How Confidential is Confidential?

Can a mediator use confidentiality selectively as a tool, compromising it at the margins when the mediator believes doing so will promote the settlement process?

Statements by parties in mediation are not admissible in court, either by court rule or by agreement of the parties when entering into mediation. (If there is no court rule, the parties entering into the mediation must address the issue with the mediator in a written agreement before the mediation begins). Likewise, the mediator may not be called to testify regarding the subject matter of the mediation in any court proceeding. (Section 8 of the Uniform Mediation Act speaks to confidentiality where enacted.)

With this confidentiality privilege in place, the parties are encouraged to seek a settlement without recourse to strategic behavior. Strategic behavior is the sort of bluffing, posturing and otherwise negotiating in bad faith that parties often engage in when when negotiating face to face without a mediator. The mediator's role is to entice concessions by each party without each party fearing that it will be taken advantage of by the other party. Confidential caucus sessions are one means to do this, since the mediator can try various approaches out on a party in confidence, without the other party present to opportunistically sense weakness or doubt. This is a second level of confidentiality in mediation: without a party's consent, that party's statements in caucus cannot be conveyed by the mediator to the other party, as well as to the outside world. In other words, what is said in the Vegas of the caucus stays in Vegas. (Of course, the mediator often struggles to keep each party in caucus simply from engaging in the same strategic behavior with the mediator that the parties engage in with each other).

This second level of confidentiality in a caucus can help the mediator gain a better understanding of a party's interests, objectives and thought process when pursued in isolation. A mediation may involve more shuttle diplomacy by the mediator, going into separate causcus rooms with each party in an effort to bring each party closer to a range of compromise, than there is discussion between the parties with the mediator present in open session.

The mediator will often want to communicate to the other side some movement or concession granted by a party in caucus, and it is in that party's interest for the mediator to do so if that party believes the mediator will be able to obtain a reciprocating concession from the other party in the other party's causcus. To do this, the mediator obtains the explicit permission of the party in caucus to make that communication.

That is the theory, but in practice every party wonders whether it can be confident that what is said in caucus will be faithfully represented by the mediator, if permission is granted, or indeed not communicated by the mediator if permission is not granted. This is the underlying tension of the caucus process, and only the adept and trusted mediator can reduce it to an acceptable minimum so that it doesn't inhibit the settlement process.

The mediator must build trust with the parties in order to encourage honest and open discussion in caucus, but many parties, at least initially, view the mediator with suspicion. At some point in a mediation, if the mediator senses that a party in caucus is not being honest and forthright, or is resisting making concessions that are well within that party's capacity, the mediator may feel the need to take a step that tests the confidential relationship with a party in caucus.

For example, suppose that the mediator in separate caucus sessions finds that one party expresses a belief that it has a 60% likelihood of prevailing on the merits, and the other party believes it has a 95% chance to win in court. Based upon a summary inquiry into the parties' statement of the facts that gave rise to the conflict and the mediator's understanding of the applicable law, the mediator thinks the second party is not being realistic. Understand, the mediator has no substantive view of the merits other than to try to assess whether each party is being realistic. Once a mediator reaches a view on the merits, is the mediator still being neutral?

If a party is not being realistic, in the good faith assessment of the mediator, the mediator has found a pivot point: the mediator must work with the unrealistic party to assess the underlying assumptions and arguments that is causing the unrealistic party to maintain excessive confidence. This excessive confidence by the unrealistic party is the pivot point that the mediator must resolve in order for the parties to approach a range of settlement. The settlement pivots around whether this obstacle is overcome.

If the mediator is not able to move the unrealistic party off of his excessive optimism in caucus, and the unrealistic party insists on complete confidentiality regarding their confidence, the mediator faces a difficult situation since the realistic party will want to get some assurance of movement by the unrealistic party before it contemplates movement. If the mediator has nothing new, much less encouraging, to report to the realistic party about the unrealistic party's caucus session, the mediator is stuck at the pivot point.

Suppose the mediator tells the unrealistic party in causcus that the mediator is prepared to go into open session and state that the unrealistic party is being unrealistic and is frustrating the mediation effort. In essence, the mediator would be seeking to shame the unrealistic party into adopting an attitude more conducive to settlement. A high stakes gambit, but the mediator may consider this if the process is stuck at the pivot point. Does this violate the mediator's neutrality? The mediator would argue, no, that it has assessed the parties' self-expression of their likelihood of success in a neutral manner, and it is because of this neutral analysis that the mediator has reached the judgment that one party is being unrealistic.

The greater question, in my mind, is, Does this violate the mediator's confidentiality? The mediator has only come to this conclusion based upon a confidential caucus discussion with the unrealistic party. The unrealistic party will feel its caucus confidences violated, since had the unrealistic party known this would be the result of the discussion, the unrealistic party would likely not have been as forthcoming in the caucus.

Is it better for the mediator to not rock the boat in open session, and "merely" express the mediator's view of the unrealistic party to the realistic party in a subsequent caucus? Is it better, in other words, to violate the confidentiality with the unrealistic party in secret? When the realistic party asks in the subsequest caucus how things went in the caucus with the unrealistic party, what can the mediator say? Is the caucus process, when observed in the cold light, someting akin to a sausage factory?