Its my money. Trust me!

Wont-Get-My-Money-400x234

Over the final half of my 37 years as a barrister in private practice, I have been arguing over money.

Not mine, I hasten to add, but other people’s. In particular, divorcing spouses or cohabitees. There comes a time after almost every separation when two people who have lived together and loved, start to argue about the spoils. Those that can afford it rush to a solicitor or direct access barrister and commence battle. Those that cannot pay may chose to go it alone.

Either way, they have embarked on a battle from which there is little respite – until they run out of money, of energy, or are crushed at court in a final hearing.

But the purpose of this blog is not to bemoan honest,hard-working people spending inordinate amounts of their money on lawyers and in courts. It is to examine the fundamental flaws of financial remedy proceedings (as the financial arrangements are called in court).

My first observation is prosaically procedural. How is it that going to court to argue financial splitting of assets can remotely be justified? The cost of this process starts at £12,000 for the couple, and soars to a dizzy £100-120,000 in more complex cases. In J v J the parties managed to rack up £920,000 in costs between them, much to the judicial amazement and displeasure of Mr Justice Mostyn. Do they get a return on their investment? J v J didn’t; and generally, the chances are – not.

Readers of my earlier blogs will recall my commentary on the alternatives of mediation and arbitration, which I will not repeat here. Guidance by a single expert makes sense, assuming the expert knows what a judge would do, and that both parties agree to be bound by the outcome. There is, of course, the other ‘questionable’ alternative of splitting at the outset by way of pre or post-nuptual agreement.

My main concern here is to do with the philosophy of division where children are involved. In fact, my problem goes further – to question of ‘ownership’ and ‘responsibility’.

The financial wars that I have witnessed rarely focus on the children. Yes, this may be the court’s first consideration when it comes to making an order, but the children seem to remain ‘bit players’ in the battles, unless they are to be used as weapons to secure a greater share of the booty for one of the parents.

So, what would happen if we changed the rules?

Imagine this. When two people decide that they are to have children, they would do so in the knowledge that they forfeit ownership of property to them? How would that be?

Simple. The law would deem that all matrimonial property vested immediately in trust for the children, and that each parent became a trustee for the child. Rather than children being ‘the first consideration’ for a court, a child or children would be deemed to be the beneficial owners of all of the property. There would no longer be the ‘divvy up’ entitlement of assets to to each parent; there would be an appropriate of provision for the parents’ immediate needs and no more. The rest would be managed exclusively to provide everything that their child would need through to the age of 21.

What a glorious world that would be – children placed, where they deserve and need to be – at the centre of decision making as the beneficiary and responsibility of their parents’ endeavours.

But will such ever come to pass? Of course not. We have neither the imagination to prioritise children over parental greed, nor the legal system to oversee it.

Instead, we will continue to subsidise the lifestyle of lawyers (of which I am one). But, long may it continue – for after all, what value the future of our children?

Scandalous Costs

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Between 29 October and 5 November 2014, Mr Justice Mostyn heard a financial remedy dispute between two embattled divorcing parents.

Their home was worth £291k, a property portfolio worth £317k, pensions of £115k and two businesses valued at £2080k.

By the Financial Dispute Resolution appointment on 12 March 2014, they had spent £226k in costs.  However, eight months later on 6 November, their legal costs rose to a staggering £920k – nearly one third of their assets.

In another case, the current President of the Family Division (in 2008 as a High Court judge) spoke of excessive costs constituting to “a scandal which must somehow be brought under control“. In 2012 Lord Neuberger had a go at costs in his lecture to the Association of Costs Lawyers, saying that hourly billing confused “cost with value”.

To avoid “the grotesque leaching of costs”, like Lord Neuberger before him, Mostyn J proposes fixed costs legal services to replace hourly billing, together with costs caps – and is to send the issue back to the President of the Family Courts for action.

This blogger has always been ambivalent towards hourly rate billing, believing that ‘time spent’ varies according to expertise. The lazy or inept lawyer can spend considerable time doing what the expert will do in an instant. With hourly billing, one is overpaid, whilst the other is inadequately rewarded.

But has the judiciary really grasped the nettle of costs?

