Confidentiality of communications and information exchanged for the purpose of settling a dispute is protected by settlement privilege.
Settlement privilege is fundamental in promoting honest and frank discussion between parties. Parties do not have to worry that the content of their discussions will be used against them later – they are shielded from prejudice or risk of subsequent admissions or settlement offers advanced in this process. This is particularly comforting to family law litigants who are involved in mediation in the hopes of reaching an agreement before having to commence or continue with the adversarial litigation process, as the privilege applies automatically and applies to all communications leading up to a potential settlement, even after the mediation has concluded.
Settlement privilege also has its exceptions. The issue of settlement privilege in the context of family law mediation was addressed by the Supreme Court of Canada in Association de mediation familiale du Québec v. Bouvier, 2021 SCC 54 (“Bouvier”). While a family law case, the Supreme Court of Canada highlights the importance of settlement privilege and the exceptions to it that also apply in civil and commercial cases.
In Bouvier, separated common-law spouses attended mediation with a court-appointed mediator to resolve disputes with respect to parenting, support, and property issues. Following the mediation, the certified mediator provided the parties with a “summary of mediated agreements” (“summary”) – a term used in the standard family mediation contract in Quebec. Later, the Mother filed a court action seeking greater financial compensation than what was provided for in the summary. The Father argued that the parties had entered into a contract during mediation, the terms of which were set out in the summary. The Mother denied the existence of that contract and objected to the summary being admitted in evidence on the ground that it was protected by the confidentiality of the mediation process.