A document originating in a mediation process – confidential or inadmissible
By Adv. Giora Aloni, mediator
Honourable Judge Dr. Gershon Gontovnik of the Tel Aviv District Court issued a guiding judgment No. 52456-08-17 Eliahu et al. V. House on Yefet 186 Jaffa St. Ltd., which discusses the question of whether to accept a request to remove from a court file an appraiser’s opinion, which was commissioned by the mediator within the framework of a mediation proceeding, which was conducted between the parties, and to delete the defendants’ reference to it in their affidavits.
Facts of the case
The above question was discussed in the framework of an Evacuation fees claim that has been conducted between the parties for more than fifteen years. The plaintiff and his late brother were protected tenants in the property in Jaffa. According to the statement of claim, they ran there an old-age home. They evacuated the building at the request of the Development Authority, so that the Israel Land Administration could sell the land as vacant, in order to maximize the profit from the sale of the rights to the land.
As part of the legal battles that have been held between the parties over the years, in one of the appeals procedures concerning a lower court decision, the judge, who discussed the appeal, proposed to the parties to apply for mediation and appointed a well-known mediator for them. During the mediation, the parties agreed to the mediator’s proposal to appoint an agreed assessor who would prepare an opinion regarding the amount of compensation due to the plaintiffs, who were protected tenants in the property that was evacuated. This assessment will be based on data provided to the assessor by the parties (key fees, rents, etc.). It was agreed that the mediator would visit the disputed land, in the presence of the parties, since the building itself had been demolished (even before the permit had been obtained, which was required in accordance with the Tenant Protection Law).
The legal proceedings relevant to our matter
Ten years later, the opinion of the real estate assessors to the mediator was submitted in the claim, which is now being heard before the Honourable Justice Gontovnik, in order to decide on the amount of evacuation fees to be awarded to the plaintiffs. Some of the defendants in the main process referred to the same assessment in their affidavits to the court, and the plaintiffs requested to delete those sections relating to the material from the mediation process. The plaintiffs claimed that the appraiser’s opinion was an integral part of the mediation process, and therefore it is strictly forbidden to mention it or any part of it in the framework of the present proceeding.
The plaintiffs argued that not just the opinion was an integral part of the mediation process, but that if they knew that it would be used outside of it, they would have calculated their steps differently in the course of their conduct with the assessor. And it is certainly not possible to find an agreement on their part for the external use of the opinion outside the mediation process. The Defendants, on the other hand, claim was that the mediator indeed recommended that an assessor will be approached by him on their behalf, but that this work was supposed to be performed outside the mediation process, and the parties were supposed to act based on his determinations. Although the mediator was the one who initiated the initial contact with the appraiser, the assessment was conducted at the end of the mediation process and was not part of it. Alternatively, even if the assessor’s opinion was created within the framework of the mediation process, there are exceptions to the immunity that applies to the matter. In this argument, the defendants rely on the famous verdict of the Honourable Supreme Court Justice Eliakim Rubinstein (retired) in the verdict No. 8769/08 A v. One, in which it was held that when the mediation process did not end with consent, and the preparation of the opinion was within an interim proceeding, then the document can be used in court, since it is not confidential.
Therefore, the defendants claim, this is an opinion prepared in the course of an interim mediation process, and can be used, as it is not part of the confidential procedure. The opinion was not prepared by the mediator but by an external expert, and therefore it should be allowed to be submitted as evidence and its exposure.
Another defendant who did not participate in the mediation process claimed that since he was not a party to the mediation process, he must have the right to use it. The need to discover the truth overcomes the conflicting considerations. The situation in which the opinion is drawn from the case will lead to a disastrous outcome for him. It was also argued that the assessor, on delivering his opinion, did not rely on the internal discussions during the mediation process, and therefore there is no impediment to its exposure. The appraiser relied only on what he himself saw on the site. He visited the property, before it was destroyed, an action, which by nature, can not be done now after the demolition. Therefor, preventing its presentation in the current framework will harm the investigation of the truth.
