In some cases, a confidentiality provision is proposed as part of a settlement being negotiated at a mediation. The precise contents of proposed provisions in any release vary from case to case. For example, confidentiality provisions used in the settlement of a consumer product liability case might be quite different than those used in, say, settlement of a professional liability matter or an employment matter. In some of these cases, confidentiality is requested only as to the amount of the settlement. In other cases, more extensive prohibitions on disclosure are requested, and specific consequences of a violation of confidentiality promises are spelled out.
Regardless of the precise scope of any request for confidentiality, counsel preparing for a mediation should take special care to ensure that a request for confidentiality does not needlessly derail attempts at achieving a settlement. In other words, do not allow the way in which confidentiality is proposed to interfere with what might otherwise be a successful mediation.
This article is meant to provide insight into the mediation process. It is not designed to give one side or the other any advantage at a mediation. The types of strategies and suggestions contained herein can be just as useful to plaintiff’s counsel or defense counsel in seeking an outcome at a mediation with which their client will be satisfied.
Below are two important points that counsel should keep in mind.
Put Confidentiality ‘On the Table’ as Early as Possible
Don’t wait until an agreement on a settlement figure has been reached before requesting confidentiality. Counsel should not assume that both sides know confidentiality is going to be requested, and leave such an assumption unstated. Experience teaches that adding a confidentiality request to settlement proposals at the eleventh hour – that is, after the main settlement terms have been accepted – can put an otherwise successful mediation at risk.
com RWare salawus Russell M. Ware is a shareholder with SmithAmundsen LLC, Milwaukee. He devotes the major portion of his practice to service as a mediator in civil matters.
For example, in some cases, bringing up confidentiality only at the end of a mediation might invite a suggestion from the other side that additional monetary consideration is owing if such a new condition is to be added. In such situations, the agreed-on settlement number might be put back into play. From the start of the mediation, negotiations over a settlement figure should be carried on with the mutual understanding that a request for confidentiality has already been factored in by both sides during the ongoing negotiations.
In other cases, if confidentiality is brought up only at the very end of a mediation, momentum toward final settlement may be lost. Although both counsel might be familiar with the concept of confidentiality, one or more of the parties being asked to give a promise of confidentiality might not. Considerable time may therefore be needed to explain the proposed confidentiality, at a time when the parties have just made what may have been a difficult decision to resolve the matter for an agreed-on settlement figure. Bringing up the opposition’s request for a new “concession” (that is, confidentiality) at this stage might not be helpful.
The best practice is to have an understanding throughout the entire mediation process that confidentiality will always be “part of the deal.” This general understanding can be confirmed by the mediator with both sides early on, even before any discussion of a confidentiality provision’s wording – discussed below – need be addressed.
Have a Sample Confidentiality Provision Ready at the Mediation
Even if an agreement is reached at mediation on both a settlement figure and the need for some confidentiality provision in the release, counsel should try to avoid a situation in which disagreements arise over precise wording in a confidentiality agreement when closing papers are later being circulated. Even though all the attorneys involved might be generally conversant with how such confidentiality paragraphs are usually worded, their expectations might not be identical. A disagreement on confidentiality language may therefore actually imperil a settlement that appeared to have been reached at the mediation. Here’s how to avoid this.
Counsel who intends to ask for confidentiality language as a term of settlement should bring an example of such wording to the mediation session, and show it to the other side for approval. If the language truly is appropriate for the case, it will likely be received favorably by the other parties. Then, when the mediator prepares the mediation agreement reflecting the terms of the settlement and includes a notation that confidentiality is part of the agreement, the sample confidentiality paragraph can be attached to the mediation agreement as confirmation of what the parties mean by that term.
Even if the parties wish to discuss more precise language later, an agreement that the final confidentiality provision will be at least “substantially in the form attached” will be helpful. This way, both sides are protected from any postmediation surprises as to how the terms of the confidentiality provision will look.
Requests for confidentiality are often made in certain types of litigated matters and are usually seen by both sides as reasonable and appropriate. If the matter is handled correctly, the need for confidentiality provisions will not be a significant barrier to a successful resolution of the matter at mediation.