The simple flaw lies deeper, in the fact that two firms of litigators, whose interests are served by protracting conflict, are permitted to take their clients into headlong battle, for which both the public and their clients pay at an hourly rate.

What do they pay for? Frequently, the ‘what is there?’ – the identity and value or the assets – is not the problem. Where divorcing couples can’t agree, they get an independent valuation. The real issue is to determine ‘what to do’ with what is there; and that is the job for their barrister.

The impenetrable form E – the court designed document intended to set out a financial picture probably fails in every regard, other than to raise rancour. What is needed is a simple schedule of assets, liabilites and income. After all, the court will attend to these (as did Mostyn J) – not the aspirations and wishes of the parties, nor tactical positions crafted by their solicitors. Why, then, should the preparation (and possible agreement) of such a schedule not be made a pre-requisite of a financial remedy claim?

What to do with the assets is frequently fairly obvious. Up and down the country District Judges hear contested cases in a matter of hours and give extempore judgments immediately following the evidence. More frequently, matters resolve at the financial dispute resolution stage when a judge (without hearing evidence) makes sage suggestions.

Why the battle lines? Why two lawyers and an adversarial process? What is wrong with simple experienced and impartial analysis to help resolve these issues? That the parties won’t agree is simply an excuse by an over-priced, unwieldy adversarial system – made possible and perpetuated by the court process.

Regrettably, what Mr Justice Mostyn did not evaluate was the significant cost to the public of hearing the case – numerous appearances before the lower court, a Deputy District Judge, Judge Bancroft’s salary, Mostyn J’s own salary over seven days, the Family Court and High Court buildings, court staff, heating and lighting – to deal with a ‘delinquent’ couple who had spent £920,000 with their lawyers.

How bizarre is it having public courts dedicated to this massively costly process, paid for at huge cost to taxpayers?

 

 

Solving Disputes

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Readers will be familiar with my preoccupation with alternative dispute resolution – especially if you flash back to my postings here – ‘Privatised Courts – where to, where from‘ and ‘Fit for Purpose‘.

With a civil court £100m deficit last year, court fees have had to rise (in one case by 216%). Such rises impact on access to justice for many people. Yet the court issue fee is the least of a litigant’s problems. The biggest is arguably their legal costs at the conclusion of the case.

The only answer to massive legal bills (and the real danger of adverse costs orders against unsuccessful litigants)  is to bypass the legal process altogether; although whilst the courts are open for business, and litigation lawyers strive to make money, this option is not currently realistic.

I have been impressed by recent developments in restorative justice, where those in conflict are encouraged and helped to sort things out between themselves in a civilised way. It is now acknowledged that there are almost no disputes that need to be excluded from this restorative process. Facilitators are arranging meetings in homicide and rape cases, and in long-standing conflicts that have been running for years. Even cases involving highly dangerous perpetrators, those with mental illness, and with children and young people are often deemed suitable for facilitation.

In my view, this is the vision for the future – lawyers and courts standing back, to allow for a more proportionate and appropriate resolution.

It will require a new role for law and for lawyers. Legal rules are there not simply to be known to lawyers and applied by judges in binding outcomes; but should be made available to guide those in dispute towards sensible compromises. The law should act as a framework for a well-ordered life, rather than as technical and incomprehensible set of rules to be adjudicated upon.

Speak to anyone who has been involved in legal processes and they will tell you that justice is always partial. This is because, whilst courts are supposed to be brokers of truth and justice, decisions arise from balances of proof and evidence, and judgments are frequently arbitrary. Once in the legal process, the litigants surrender all real power over outcomes, and remain in the hands of one individual, with that person’s limitations and prejudices. Not all judges are good judges, and not all of their decisions are correct. And to correct a poor decision by appeal takes time and often a considerable amount of money.

Firms of lawyers and barristers’ chambers should offer and provide proper ‘Dispute Resolution Centres’ – a place to which the protagonists can turn for considered and proportionate advice, and from which they are not expelled into an adversarial forum. Joint legal opinions and advice would form the first step helping the ‘parties’ to understand a framework for settlement. After that would come the facilitation stage – not necessarily managed by and restricted to the lawyers – but perhaps overseen by expert dispute brokers. And if issues remained, those in dispute would access simple adjudication by way of joint expert decision or arbitration.