The court ruling
The base line for this hearing, according to the learned judge, must be found in the provisions of section 79c (d) of the Courts Law [Consolidated Version], 1984 (hereafter: the Law or the Courts Law):
(A) In this section, “mediation” means a proceeding in which a mediator is intended with the parties to bring them to an agreement to settle the dispute without having the authority to decide it.
(D) Matters delivered in the framework of a mediation proceeding shall not be used as evidence in a civil proceeding”.
The rationale behind the provision of the law was discussed by supreme court his honorable Judge Danziger in CA 4416/09 Gabay Architecture and Town Planning Ltd. v. Ribon Architects Ltd:
“The rationale underlying this rule is the encouragement of compromises and the prevention of prolonged litigation within the courts and the desire to encourage and strengthen the existence of alternative frameworks for the settlement of disputes between litigants … Interpretation that allows the presentation of these documents may undermine the rationale of strengthening and encouraging alternative dispute resolution frameworks, Because the parties may fear that statements, representations and concessions to the other side may serve as evidence against them in a legal proceeding, and thus the chances of reaching a compromise between the parties are likely to be harmed. “
This is the rationale, but what is the legal essence of the said provision? That was discussed by the Honorable Justice Amit in CA 4781/12 YM Eini Bakery Ltd. v. Bank Leumi le-Israel ltd – the difference between confidentiality and the inadmissibility of documents that were exchanged during a mediation process:
“When we are dealing with mediation, section 79C (d) of the Courts Law states that “things delivered in the framework of a mediation proceeding shall not be used as evidence in a civil legal proceeding.” The purpose of this provision is admissibility and not immunity, and as is known, the inadmissibility of a document, in itself, can not prevent it from being disclosed.
It seems that the reason for determining an inadmissibility provision in the law is that immunity means that a party is not entitled to review a document held by its opponent, whereas things that were exchanged during mediation are probably (already) known to the other party, and therefore the legislator believed that there was no point in determining the privilege of confidentiality “.
In addition, Section 2A of the “Agreement between the parties and a mediator” set forth in the Annex to the Courts Regulations (Mediation), 1995, includes a commitment of the parties “not to deliver to the court statements made during the mediation process and not to present documents In any matter raised, directly or indirectly, in the mediation process.” This provision corresponds with the provision of the law, which denies the admissibility of mediation products.
At this stage of the judgment, the Honourable Justice Gontovnik raises the question whether the information provided in mediation proceedings is inadmissible, or whether it is falling under the category of confidentiality. Inadmissibility is no equivalence or does not overlap with confidentiality. The confidentiality is not the mediator’s, but for the parties, and therefore it is dispositive and can be waived with the consent of both parties to the mediation process. (The same goes to Inadmissibility as well).
“In my opinion”, says the judge, “the world of mediation, the variety of representations, claims and documents that are exchanged in its framework, does not require a decisive and binarius decision between the laws of admissibility and the laws of confidentiality, and I believe that certain derivatives of information, and others to enjoy immunity (and there are those who fall into the field of inadmissibility both to the field of confidentiality and confidentiality).
Thus, for example, Regulation 5 (e) of the Courts (Mediation) Regulations, 1993 (hereinafter: The Mediation Regulations) states that “the mediator shall not disclose any information given to him during the mediation to a person who is not a party to mediation”. Justice Amit himself interpreted This Regulation as a secret order that can be interpreted as creating relative confidentiality (YM Einey Pastry, Ltd.). Things that one says to the mediator during caucus, that the other side is unaware of them, fall squarely into the realm of confidentiality. On the other hand, take information that is exchanged between all parties to mediation, when everyone is aware of it. This matter can certainly fall under the framework of Inadmissibility, and not the laws of confidentiality”.
In order to underline the importance of distinguishing between immunity and inadmissibility, the judge continues to state:
The discussion of the theoretical essence of the difference between immunity and inadmissibility is not done for intellectual refinement. It can have practical implications.
Assume, for example, that a mediator in a particular process holds an assessor’s knowledge. He himself conducted an appraiser’s opinion to assess the strength of the parties’ argument. His opinion was known to all parties in the procedure he conducted, but the mediation itself failed. The parties appealed to the courts. Is it possible to submit the mediator’s opinion to the court? The answer is negative. In this case, there will be an inadmissibility, and this clearly emerges from the provisions of section 79C (d) of the Courts Law.
