Consensual Dispute Resolution

Confidentiality in Mediation

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Introduction

Disputes are an inevitable outcome of human interaction. Alternative Dispute Resolution (hereinafter referred to as “ADR”) refers to methods by which dispute can be resolved outside of litigation. There is no perfect resolution procedure and ADR is not a panacea to everything that is wrong with the adversarial system, but it still has benefits over traditional litigation. Not only is there an absence of prolonged procedural delays but also more flexibility in shaping the process and outcome of the dispute. Additionally, relationships are preserved and satisfaction levels are higher. Arbitration, Conciliation, Negotiation and Mediation are different methods for alternate dispute resolution.

Mediation is a form of negotiation in the presence of a third neutral person known as the ‘mediator’, who acts as a facilitator. As opposed to adjudicating, she or he aids parties in negotiating effectively and in the process increases the likelihood of the parties to reach a settlement. One of the most important characteristics of mediation is that it guarantees confidentiality.

What is Confidentiality?

Confidentiality, in the context of mediation, can mean information that is confidential not only between the parties but also between the parties and mediator. A mediation agreement between parties gives rise to rights and obligations of confidentiality, apart from statutory and common law principles. Parties and the mediator must keep whatever happens in the mediation proceedings confidential, which the mediator instructs before proceedings begin. During the proceedings, when a party discloses information to the mediator, he is precluded from revealing it to the other party. This is because of how ingrained the concept of confidentiality is in mediation. The outcome of the mediation does not change the fact that the content mediation proceedings shall not be disclosed.

Legal Position in India

Going by the legal provisions on confidentiality, Rule 19 of the Mediation and Conciliation Rules, 2004 by the Delhi High Court elaborately states that disclosure of any verbal or written proceeding at the time of mediation is strictly prohibited. It also prohibits any kind of recording at the time of mediation. Similarly, some other rules also uphold confidentiality indirectly. For instance, Rule 20 that deals with privacy prohibits the entry of people unrelated to the case. It is also a common practice that a mediator obtains the prior permission of parties before bringing even an assistant to proceedings. The same goes for a party who seeks to bring an additional person along – he or she has to take the permission from the other party and the mediator.

A critical Supreme Court judgement was delivered on 7 January 2011, in the case of Moti Ram (D) Tr. LRs and Anr. v Ashok Kumar and Anr., which offers legal authority on the point of confidentiality. In this case, the mediation report was submitted to the Supreme Court which held that apart from the settlement agreement, all the documents pertaining to the mediation proceeding ought to be kept confidential. It was also held that if there is no settlement reached then the mediator must only state, in Court, that the mediation process was unsuccessful.

In another important case of Rama Aggarwal vs. PIO, Delhi State Legal Service Authority, the Central Information Commission (CIC) held that information related to mediation proceedings cannot be obtained even under the provisions of Right to Information (RTI) Act. It was said that this was one of the exceptions and it is due to the larger public interest in keeping the proceedings of mediation confidential.

Advantages of Confidentiality

Confidentiality is important for several reasons. First of all, it provides security to parties and this ensures full disclosure of information as well as honesty from the parties and mediator during the mediation proceedings. It also helps to creates a kind of psycho-emotional security in the mind of parties and this increases faith of the parties in the mediator also.

It is also crucial in commercial mediations, where it helps parties keep intact the goodwill of their organisations. If their dispute gets addressed in the courts, then the whole public which is related to the organisation in forms like customers, competitors etc. end up privy to the facts of the case. Not only is there a likely loss of goodwill but also the threat of a company’s trade secrets getting leaked. This is, of course, the worst case scenario that might follow if confidentiality is not maintained.

Disadvantages of Confidentiality

The major disadvantage of confidentiality is that parties misuse this privilege given to them, they are opportunistic as there will be no legal harm of anything they say in the mediation process. As a result, sometimes one party may try to dominate the entire process and mould the facts in a way that it gives advantage to them. This can take away from the essence of mediation. Additionally, when cases are transferred to litigation, important issues that were discussed in mediation don’t not get admitted, and the whole process may have to be repeated.

Conclusion

Confidentiality is a huge incentive for parties to opt for mediation. Indian Courts have strengthened the role of confidentiality in the mediation process. Indian laws, as well, are at par with international standards on the issue of confidentiality, and amendments being made wherever there is ambiguity. This is not only specific to mediation but extends to other forms of ADR as well. For instance, in the upcoming Arbitration and Conciliation (Amendment) Bill, 2018, Section 42A is proposed which states that all the arbitral proceedings apart from the award should be kept confidential both by the institutions who facilitate the arbitration as well as the arbitrator. Similarly, it is necessary for mediators to keep the information revealed to the parties confidential and this being recognised by the Indian judiciary proves as a catalyst for the growth of mediation in India.

[This post was written by Divyansh Saluja and Archna Yadav, second and third year students of Jindal Global Law School respectively.]

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