During the holiday season, we tend to see greater numbers of settlements, as some families wish to conclude litigation before celebrating and starting off a new year free of family conflict.

Sometimes, the settlement discussions that appear to be fruitful in (and leading up to) December unravel later on in the winter. A recent decision of the Supreme Court of Canada reviews the issue of confidentiality and settlement privilege in the mediation context.

As other lawyers will know, mediation is a confidential process. If no settlement is reached, the details of discussions at mediation typically cannot be disclosed.  However, where there is a dispute as to whether or not an agreement has been entered into, what happened at , and documents prepared during, the mediation session may become highly relevant.

In Association de médiation  familiale du Québec v Bouvier, 2021 SCC 54, the Court considered settlement privilege and the “settlement exception”, which allows otherwise privileged communications to be disclosed if it is done to prove the existence of a settlement, in the context of mediations with government-certified family mediators. Two spouses had proceeded to mediation to resolve their respective rights, as well as custody and support arrangements, following the breakdown of their relationship. At the end of the mediation, the mediator had prepared a “summary of mediated agreements” document. Later on, one spouse commenced an action seeking additional support. The defendant relied on the terms of the mediated settlement and referred to the summary document prepared by the mediator in support of a binding contract. The plaintiff asserted that the summary was inadmissible because it was covered by confidentiality as a product of the mediation session. The lower court found that a binding contract, the terms of which were informed by the summary document, existed. Appeals were dismissed by both the Quebec Court of Appeal and the Supreme Court. Justice Kasirer wrote:

“Given the significance of the procedural safeguards inherent in family mediation, it is, in my respectful view, an error to insist on the absolute nature of confidentiality. A rule of absolute confidentiality might not only deflect family mediation from its participatory and consensual foundations, but also undermine the parties’ adherence to this process for resolving their dispute, or even to the settlement itself. To reject the settlement exception…in favour of absolute confidentiality would interfere with the primary objective of family mediation, which is to reach an agreement resolving an existing or anticipated dispute. Moreover, the interpretation of the standard mediation contract widely used in Quebec, and of the contact signed by the spouses in this case, supports the conclusion that parties to such a process do not exclude from the outset the settlement exception…Therefore, where spouses enter into a settlement at the end of a mediation process governed by the standard contract, the settlement exception can apply and allow them to file in evidence the communications that are necessary to establish the existence or terms of their agreement.”

While the summary document prepared by the mediator was not considered to be a contract in itself, the parties in their subsequent communications confirmed their intention to be bound contractually by the terms agreed upon at the conclusion of the mediation.

This decision may serve as a reminder to fully document mediated agreements to ensure that they are both enforceable (and, if it becomes necessary, that evidence as to their terms is admissible) in the event that there is a dispute as to whether the parties are contractually bound.

Thank you for reading,

Nick Esterbauer