A decision in a costs case handed down earlier this year, Savings Advice Ltd & Anor v EDF Energy Customers Plc [2017] EWHC B1 (Costs) (17 January 2017), prompted me to revisit the importance of the without prejudice and confidentiality provisions in mediation. They are two of the main pillars of the process, essential elements of why mediation works so well and they are universally taught as the core skills for mediators. Occasionally, they are treated as the same but they are not.

There are two lenses through which confidentiality and without prejudice can be viewed and to my mind they are both equally important. The first is the right of the courts to access information considered essential to the administration of justice. It is therefore in the public interest that factual information cannot be suppressed simply because it is inconvenient to one side. As part of his decision in the case, costs judge, Master Haworth said “It is important to separate out the obligation of confidence from privilege. If the obligation of confidence is broken it may give rise to a remedy in other proceedings. However, in my judgment it cannot be used to suppress relevant information in an assessment relating to the costs of the substantive claim.”

The second lens is how confidentiality and without prejudice supports the use of mediation because it assists parties in exploring possible solutions. That is equally in the public interest because it encourages early settlement and reduces the pressures on court time. There will always be a tension between the two which should not be ‘eased’ without careful consideration of the consequences.

Mediation is a very successful process. The outcome of a mediation is without doubt determined by the quality of information and the willingness of parties to exchange information in an environment of trust and confidence. The courts should be very wary of undermining that trust and confidence in the interests of appropriate and speedy resolution of disputes.

Effective confidentiality provides a safe environment where parties can explore options for settlement. If a mediator is obliged to start the mediation with a lengthy session on confidentiality, for example by having to enumerate a long list of exceptions and getting everyone to sign their agreement to those, then the tone of the mediation will be sabotaged and mediation as an appropriately protected alternative environment for dispute resolution will be undermined The place for clarifying what “confidential” and “without prejudice” mean and the exceptions that already exist, is during preparation for the mediation.

Confidentiality is about privacy and the control of information. Without prejudice is about making concessions or admissions in the interests of finding a solution without fear of reprisal in the event that there is no agreement. The control of information, in both formal and informal dispute resolution processes, shapes the quality of the outcome. Relaxing control enhances the chances of an early negotiated settlement and depends to a significant degree on the trust established between the parties, their advisers and the mediator.

Parties usually start cautiously and it is their experience during the early stages of the mediation, stimulated by reciprocity, that encourages them to take considered risks. We should remember that disclosing information is more than a tactical decision. It is also an emotional decision based on the quality of trust established and with the intention of moving the ‘discloser’ into a position of advantage. Information is traded at least as much as concessions are during a negotiation. The negotiation is underpinned by a delicate dance of reciprocity which in turn needs to be carefully choreographed by the mediator for the benefit of all.

Confidentiality and without prejudice bind the essential mixture required for creating choices, assisting in risk assessment and meeting needs and interests. I trust that the decisions of the courts will continue to support that mix in recognition of the role it plays in getting the job done. Mediation is part of the litigation landscape and not an alternative therapy.

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