Confidentiality of communications and information exchanged for the purpose of settling a dispute is protected by settlement privilege.
As discussed throughout case law and textbooks, 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 parties involved in the family law process 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.
Yet, like many things, 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, the parties were separated common-law spouses and 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 document called “summary of mediated agreements” (“summary”) – a term used in the standard family mediation contract in Quebec, summarizing what had been agreed upon in the mediation. 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.
The Superior Court of Quebec dismissed the Mother’s objection, relying in part on the exception to settlement privilege recognized in Union Carbide Canada Inc. v. Bombardier Inc., 2014 SCC 35 (“Union Carbide”), which allows protected communications to be disclosed in order to prove the existence and terms of a settlement. The trial judge found that the summary and the parties’ post-mediation conduct was demonstrative of a contract between the parties dealing with, among other things, rights to the residence.
The Mother appealed the decision, which was unanimously dismissed by the Quebec Court of Appeal in Bisaillon v. Bouvier, 2020 QCCA 115 – though the judges disagreed with respect to the application of the principles enunciated in Union Carbide in the family mediation context. While the Mother chose not to further appeal the decision, Association de mediation familiale du Québec, a third party to the original litigation, obtained leave to be substituted as appellant and to appeal the Quebec Court of Appeal’s judgment. The Association argued that discussions during family mediation and the summary prepared by the mediator are protected by a rule of absolute confidentiality that is necessary for such a process to function fairly and effectively and that, without such confidentiality, mediation would entail risks for vulnerable spouses.
The Supreme Court of Canada held that, as a general rule, the settlement exception applicable in the context of commercial mediations, recognized in Union Carbide, applies to family mediations. In other words, a settlement exception allows the court to recognize and protect the confidential nature of family mediation while also allowing, as an exception, communications to be disclosed despite confidentiality if their disclosure is necessary to prove the existence or scope of an agreement (para 97). As stated by Justice Wagner in Union Carbide, “Once the parties have agreed on a settlement, the general interest of promoting settlements requires that they be able to prove the terms of their agreement” (para 98).
While the majority decision recognized that family mediation is unique, in the sense that it is often charged and emotional, it did not consider it to be intrinsically different from civil or commercial mediation in terms of its primary objective to prevent an anticipated dispute or resolve an existing one and that it is a confidential process that favours free and open discussions between the parties, and that in some circumstances, parties use mediation to maintain an ongoing relationship over a long period (paras 43, 45-47). This said, the Court was clear that the issues of public order that arise in family cases must not be conflated with civil and commercial conflicts but that “it must be acknowledged that the relational dimension of dispute resolution is not exclusive to family mediation” (para 48).
The Court held that the protection of vulnerable individuals in family mediation is assured by procedural safeguards and that confidentiality in such proceedings is not absolute. Spouses who enter a settlement at the end of a mediation process governed by the standard contract may appeal to the settlement exception to file in evidence the communications that are necessary to establish the existence or terms of their agreement.
Where one party denies an alleged settlement reached in mediation, the settlement exception will allow disclosure of the communications that are necessary to establish the existence or terms of the agreement (but no more than necessary to prove the agreement).
The Court explained that parties can explicitly contract out of the settlement exception. As such, the Court analyzed the mediation agreement signed by the parties at the beginning of mediation and concluded that the agreement was a standard contract containing standard confidentiality clauses and none of those clauses clearly displaced the settlement privilege or the exceptions to it.
Another Possible Objection to the Admission of the Summary of Mediated Agreements
Justice Hogue for the Quebec Court of Appeal raised another potential ground of objection to the admission of a summary prepared by a mediator. Given that an unsigned summary is a simple writing and not a contract, it may not be admitted in evidence as a juridicial act (para 31). A writing produced to prove a juridical act must meet certain conditions in order to be admissible. Her Honour noted that among other things, the summary was not signed, did not emanate from the parties, and was not a document created in the normal course of business activities.
Paragraph 10 of the parties’ mediation agreement stated as follows:
[Translation]
10. We are informed that the Summary of Mediated Agreements prepared at the end of the mediation process will not constitute a legal document nor an enforceable agreement. It will serve to help the legal advisers who will be retained to prepare the appropriate legal documents. We are also informed that the signature of the Summary of Mediated Agreements produces legal effects, even if it is not enforceable, and that it is preferable to obtain independent legal advice [before] signing it. [emphasis added]
Although the Mother in Bouvier did not raise this ground of inadmissibility of the summary, Justice Hogue found that the objection would not have changed the result because the testimonial evidence and post-mediation conduct of the parties could nonetheless have established the existence of a binding agreement, even without the summary.
The Supreme Court of Canada confirmed that the this would have been a valid objection (but not available to the trial judge since the Mother had not raised it) and emphasized the parties can explicitly or implicitly express, including through their conduct, their intention to be bound by terms reflecting those of the summary (para 82). The Court went on to say:
“It is important to note that, in such circumstances, the summary of mediated agreements will not be “transformed” into a contract, even if the parties express a firm intention to bind themselves in accordance with its terms after the sessions have ended. The juridical act will not be formed until there is an exchange of wills subsequent to the mediation sessions, when the parties agree on terms. Even where the parties’ conduct in this exchange shows that they intended the terms of their contract to be exactly the same as those of the summary, the unsigned summary will not be the juridical act itself and will remain a simple writing. This distinction is important, as it affects the admissibility of the summary of mediated agreements in evidence…” (para 83)
Practical Considerations
In the family law context, the mediation process is designed for laypeople to work on resolving their issues privately – in the hopes of avoiding both the significant emotional and financial cost of going through the court process. The typical mediation agreement makes it clear that mediation is confidential, with exceptions such as disclosing information about the mediation where ordered to do so by judicial authority, where required to do so by law, or where the information discloses an actual or potential threat to human life or safety.
Although some mediation agreements are “better” in that they explicitly state that the mediation agreement may not be confidential in relation to the court process and that the mediator may disclose to the court, where appropriate, that a mediation has occurred, and whether or not an agreement was reached, not every mediator has this as a standard clause in their agreements. This means that, unless they consult with a lawyer about their mediation agreement prior to executing it, individuals who are self-represented (and many are), will likely not know about the exception to settlement privilege and their ability to contract out of it prior to executing the mediation agreement.
Practically, this can result in individuals misunderstanding the scope of confidentiality, and like the Mother in Bouvier, being surprised should they come to learn that their post-mediation conduct/actions (in the Mother’s case, cashing cheques from the Father), could potentially meet the conditions of contract formation and be binding on the parties.
Conclusion
Parties to family mediation will not be automatically bound by proposed agreements without having formally consented to them after being given the summary of mediated agreements. Where parties decide to turn to the courts or when a party challenges the agreement’s validity, it will then be up to the judge to determine whether there is an agreement between the parties and whether it is valid.
There is an exception to settlement privilege for the purpose of establishing the existence or terms of a settlement. In such a case, the exception applies only to what is necessary to prove the existence or scope of the settlement. However, this exception in no way weakens the privilege, since there is no longer any public order matter that would allow evidence of the settlement to be excluded where a settlement has been agreed to.
Settlement privilege protects confidentiality of communications and information exchanged for the purposes of settling a dispute, but the privilege is in no way absolute. Parties must keep this in mind during settlement negotiations and decide whether they want to contract out of the exception. It is in the interest of justice for mediation agreements to use simple language to specifically address confidentiality in relation to the court process and the exception to settlement privilege.
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