The basis of mediator liability is and will be grounded in the concept of the mediator as a professional. While there is no all-inclusive definition of a professional, it is generally accepted in Canadian, British and American jurisprudence that there are a number of generally recognized characteristics which apply to a professional occupation:

1. The work being performed is skilled and specialized, derived from training or experience, and it is generally accepted that a substantial part of the work is mental or intellectual rather than manual;

2. Persons engaged in the occupation are expected to be committed to certain higher standards of service and principles not only for the benefit of the client but for the community as a whole; and

3. Persons practising in the profession are members of an association which regulates admission and standards for the profession.

The rise of a profession has been described as follows:

• Professions develop when jurisdictions become vacant, which may happen because they are newly created or because an earlier tenant has left them altogether or lost its firm grip on them. If an already existing profession takes over a vacant jurisdiction, it may in time vacate another of its jurisdictions or retain merely supervisory control over it.

Clearly, mediation is an emerging profession and mediators should expect that their actions will be held to the standards that the courts have imposed on professionals in general. Most cases will arise from the mediator's duty to provide competent mediation services. Unfortunately, at this stage, although there has been much discussion for at least ten years, there is no definition or standard to assist in determining what this actually means.

There is no reason to doubt that mediator liability exists in both contract and tort but of greater concern is the possible expansion of the concept the mediator as a fiduciary to deal with limitations in claims made in contract or tort. While courts have held in cases of special or fiduciary relationships that a rebuttable presumption of undue influence arises from the nature of the relationship, even if there is a fiduciary relationship between the mediator and parties to a mediation, the presumption should not arise because the mediator does not make the parties' decision, is not a party to the mediation and benefits only indirectly from the decision.

It is generally accepted that a cause of action for negligence arises if the following elements are present:

(a)A duty of care exists between the mediator and the party;

(b)There has been a breach of that duty in that the mediator's conduct is negligent or in breach of the standard of care required of him;

(c)Damages have been suffered which have been caused by the conduct of the mediator;

(d)The damage is reasonably foreseeable as arising from the mediator's conduct.

The standard of care of a professional is that of a reasonably competent and diligent professional. To attract liability, it is not enough to prove that the professional has made an error of judgment or not known about some particular part of professional knowledge, but it must be shown that the error or ignorance was such that an ordinarily competent professional would not have made or shown it.

BASIS OF POTENTIAL MEDIATOR LIABILITY

General liability

In one of the earliest articles on the topic, Arthur A. Chaykin divided the liability issues into four groupings:

(a)Liabilities that a mediator may be exposed to that are similar to the liabilities that any business person might face;

(b)Liability pertaining directly to mediation where causation and damages issues are not a barrier to a claim;

(c)Liability pertaining directly to mediation where causation and damages issues are barriers to a claim; and

(d)Liability to third parties effected by the outcome of the mediation process.

Chaykin then went on to set out nine descriptions of potential claims, most of which have not come to pass:

(i)False Advertising;

(ii)Breach of Contract;

(iii)Tortious Interference with Contract or Business Relations;

(iv)Fraud;

(v)Invasion of Privacy;

(vi)Defamation;

(vii)Breach of Fiduciary Duty; and

(vii)Malpractice or Professional Negligence.

The most obvious claims would be for breach of contract and malpractice with breach of fiduciary duty and breach of confidentiality being other areas of significant liability. According to Chaykin, at least three unique features distinguish mediator liability from analyses of other professional liability and make the development of a theory of liability quite difficult:

(a)The parties remain in full control of the process and responsible for the results;

(b)The mediator has no responsibility to third parties; and

(c)Mediators have special immunity privileges which tend to insulate them from liability.

It seems that the leading U.S. case on mediator liability remains Lange v. Marshall in the Missouri Court of Appeal, which, although giving comfort to mediators from the fact that the lawyer mediator in question was not found liable at the court of appeal level, unfortunately does not offer much guidance to us on the actual issue of mediator liability apart from the specifics of the case.

From the Canadian perspective, an article written by Judith Ryan basically saw the same potential dangers for mediators. Although warning that mediators must be cautious about making any expressed or implied representations that mediation will be cheaper, faster, or in some way better than litigation focused on the duty of the mediator to provide competent services and liability that might flow from this requirement which she saw as including an obligation on the part of the mediator to raise all issues necessary for a complete and fair settlement. After reviewing the only reported case in the U.S. to that date, which provided little guidance, the conclusion is that "Lawyer/mediators, therefore, would be well advised to obtain separate liability insurance to protect them against claims made against them in their capacity as mediators".

An 1988 article by Jay Folberg comments that although lawyers have long warned of the liability exposure faced by mediators and the need for defensive practices there had at the time been few claims. This was in contrast to the experiences of other professionals. Little has changed to date.

The primary areas of potential claims were seen to be breach of contract, negligence and breach of fiduciary duty. Folberg correctly points out that there is no established standard to which mediation services can be compared for the purposes of easily establishing liability although he speculated that the rise of cases and complaints against mediators might just be a function of time given the increasing popularity of mediation. Lawsuits and claims against service providers are usually the result of dissatisfaction with the process. Because the parties create the outcome and feel that the "own" the process, they are less likely to be dissatisfied later or to hold the mediator responsible for the result.

Confidentiality

The issue of confidentiality and privilege although separate are linked. A significant amount of the academic and professional journal literature concerning mediation ethics and practice has been concerned with this issue although not from the perspective of potential mediator liability.

