“Business owners rely on trusted advisors such as financial advisors, consultants and CPA’s to provide guidance and expertise to improve their business. When disputes arise between business partners, family members, company executives, venders or anyone else, they may turn to those same advisors to facilitate meetings with the participants or formally or informally talk with them in an attempt to find a solution. These types of “mediation” can be helpful but your advisors may later be compelled to disclose what transpired in those meetings in the event of litigation. A confidential option to protect the content of meetings would be working with a Mediator. The article below discusses the confidentiality protection for Participants.” Joanna Wares is an experienced non-attorney mediator and arbitrator practicing in the areas of business and family.
Mediation can be private or as part of a court alternate dispute resolution program. In Nevada, when mediation is conducted as part of one of the various court mediation programs, communications to the mediator during mediation are treated as confidential. If the parties agree to a settlement, the terms of the agreement may be introduced. Said another way, communications and statement made during mediation are confidential, but, the terms of a written signed settlement agreement are not. (NMR 11). This makes sense because once an agreement is reached; the parties need to be able to enforce the agreement.
So what do we mean by confidentiality? Mediation is intended to promote candid and open discussions. During a discussion a statement may be made that could later be construed to be an admission of fault. Under the Nevada Mediation Rules, either party may refuse to disclose any discussion or admission made during the mediation. More importantly, either party can prevent the other party from introducing evidence of a statement against the other party in any later court proceeding, whether made orally or in writing (NMR 11).
Suppose a party wants to call the mediator as a witness? In Nevada, mediators have the same statutory immunity as a court appointed arbitrators (NRS 48.109). In broad strokes, what this means is that the mediator is immune from civil liability to the same extend as a judge acting in his or her judicial capacity (NRS 38.229 (1), (2)). Also, the mediator is not subject to any civil process that would require the mediator to disclose any matter discussed during the mediation process. The mediator cannot be required to produce records of statements, conduct or a decision occurring during the mediation. This is intended to encourage frank and open discussions without the fear of later being haunted by a statement made during the mediation.
This brings us to private mediation. Private mediation is mediation outside of the court’s supervision. It is extremely useful to help resolve issues before things get to the point where people are threatening to sue each other. Almost universally, parties to a private mediation sign an agreement to mediate that lays out the voluntary nature of mediation and the conduct of the parties. Parties obtain the same protections as court supervised mediations by stipulating that the Nevada court rules and statutory protections will apply to the private mediation.
-Donald Lowrey, Esq.
Donald Lowrey is a Nevada attorney practicing arbitration and mediation in the areas of tort claims, business conflict, partnership issues and litigation.