a need for the evidence. However, the court determined the interest in maintaining confidentially outweighed the defendant’s interests. The court discussed the need for confidentiality in the mediation process and emphasized that mediation is not conducted under oath. It does not follow the rules of evidence, nor is mediation limited to admissible facts.

The Supreme Court also refers to New Jersey Rule of Evidence 408 which provides statements made by parties in settlement negotiations are generally inadmissible in subsequent proceedings. The court determined the mediator’s testimony was not sufficiently probative. It also concluded that the defendant did not demonstrate that the victim’s statement that he picked up a shovel was “not otherwise available” since there was other evidence such as the police report used in cross examination as well as the defendant’s own testimony.

Privilege and Divorce

In Lehr v. Afflitto,[11] the husband alleged a settlement had not been reached in mediation. The trial court conducted a Harrington hearing[12] after a remand from the Appellate Division. During the Harrington hearing, the mediator utilized by the parties was called to testify on behalf of the husband. Upon appeal the court found that the trial judge had erred in permitting the mediator to testify.[13] The court also found that the testimony did not support the trial court’s conclusion that the parties had reached a settlement and remanded the matter for trial. [14]

The trial court stated that any question asked of the mediator and any responses are deemed to be a waiver by the husband of any objections to matters at mediation being brought into court.[15]

The Appellate Court found that the mediation confidentiality provision had not been waived, noting that the plaintiff’s counsel cited to R. 1:40-4(c) at the onset of the hearing.[16] The court found both defense counsel’s act of subpoenaing the mediator and the procedures employed by the court troubling, noting that the issue of confidentiality is of great public and systematic importance.

The court relied on R. 1:40-4(c) language that no mediator may participate in any subsequent hearing or trial of a mediated matter or appear as witness or counsel for any person in the same or related matter.[17]

The court referred to the Williams case determining that the Courts have “long-recognized that public policy favors settlement of legal disputes.”[18] The court emphasized the importance of confidentiality in the mediation process and noted the risks of allowing mediation as a fact-finding process. Specifically, the court stressed, “Underpinning the success of mediation in our court system is the assurance that what is said and done during the mediation process will remain confidential.  The mediation process was not designed to create another layer of litigation in an already over-burdened system.”[19]

In Addesa v. Addesa,[20] the wife moved to set aside a property settlement agreement reached during mediation. The first trial judge set aside the property settlement agreement after a hearing in which the mediator was called as a witness. The Appellate Court found that the portions of the lower court’s order permitting the mediator to testify and allowing the inspection of his file were inappropriate.[21] The court also emphasized that in addition, the mediation agreement of the parties contained language stating the mediator and his records would not be subject to subpoenas.[22]

The Disclosure of Privileged Communications by an Adversary

In Willingboro Mall, Ltd. v. 240/242 Franklin Ave., L.L.C., 215 N.J. 242 (2013) the parties agreed to non-binding mediation. The mortgagor moved to enforce the purported oral agreement reached during mediation and in doing so, supported its application with a certification of the mediator and counsel including privileged communications.[23] Instead of moving to bar the privileged statements, the plaintiff litigated the validity of the agreement and further disclosed additional privileged communications.[24] The Court discussed two exceptions to the privilege which were pertinent in this matter. The first, a signed writing which  “allows a settlement agreement reduced to writing and properly adopted by the parties to be admitted into evidence to prove the validity of the agreement.”[25] The second exception discussed by the Court was waiver and the need for waivers of privilege to be express and deliberate in order to avoid an inadvertent mistaken disclosure.[26] The Court affirmed the Appellate Division’s finding of the existence of an oral settlement agreement, but clarified that “going forward, a settlement that is reached at mediation but not reduced to a signed written agreement will not be enforceable.”[27] The Supreme Court also cautioned and reminded litigants that, “a party seeking the protection of a privilege must timely invoke the privilege. A party that not only expressly waives the mediation-communication privilege, but also discloses privileged communications, cannot later complain that it has lost the benefit of the privilege it has breached.”[28]

Penalties and Consequences for Wrongful Disclosure

There is no specific penalty outlined by statue or court rule that addresses non-exempt disclosures. The only time a consequence is mentioned is in the provision that states if one violates the privilege the adversary can disclose information to counter the disclosed information.