Dispute Resolution Centres could operate on the basis of fixed fees without ‘issue costs’, teams of warring layers, and vitriolic letters – providing a ‘one-stop-shop’ to contain and resolve conflict.

For those that doubt the concept, remember, if lawyers do not take this initiative now, others may do so to their exclusion.

Privatised courts – where to, where from?

sold

The Times, May 28 scooped the story. If not subscribed to The Times Online, the reader should turn to Ben Bryant of the Telegraph to pick up the storyline, and Owen Bowcott of the Guardian who digs deeper into the Ministry of Justice denials.

The story turns on possible saving to the Ministry of Justice of £1 billion per year from the ‘wholesale privatisation’ of the courts, freeing them from Treasury control. Private investment and means-tested payments would relieve the taxpayer of a long standing burden.

Sarah Vine of the Guardian also enters the fray, fingering the velum of the fourteenth century Magna Carta, and concluding, “If Grayling has his way, the only heads left above the corporate water will be the judges”.

Whilst the media focus is understandably on the prospect of corporation such as G4S running the court service – and in time perhaps even employing the judges – this blogger is more interested in the imminence of something more subtle.

The state has never run a monopoly on the provision of justice, only – until fairly recently – on the appointment of judges. Their offices would historically follow revenue, and would be granted to those who supported the monarch.  Sixteenth century barrister Matthew Shardlake, in CJ Sansom’s ‘Heartstone‘, gives a graphic description of the judges of the ‘Court of Wards and Augmentations’. These were the courts that dealt with wardship (our modern day Family Courts).  After the Dissolution of the Monasteries and the seizure and selling of monastic lands, the old ‘Office of Wards’ was abolished and replaced by the Wardship court. These checked the value of lands subject to wardship, and the feodaries negotiated with applicants for the wardship, and land, of minor heirs. Some were granted to the children’s families, but where substantial money was involved, others would be awarded to the highest bidders.  “Wards and Augmentations are still sitting”…the courts that brought revenue to the King… would sit all summer”, observed Shardlake.

Justice has always been the younger brother of money, whether in the hands of the client, the lawyer or the state.

The blogger senses that the issue that most concerns government is not the running of courts, but the sheer scale and cost of public justice.

Hiving off the court buildings and administration to the private sector could undoubtedly result in savings – you only have to look at prisons to see this. It could also result in a better service deal for court users. How often as clients or advocates have we wasted hours, or even days, in waiting ‘our turn’ in the overstretched court list before a judge who is expected to react to information given to him or her on the morning of trial? The private sector could not get it more wrong.

The real point of reform is that the public in fact ends up underwriting the cost of everyone’s disputes, no matter how unreasonable. The court ‘issue fee’ no way reflects the cost of running the court and paying for the judges. For genuine civic disputes, this is a bearable social cost. But for private disputes, arguments concerning spousal assets, and company and commercial disputes, the subsidy by the public is unacceptable.

Recently retired Lord Justice Sir Alan Ward summed the problem up perfectly in a noisy floor dispute, “Not all neighbours are from hell. They may simply occupy the land of bigotry. There may be no escape from hell but the boundaries of bigotry can with tact be changed by the cutting edge of reasonableness skilfully applied by a trained mediator. Give and take is often better than all or nothing”.

As other systems are available, why should the taxpayer fund the big-money divorce,  the bankers’ dispute or the noisy floor? Yes, the litigation costs of these cases are enormous, but solely to pay the lawyers bills rather than the judges’ salaries and the public cost of running a court.

The government’s agenda is to shed as much work from the state court system as possible. These days, courts clearly do not pay.

There is, of course, the minor problem of Article 6 European Convention of Human Rights, providing “in the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law”. Perhaps this too is an underlying reason why some politicians are keen for repeal.

So, the blogger will forecast the next steps.

Commercial, company and most civil disputes will be directed towards arbitration, mediation and expert determination at first instance. These processes will be the ‘gate keepers’ for entry to the courts. The ‘reasonable time’ for determination of a dispute will run from the point where the alternative resolution mechanisms have been exhausted.

