Usually parties who have settled their lawsuit have ways to prove that there was a settlement and what were its terms. They often have something in writing. If one of them has a lawyer, that sort of record is even more likely. And if the agreement is made at a mediation settlement, the mediator will urge them to create such a record, and may try to eliminate misunderstandings or ambiguities.
The contents of any discussions or exchange of information in an attempt to compromise or reach a settlement are usually privileged. They cannot be put into evidence without the consent of all parties. However, there is an exception. If a binding contract was reached, the fact of it and its terms can be put into evidence to prove or to enforce the agreement. In 2014, the Supreme Court confirmed that, in a commercial mediation case.
A recent Supreme Court appeal from Québec examined whether that exception to the privilege applies to a Québec family law mediation. A majority of the Supreme Court held that it does. Three judges dissented (none of them from Québec).
The majority say that if no settlement is reached, preserving absolute confidentiality of communications is essential. It is needed to encourage frank discussions. But if a settlement is reached (at the end or after), the parties need tools to enforce the agreement. After all, the primary objective of any mediation is to reach an agreement to end or prevent a dispute. Any mediation can also preserve relationships. Québec has legislated a culture shift away from the primacy of trials to equal importance of settlements. Mediation offers better access, speed, simplicity, and economy. Mediation is chosen by the parties and gives helps to settle.
The difference is that Québec does not let lawyers attend the mediation. But consulting lawyers is encouraged. In Québec the parties can (if they wish) make a proposed agreement which is not a binding contract. And in Québec, even a binding agreement in a family case is not enforceable until a court reviews it to see if it is appropriate on certain topics of “public order” such as children and child support.
The usual exception to privilege to prove a settlement applies, says the majority. Even in Québec, an agreement after mediation can be proved by evidence. The evidence is limited to what is needed to prove existence or scope of the settlement. That exception to privilege is needed, because like the privilege itself, the exception promotes settlements, by making them enforceable. (If they wish, parties can make a clear contract barring that exception to the privilege, but that was not clearly done here.)
The dissenters said that rules about settlement negotiations in civil or commercial cases do not apply to the family law context, whether as to settlements or as to mediation, especially as it applies to a summary written by the mediator. They emphasized that some people are vulnerable, and so settlement agreements in family law matters may not be binding contracts, for that and other reasons.
So in Alberta, the ordinary without-prejudice general privilege continues. (No Supreme Court Justice questions that.) The exception to privilege to prove or enforce a settlement also applies, even in a family case after mediation. (Whether the general law of contracts or family law outside Québec will in future be modified by the vulnerability doctrine remains to be seen.)
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Justice Côté recently retired from the Court of Appeal of Alberta and currently acts as an arbitrator, mediator, or referee under Rules 6.44 and 6.45 of the Alberta Rules of Court.