A question of confidentiality

Written by Keri Morris, Client Director of FairWay’s Family Services

Introduction

While all discussions that take place during a Family Dispute Resolution (FDR) mediation are confidential, a recent Court of Appeal decision has determined that agreements reached in FDR are not intended to be either privileged or confidential. The case also shows how important it is that FDR mediators do not give advice during mediation.

Question of confidentiality

McKay v The Commissioner of Inland Revenue [2018] NZCA 138 is the first case referring to FDR to reach the Court of Appeal.

The Court of Appeal looked at the question of whether or not a written agreement recording the terms of a settlement reached in mediation under the Family Dispute Resolution Act 2013 is privileged and/or confidential.

The court considered a High Court appeal brought by a father who contended that the Commissioner for Inland Revenue should not be able to use statements contained in a mediated agreement when assessing him as a liable parent. The High Court (Ellis J) had determined that such an agreement was neither privileged nor confidential.

Toogood J affirmed that this was consistent with the privilege preserved in section 57(3) of the Evidence Act 2006. Importantly he noted section 40(1) of the Care of Children Act 2004 which permits any party to an agreement relating to the provision of care or contact to have the terms of the agreement embodied in a court order for enforcement purposes. 

Toogood J expressly rejected the argument raised by the father that privilege is necessary to protect the vulnerable or unwary by noting that access to legal advice and representation and judicial oversight are available through the process of making an agreement enforceable by an application made to the court.

Toogood J also noted the statutory outcomes specified in section 12. He noted that the FDR outcome form makes provision for the details of the agreement to be set out in a document to be attached.  In his view, this approach makes it clear that the agreement is to be shared with others and therefore is not confidential.

Question of advice

The father also reported that the FDR provider had advised that the mediated agreement was confidential to the parties. The father argued in the High Court that he was relying on legal advice given to him by the FDR provider. The court held that the advice given by FDR provider was incorrect in respect of the confidentiality of the written mediated agreement. Toogood J in the Court of Appeal endorsed the approach taken by Ellis J in the High Court.  Ellis J had said:

“The underlying purpose of the privilege [conferred by s 14(2)] is to encourage parties engaged in settlement negotiations to speak freely. To that end, admissions and statements made in the course of those negotiations are protected and cannot be used against the maker, should the negotiations fail to achieve settlement. The overall objective is to facilitate out of court resolution and reduce the necessity for litigation.”

Lessons

Two things come through very clearly from this decision. 

Firstly, mediated agreements in FDR mediations are not intended to be confidential. While discussions held in mediation are confidential, a final written mediated agreement for care of children matters is not. In FairWay’s FDR agreement to mediate this is now stipulated in one of the clauses so that there is no confusion for parties entering the process:

“When agreement is reached about the care arrangements for the children, a Mediated Agreement will be prepared and signed by the parties. Parties may seek legal advice before signing any agreement. No settlement is binding unless and until it is in writing and has been signed by all of the parties. The Mediated Agreement is a parenting agreement and is governed by s40 of the Care of Children Act 2004. If the parties want to have the agreement made into a Court Order, they will need to make an application to the Family Court and provide the Court with a copy of this agreement. The Mediated Agreement is not confidential and may be admissible as evidence before a court.”

Secondly, an FDR provider must not give legal advice. Parties need separate, independent legal advice prior to attending FDR mediation and there can be real value in parties having access to advice before signing any proposed agreement.

Personal reflection

As a mediator, this case affirms the necessary difference in roles that an accredited FDR provider and lawyer should play, and why these separate roles are important.

Mediators are independent and impartial. Their role is to create the environment for constructive and at times challenging conversations, guiding the parties towards a mutually satisfactory agreement and keeping the parties’ interests focussed on the needs of their children. While the mediator may be legally trained, even a practising family lawyer, they must not provide legal advice when they are taking on the role of an FDR provider. It is important for the legally trained mediator to ask a question to clarify any matter of concern rather than make a statement. The difficulty with statements being made is that a party may take the statement as legal advice even if that is clearly not the intention.

The case also highlights the importance of the parties each receiving legal advice. Parties must know their rights and responsibilities under the Care of Children Act as well as being aware of the legal implications of their actions and any agreement they come to. FairWay strongly encourages parties to seek independent legal advice and many of the parties coming through FDR do make use of the Family Legal Advice Service.   

As an FDR provider, I ensure that I give parties time to do what they need to do so that any agreement reached is likely to endure. I encourage them to get legal advice and to take time to consider any agreement that may have resulted from the mediation. I am confident that if the agreement is a good one, it will withstand scrutiny by a lawyer and sometimes the agreement might be improved through that process.

My take on the McKay case is that as an FDR provider, I should concentrate on facilitating the mediation in the knowledge that parents can and should access legal advice at any stage of the process when they think that is necessary. I like being able to focus parents on the needs of the children, confident that any agreement may be reviewed by a lawyer or the Family Court.

Want to know more?

FairWay Resolution is New Zealand’s largest specialist conflict management company. To find out more about Family Dispute Resolution click here or call us on 0800 774 420.