In general the common law has given priority to the administration of justice over social values and there is no reason to expect that this view will change in the future. The classic statement regarding privilege was made in 1881 by Master of the Rolls Jessel and is set out in the leading Canadian text on evidence as follows:

• In the first place, the principle protecting confidential communications is of a very limited character. It does not protect all confidential communications which a man must necessarily make in order to obtain advice, even when needed for the protection of his life, or of his honour, or of his fortune. There are many communications which, although absolutely necessary because without them the ordinary business of life cannot be carried on, still are not privileged.... Therefore it must not be supposed that there is any principle which says that every confidential communication which it is necessary to make in order to carry on the ordinary business of life is protected. The protection is of a very limited character, and in this country is restricted to obtaining the assistance of lawyers, as regards the conduct of litigation or the rights to property.

Although the courts have shown some flexibility in expanding, the doctrine of privilege is still quite narrow. The leading case is that of Slavutych v. Baker in the Supreme Court of Canada in 1976 which confirmed the applicability of the Wigmore test. As this had been the basis for the few decisions concerning mediators it is worth setting out the four conditions which are used by the courts as the basis for determining privilege. They are:

1. The communications must originate in a confidence that they will not be disclosed.

2. This element of confidentiality must be essential to the full and satisfactory maintenance of the relation between the parties.

3. The relation must be one which in the opinion of the community ought to be sedulously fostered.

4. The injury that would inure to the relation by the disclosure of the communications must be greater than the benefit thereby gained for the correct disposal of litigation.

The text confirms that before consideration is given to broadening the existing limits of the doctrine of privilege it would have to be clearly demonstrated that the external social policy in question is of such unequivocal importance that it cannot be sacrificed before the altar of the courts.

There is a generally accepted view that mediation is a positive process of dispute resolution. It can be argued that at this time there is no distinct recognized mediator privilege in common law although there is a growing recognition of the central role which confidentiality plays in the mediation setting and that problem will have to be resolved on a case by case basis. Although confidentiality is "the cornerstone for the protection of communications within particular relationships", it alone is not sufficient to attract privilege.

Furthermore an argument can be made that the second part of the Wigmore test does not apply as there is no ongoing relationship between the mediator and the parties, especially in a private mediation setting, and it is obvious that the fourth part is subject to public policy considerations.

In Porter v. Porter, a 1983 decision of Mr. Justice Gravely of the Unified Family Court in Hamilton, the confidentiality of communications which took place in mediation carried out by a psychologist for the parties was ruled to be privileged under the Wigmore principles. The court had concerns over the fourth element of Wigmore's test and that specific consideration led to a mediator being required to testify in a Yukon case where there were allegation of danger to the children involved. In a more recent Ontario case, Mr. Justice Granger, held that although an agreement made through mediation was protected by the principles of privilege under the Wigmore test, during the "evidentiary phase" of the trial, it was admissible as an offer to settle on the issue of costs.

The question of a confidentiality in the arbitration process has been litigated in Lalonde v. Lalonde, where the court allowed the examination of an arbitrator by one party and the use of transcript on appeal. This was a departure from the generally assumed rule that arbitrators are not compellable witnesses on an appeal. If an arbitrator who is acting in an adjudicative role is compellable then so is a mediator.

The obvious solution to this problem, if indeed it is a problem given the Wigmore principles, is remedial legislation. That route has been followed in many American jurisdictions. This was specifically called for by Chief Justice McEachern of British Columbia in a 1987 case where he questioned the jurisdiction of the court to create "a blanket sort of privilege" for mediators.

In the U.S. the Wagshal v. Foster case in 1994 extended absolute quasi-judicial immunity to mediators and case evaluators in the superior court's ADR program. The issue of judicial immunity in the U.S. is closely connected with the development of public ADR. Where the ADR options are statutorily authorized, some legislatures provide for judicial immunity within the legislation or rules. If not, the common law requirement that actual damages be proven to have resulted directly from the mediator's actions may in effect provide some immunity.

For example, the legislation in Pennsylvania protects the confidentiality of statements and documents produced or created for mediation, makes them inadmissible in judicial or other proceedings and non-discoverable. The protection does not apply to documents which existed independently of the mediation or in criminal matters. In Oregon, a recent revision of the law on confidentiality in mediation, the statute distinguishes between "mediation communications" which are confidential and the "mediation agreement". There is different treatment for private parties, non-state agency public bodies or state agency public bodies. With private parties, mediation communications are automatically confidential unless the parties agree otherwise. Exceptions include reporting child or elder abuse, and when one party or mediator reasonably fears serious harm to another. Mediation agreements are not confidential unless the parties agree that they are to be so. With public bodies, mediation is not confidential.

The Ontario Family Law Act provides for mediation as does the Children's Law Reform Act although the recent amendments to the Divorce Act do not. In both cases, the parties can opt for open or closed mediation. If the parties decide on closed mediation, no evidence of anything said or of any admission or communication made in the course of the mediation is admissible in any proceeding, except with the consent of all parties to the proceeding in which the mediator was appointed.

In Ontario, the Government's original proposal for rules covering province wide mandatory mediation, confidentiality issues were dealt with without reference to immunity from claims for the mediator. Statements and documents, if not otherwise subject to discovery, are not admissible in the proceedings, even to impeach credibility. If the parties reach a settlement, details are to be filed with the court, if no settlement only the mediators report is to be filed. The Secretariat's revision is basically the same but eliminates the need to file details of the settlement with the court. There is no mention of mediator immunity in the proposal nor in the discussion paper which is unusual given the practice in other jurisdictions and in the Ottawa project.

Mediators customarily promise confidentiality to all parties, therefore risk of law suit for malpractice. In order to deal with this issue, many mediators contract for confidentiality in their agreements to mediate and the careful mediator also sets out the limits to such confidentiality.

The potential problems with this approach are that the contract is not binding on third parties and if considered, an agreement to prevent evidence being brought forward in court bears the risk of being void for public policy reasons.

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