When faced with an inadvertent disclosure, courts generally remedy the issue by striking the privileged communication from the record. However, the fact remains that the striking of the privileged communication does not unring the bell.  Once a communication is made it cannot be unheard or forgotten. While counsel may be familiar with a court’s ability to ignore something it has read, litigants are not at all convinced that the court can “unsee” what has been placed before it.

Final Thoughts and Takeaways

With the prevalence of Alternative Dispute Resolution on the rise in the wake of the COVID-19 epidemic and judicial vacancy crisis, how do practitioners ensure that the communications made during mediation truly remain protected? First, it would be best practice to have a signed mediation agreement signed by the parties, third parties and the mediator that clearly reflects that all mediation communications are confidential. The privilege applies not just to the mediation itself, but to all statements made for the purpose of considering, conducting, participating in, initiating or reconvening a mediation. Second, restate the rules before each mediation session to make sure everyone has the same understanding about the confidentiality of the meetings.

[1] N.J.S.A. 2A:23C-1 to -13

[2] N.J.S.A. 2A:23C-2

[3] See N.J.S.A. 2A:23C-2; N.J.S.A. 2A:23C-4

[4] N.J.S.A. 2A:23C-4

[5] N.J.S.A. 2A:23C-5

[6] N.J.S.A. 2A:23C-6

[7] N.J.S.A. 2A:23(c)-6

[8] N.J.S.A.  2A:23C-6

[9] 184 N.J. 432 (2005)

[10] The UMA was not in effect when the trial court initially excluded the mediator’s testimony

[11] 382 N.J. Super. 376, (2006)

[12] Harrington v. Harrington, 281 N.J. Super. 39 (1995))

[13] Lehr v. Afflitto, 382 N.J. Super. 376, 395 (App. Div. 2006)

[14] Lehr v. Afflitto, 382 N.J. Super. 376, 395(App. Div. 2006)

[15] Lehr v. Afflitto, 382 N.J. Super. 376, 387 (App. Div. 2006)

[16] Lehr v. Afflitto, 382 N.J. Super. 376, 391(App. Div. 2006)

[17] The UMA was not in effect when the Harrington hearing was held by trial court in this matter nor when this matter was decided

[18] Lehr v. Afflitto, 382 N.J. Super. 376, 394, 889 A.2d 462, 474 (App. Div. 2006)

[19] Lehr v. Afflitto, 382 N.J. Super. 376, 391, 889 A.2d 462, 472 (App. Div. 2006)

[20] 392 N.J. Super. 58 (N.J. Super. 2007)

[21] Addesa v. Addesa, 392 N.J. Super. 58, 65, 919 A.2d 885, 889 (App. Div. 2007)

[22] The court noted that the UMA had not been enacted when the parties signed the agreement, but noted that if it had been passed earlier, it would control if it had been in effect.

[23] Willingboro Mall, Ltd. v. 240/242 Franklin Ave., L.L.C., 215 N.J. 242, 245 (2013)

[24] Willingboro Mall, Ltd. v. 240/242 Franklin Ave., L.L.C., 215 N.J. 242, 245 (2013)

[25] Willingboro Mall, Ltd. v. 240/242 Franklin Ave., L.L.C., 215 N.J. 242, 256 (2013)

[26] Willingboro Mall, Ltd. v. 240/242 Franklin Ave., L.L.C., 215 N.J. 242, 257 (2013)

[27] Willingboro Mall, Ltd. v. 240/242 Franklin Ave., L.L.C., 215 N.J. 242, 263 (2013)

[28] Willingboro Mall, Ltd. v. 240/242 Franklin Ave., L.L.C., 215 N.J. 242, 263, (2013)