Likewise, family disputes involving children and money will be referred to alternative dispute resolution – where most will be expected to be solved. Only then, and on sanction of costs, will the courts intervene. The Family Court experiment with public law cases will flounder in delays exceeding 26 weeks and be replaced by tribunals.

Criminal cases will be handled by increasing use of community resolution processes, such as self-referral, the acceptance of voluntary penalties and restorative justice, offenders knowing that these will deliver the best deals. Only the hardened criminal for whom prison is inevitable will the door to the dock opened.

Of course we will still pay for the judges, but a slimmed down bench, with reduced pensions, and the small accompanying coterie of cut price lawyers will be cheap in comparison.

Perhaps Justice Secretary Chris Grayling has a point…..?

Why I have a problem with the Family Law Bar Association

Man Hanging on a Scale While Another Man Fills Dish

The ‘May fees update’ from the Family Law Bar Association has now hit our email boxes.

The FLBA warns us in no uncertain terms to take heed of the proposed changes for public funding in criminal cases set out in the government paper ‘Transforming Legal Aid: delivering a more credible and efficient system‘ , and to see this as a “far reaching” proposal that may go on to deny ‘the most vulnerable members of our society access to specialist legal advice’.

Clive Baker, in his detailed response to the government paper links back to the effect of the Legal Aid Sentencing and Punishment of Offenders Act 2012 (LASPO). There  he cites a cut of £350m per year affecting 600,000 people. He suggests that  LASPOA was the start of ‘work in progress’ to trim the legal aid budget for family work rather than the end of the matter.

So, has the FLBA got it right. Is Armageddon just round the corner for both the legal profession and the public they serve?

Chris Grayling, Lord Chancellor and Secretary of State for Justice subscribes to a simple view concerning the funding of criminal cases,

“Over the past decade, the system has lost much of its credibility with the public. Taxpayers’ money has been used to pay for frivolous claims, to foot the legal bills of wealthy criminals, and to cover cases which run on and on racking up large fees for a small number of lawyers, far in excess of what senior public servants are paid. Under the previous government, the cost of the system spiralled out of control, and it became one of the most costly in the world”.

The blogger has memories that exceed the ‘past decade’ and is tempted to say that since public funding has been available ‘it has always been thus’. Indeed, the blogger’s favourite legal friend Matthew Shardlake interfaced with the same frivolous claims, wealthy criminals and exploitative lawyers in the 16th century. It could be said that ‘where there are lawyers, there will always be conflict’.

The doomsday practitioners gather sustenance from Lord Justice Ward in Wright v Michael Wright Supplies Ltd [2013] EWCA Civ 23416, who at para 2 addresses one of the consequences of withdrawing public funded legal advice:

“What I find so depressing is that the case highlights the difficulties increasingly encountered by the judiciary at all levels when dealing with litigants in person. …. how to bring order to the chaos which litigants in person invariably – and wholly understandably – manage to create in putting forward their claims and defences. Judges should not have to micro-manage cases, coaxing and cajoling the parties to focus on the issues that need to be resolved”. ” It may be saving the Legal Services Commission which no longer offers legal aid for this kind of litigation but saving expenditure in one public department in this instance simply increases it in the courts. The expense of three judges of the Court of Appeal dealing with this kind of appeal is enormous. …. The appeal would certainly never have occurred if the litigants had been represented. With more and more self-represented litigants, this problem is not going to go away. We may have to accept that we live in austere times, but as I come to the end of eighteen years service in this court, I shall not refrain from expressing my conviction that justice will be ill served indeed by this emasculation of legal aid.”

But an essential question is not whether the court is able to cope with litigants in person, but whether the system should direct them there as the most appropriate venue to resolve their dispute?

Blog readers by now will know of my views on the importance of mediation and private arbitration. You will also have read of my views about the relevance of an adversarial process in family disputes, and questioning the need for parents in conflict to have ‘party status‘.

Has Lord Justice Ward missed the point as he reaches his 18th year aboard the Court of Appeal? Is it necessary, or even advisable to have lawyers directing proceedings from the beginning of a dispute to its end? And should the public carry the bill?

