Union Carbide Canada Inc. v. Bombardier
The Supreme Court of Canada found that a confidentiality clause in a private mediation can override the exception to the common law settlement privilege that enables parties to produce evidence of confidential communications in order to prove the existence or the scope of a settlement. The court explained that if the parties choose to tailor their confidentiality requirements by contract to exceed the scope of the common law settlement privilege, it must be done expressly and with the intention that the clause prohibit the parties from disclosing the terms of settlements for enforcement purposes.
In Union Carbide Canada Inc. v. Bombardier Inc. 2014 SCC 35 the mediation contract was signed on the eve of the mediation. It was a standard form contract provided by the mediator to which no changes were made by either party. To determine if a confidentiality clause displaces settlement privilege, the court considered the wording of the clause, the intent of the parties, the circumstances in which it was formed and the contract as a whole.
The court held that there was no evidence that either party intended to exceed the settlement privilege.
The confidentiality clause in question read as follows:
- Anything which transpires in the Mediation will be confidential. In this regard, and without limitation;
- Nothing which transpires in the Mediation will be alleged, referred to or sought to be put into evidence in any proceeding;
- No statement made or document produced in the Mediation will become subject to discovery, compellable as evidence or admissible into evidence in any proceeding, as a result of having been made or produced in the Mediation; however, nothing will prohibit a party from using, in judicial or other proceedings, a document which has been divulged in the course of the Mediation and which it would otherwise be entitled to produce;
- The recollections, documents and work product of the Mediator will be confidential and not subject to disclosure or compellable as evidence in any proceeding.
TAKEAWAY: If you want override the presumption of settlement privilege and make everything at a mediation confidential, you can, but you need to clearly state that is your intention in the mediation agreement and lose the ability to enforce a potential settlement with evidence from the mediation.