Should he not reflect back on Lord Woolf’s comments in Cowl v Plymouth (2001) EWCA 1935 at para 25:

Without the need for the vast costs which must have been incurred in this case already being incurred, the parties should have been able to come to a sensible conclusion as to how to dispose the issues which divided them. If they could not do this without help, then an independent mediator should have been recruited to assist. That would have been a far cheaper course to adopt. Today sufficient should be known about ADR to make the failure to adopt it, in particular when public money is involved, indefensible”.

There is something singularly unattractive about a profession as well paid as ours, raising principled arguments concerning the withdrawal of our publicly funded income.

Whilst the points are well made, surely the art now is to raise them subtly, record them, and work positively and creatively with a popular, democratic idea. Should it fail, of course we will be there to pick up the pieces.

£25M mediation budget following the death of legal aid

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Lord McNally, Family Justice Minister

April 1 2013 saw the inception of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, one of the most far reaching legal provisions in a generation.

Some commentators see the change in the legal aid rules as a disaster.

Since April, your blogger, wearing his hat as barrister and advocate, attends court to face increasing numbers of litigants in person – and cases out of control. For the judges it is more stressful. They have the immensely difficult job of case management with parties that fail to understand the rules and question the reasons for them.

And of course, there are those who cannot contemplate representing themselves and simply feel shut out of their legal remedies. The courts were not ready for this. There is some help from the Bar Council’s guide, and more from Lucy Reed‘s Family Courts Without a Lawyer publication. But almost certainly, this will not be enough to avoid degrees of chaos.

The Ministry of Justice has however allocated £25 million (an increase of £15m) to support family mediation. Lord McNally, Family Justice Minister expects mediation assessment meetings to provide the answer – providing important information about facilitation and allowing parties access to mediation services. McNally contends that, with mediation, the average time to resolve property and financial remedy disputes drops from 435 days to 110 days, together with the accompanying reduction of cost and stress to the parties.

Leading up to, and since 1 April, new mediation services (such as the pilot at Teesside Combined Court Centre) and the blogger’s service ‘Divorce Without Pain‘ have sprung up to deal with the increase in need for mediation. It is too early to tell whether these schemes will flourish, and indeed whether parties to a dispute will favour specialist lawyer mediators.

Arbitration has likewise come to the fore as a method of dealing with property and financial remedy disputes. For several years these methods have been tested in Ontario, Canada and Australia – and introduced two years ago in Scotland through its Family Law Arbitration Group Scotland. Vancouver arbitrator Georgialee Lang, speaks of the “disharmony, conflict, lengthy delays and outrageous legal fees.” arising from the current court systems for family law – and describes courts as “the worst place for couples to resolve their divorce issues”.

The English Family Law Arbitration Scheme set up by the Institute of Family Law Arbitrators is now celebrating its first anniversary, and reports steady progress, with numbers of trained arbitrators reaching double figures. It is still unclear how the courts will enforce the arbitration awards, although the Arbitration Act 1996 is susceptible for the purpose.

The courts too appear to favour the advent of arbitration in such disputes. Although W v M (2012) EWHC 1679 (Fam) relates to a Trusts of Land and Appointment of Trustees Act 1996 dispute, Mostyn J at para 70 said “Where parties are agreed that their case should be afforded total privacy there is a very simple solution: they sign an arbitration agreement. Arbitration has long been available in proceedings such as these. Recently arbitration has also become available in financial remedy proceedings by virtue of the much-to-be-welcomed scheme promoted by the Institute of Family Law Arbitrators. In those proceedings also privacy can now be guaranteed”.

In T v T (2012) EWHC 3462 (Fam) Nicholas Francis QC concluded that where a married couple had entered into a premarital agreement with an arbitration clause, the English court would not restrain the husband from seeking to enforce arbitration in the USA.

Cases such as W v M and T v T set the trend. Now what is needed is the culture change. It will be when parties to a dispute think ‘mediation’ or ‘arbitration’ as the first call, that we will see the proper rise of private dispute resolution rather than reliance on the courts and the lawyers that fan the flames.

Whistleblowing, confidentiality and privilege in mediation

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Following disclosures by David Bowles, former chair of the United Lincolnshire Hospital Trust, Jeremy Hunt, Health Secretary, has warned NHS bosses not to block ‘whistleblowing’; and the government is to investigate the effect and import on such disclosures of the Public Interest Disclosure Act 1998 (PIDA).  

Is the Public Interest Disclosure Act too restrictive? Where there is a public interest need to protect those who disclose information that otherwise should be confidential, should it go further? To what extent is the public interest served by ‘gagging clauses’?

Some would see this as simply and employment law problem. Yet, daily, mediators in many disputes apply confidentiality clauses without necessarily addressing the ethical issues.

Background to confidentiality

Mediation was always ‘a voluntary, without prejudice process, conducted confidentially and managed by an independent, impartial neutral person’.

The Civil Procedure Rules 1998[1] encouraged the use of alternative dispute resolution in civil litigation, especially the use of mediation. In the early days Cowl & Ors v Plymouth City Council[2] and Dunnett v Railtrack PLC[3], the Court of Appeal highlighted the importance of mediation as a ‘without prejudice’ method for people in dispute to settle their differences without outside intervention. It encouraged parties in dispute to use a process that was understood to be a confidential and without prejudice method of resolving conflict.

Mediation privilege developing?

Changes to the model, to mediation practice, and to the definition of mediation have occurred over recent years, especially with the increased use of conciliation, in which mediation is conducted by an appointed person against the back-drop of statutory regulation[4]. There, confidentiality is partially excluded on the basis that this mediation process is underpinned by a positive public law duty to address and defeat discrimination, and that the conduct of the process should be open to scrutiny.

However, the cardinal principle of confidentiality still dominates private law disputes. Sir Henry Brooke[5] said “the confidentiality axiom underlying mediation proceedings constitutes the single most important reason for parties to resort to mediation in the first place”.  Only through a heightened awareness of the issue will we be prevented from “sleep walking into disaster” on this topic. Confidentiality in the mediation process is important and (regulation) should therefore provide for a minimum degree of compatibility of civil procedural rules with regard to how to protect the confidentiality of mediation in any subsequent civil and commercial judicial proceedings or arbitration”.

In Venture Investment Placement Ltd v Hall[6], the court held that “Mediation proceedings do have to be guarded with great care. The whole point of mediation proceedings is that the parties can be frank and open with each other, and that what is revealed in the course of the mediation proceedings is not to be used for or against either party in litigation, if the mediation proceedings fail”.

In Cumbria Waste Management Ltd., Lakeland Waste Management Ltd v Baines Wilson (A Firm)[7] Francs Kirkham J said “In my judgment, whether on the basis of the without prejudice rule or as an exception to the general rule that confidentiality is not a bar to disclosure, the court should support the mediation process by refusing, in normal circumstances, to order disclosure of documents and communications within a mediation”. Later he repeated “ In my judgment, the court should be very slow to order (such) disclosure. Mediators should be able to conduct mediations confident that, in normal circumstances, their papers could not be seen by the parties and others”.

So confidentiality remains a key historic concept in the definition of mediation: the mediation process is conducted without prejudice to any legal proceedings that may follow if unsuccessful; the parties can take a ‘generous’ stance and compromise during the mediation process; one party cannot use what is said in the process against the other in the absence of agreement; parties can divulge issues to an independent neutral mediator without that information being shared with anyone else, whether present or not[8].

Agreed in May 2008 and implemented in May 2011 between the majority of member states, the EU Mediation Directive[9] was designed to regulate cross-border mediation. The directive was part of a developing process in civil and commercial disputes to move dispute resolution away from international and national litigation into local resolution methods.

The directive reflects the increasing requirement and dependence of those in the dispute resolution industry on the use of mediation. In fact national governments across the world are actively looking at introducing mediation as the ‘gate-keeper’ to courts and formal legal process. In some countries this is already the case. Before instigating any claim or remedy, parties must go through the mediation process.

Impact of the European Directive

Directive preamble (23) reads:

“Confidentiality in the mediation process is important and this Directive should therefore provide for a minimum degree of compatibility of civil procedural rules with regard to how to protect the confidentiality of mediation in any subsequent civil and commercial judicial proceedings or arbitration”.

Article 7 of the directive emphasises the importance of the confidentiality principle and the need to ensure its protection. Whilst the directive relates specifically to cross-border disputes, there is a body of opinion that would encourage national governments to adopt the directive into domestic law, creating a unified approach to mediation, whether domestic or international[10]. Will similar or identical provisions develop elsewhere in the mediation field, and if so, how will they be applied to the English mediation process?

Do we have a position?

The debate on the issue of confidentiality in relation to mediation has been re-ignited by the issue of whistleblowing disclosures. How important is confidentiality in reality?

What is the impact of ‘sharing of information’ provisions which are increasingly being required in mediation service level agreements? Should we not be addressing this (and other issues in the wider debate) before we find that such confidentiality rules are made for us by default?

Should confidentiality remain a keystone to the mediation process? If confidentiality of the process were to be removed, what will be the short and long term effects on its viability and take-up? Would there be benefits from opening the mediation process to outside scrutiny?

There is concern about the development of mediation clauses within service level contracts for mediation – requiring the disclosure of the mediation process, behaviour by parties within the mediation process, and disclosure of detail of outcomes to third parties who have not been present and party to the mediation. This mirrors the concern relating to organisations that conduct mediations when their position is not, or may not be independent of the outcomes.

Whilst this development differs from the principle of disclosure in court or arbitral proceedings, it affects the underlying principle that the mediation process should free parties to attempt to sort out their dispute privately without any come-back should their attempts fail, and without the public, or public authorities scrutinising what concessions have been made.

Earlier this year, CEDR’s working party[11] reported:

“We are convinced that confidentiality remains a cornerstone of mediation practice and needs to be observed, protected and delivered carefully so as to help parties open up to each other and to the mediator and indeed to enhance the possibility of settlement without in either case harming their case if settlement does not emerge and adjudication is later required by judge or arbitrator. The security which confidentiality generates is used to encourage greater openness and more disclosure by parties at the right stage and when they are ready”.

Clearly, there are public interest issues to be considered – not least the danger that organisations such as the NHS may use the confidentiality clause in mediation settlements to gag whistleblowers.  But how far should this go? Is it possible, in succumbing to a ‘social need or desire to know’ that the underlying integrity of mediation as a voluntary, without prejudice, confidential and impartial process may be undermined so as to remove the real advantages that mediation has historically offered?  Or, as Jeremy Hunt would have it, should the confidentiality clauses in mediation be lifted on the basis that they may at times work against the interest of the wider public to know what has gone on?

Article 7

Confidentiality of mediation

1. Given that mediation is intended to take place in a manner which respects confidentiality, Member States shall ensure that, unless the parties agree otherwise, neither mediators nor those involved in the administration of the mediation process shall be compelled to give evidence in civil and commercial judicial proceedings or arbitration regarding information arising out of or in connection with a mediation process, except:

(a) where this is necessary for overriding considerations of public policy of the Member State concerned, in particular when required to ensure the protection of the best interests of children or to prevent harm to the physical or psychological integrity of a person; or

(b) where disclosure of the content of the agreement resulting from mediation is necessary in order to implement or enforce that agreement.

2. Nothing in paragraph 1 shall preclude Member States from enacting stricter measures to protect the confidentiality of mediation.


[1] CPR 1.4(2)(e) and CPR 3.1(2)(m)

[2] 14 December 2001: Court of Appeal

[3] 22 February 2002: Court of Appeal Costs Judgment

[4] for example in relation to age, disability and discrimination cases

[5]15 July 2008:  former Lord Justice of Appeal and Vice-President of the Court of Appeal Civil Division: per “The Mediation Directive: What Will it Mean for Us?”: Gordon Blake (2008)74 Arbitration 4 @ p441

[6] (2005) EWHC 625

[7] (2008) EWHC 786

[8] save in exceptional circumstances where a failure to disclose may result in serious harm (PIDA)

[9]Directive 2008/52/EC of the European Parliament and of the Council of 21 May 2008

[10] see David Cornes “Mediation Privilege and the EU Mediation Directive: An Opportunity?” : (2008) 74 Arbitration 4 p.395

[11] CEDR Confidentiality, a Guide for Mediators 31 January 2013   http://www.cedr.com/articles/?317