Now, assume that after the failure of the mediation process, the parties recruited their own appointed experts, and they wish to submit their opinion to the court. This, of course, is their right. Could they use the mediator’s opinion, which was born within the framework of the mediation process, to formulate their own opinion, which will be submitted to the court? There seems to be no reason why this opinion could not be served as a tool to formulate their opinion. Thus, they will be able to use some of the data in it to establish and strengthen their opinion. If the mediator’s opinion included referrals to certain transactions, which can be reached by independent inquiry, they may be able to rely on such data in their arguments in court. This opinion on their behalf will be submitted to the court, but they will not be able to refer to the mediator’s opinion as evidence; If they will not be able to support their claim independently, without relying on the mediator’s opinion, they will not be able to present the relevant data in the proceedings before the court. But can still be used outside the court.
This illustration shows that there is an inadmissibility apart, and laws of confidentiality separately.
Still, there is a common characteristic of confidentiality and inadmissibility, and that waiver can legitimize the submission of evidence to the court, whether inadmissible or privileged. In the circumstances of our case, such a concession can not be found. The plaintiffs claim that the opinion of the assessor in the mediation process is inadmissible, and against this background the question is whether this is indeed the case.
The yardstick offered by the adjudication
How can we know what document can be submitted to the court, which does not fall within the scope of section 79C (d) of the law? Justice Rubinstein responded to this in the aforementioned judgment:
“The central question – and also the question at the basis of the present trial – is when a document created in the informal mediation room can be forwarded to the formal battle field of the court. A mediation arrangement, as defined in the Law and in the Regulations, can not emerge from the wings of inadmissibility, and only the final product of a mediation proceeding that meets the conditions set forth in Regulation 9 of the Mediation Regulations may be transferred from the mediation room to the courtroom. No other document will be presented to a court.
It is, therefore, necessary to examine whether an agreement has been reached that the document which one of the parties wishes to submit indeed constitutes a “Mediation Arrangement” in accordance with its entire law and statute – a final and binding document that must exist outside the mediation process. Any agreement will be examined on its merits. Thus, for example, it was held that an expert opinion that the parties agreed to appoint as part of a mediation process is inadmissible in a court … because it was given during the procedure and the parties did not seek to exclude it from the confidentiality rule”.
However, since this is a “rule of thumb,” says Judge Gontovnik, caution must be exercised in using it in a sweeping manner, and not every opinion formulated in the course of mediation is inadmissible. For example, says the judge – if a party to the mediation process hired an expert on his behalf to prepare an opinion for him. The same expert does not rely on information received from the mediator, but rather the result of independent examinations and reached conclusions, which he presented during the mediation process. It does not appear that there will be a reason to prevent the use of this opinion in the legal proceedings conducted by the parties. The application of the rule of inadmissibility of section 79C (d) of the Courts Law on this opinion is contrary to common sense and will unnecessarily harm the parties. There is no logic in obliging the party that prepared this opinion to waste additional resources and valuable time in preparing another opinion, simply because it was formulated in the course of mediation. Its preparation is on its own and is not dependent on the information provided in the mediation process. Equally, it could have been made regardless of the mediation process, and in these circumstances, it should be considered as standing on its own.
On the other hand, in this case, the distinction between the laws of non-acceptance and the laws of confidentiality is particularly important. In the case where (in the case of the Hadassah Medical Association, which the defendants relied on), information that was exchanged in the course of the mediation process led one of the parties to order another opinion, submitted in the main proceeding, and the court found nothing to prevent it. Whereas in the case before us, the opinion that was submitted was created by the initiative of the mediator, within the framework of the mediation process itself, and was submitted for review by both parties.
Here we are at the heart of the mediation process, and at the core of the legislator’s provisions that prohibit the admissibility of this opinion.
The decision in the case before us
The judge rejects the defendants’ claim that the assessment was completed outside the mediation process, since after the expertise of the assessor the parties were invited to another mediation meeting, but the mediation failed and it can not be said that the evaluation was given outside the mediation process, but that it was an integral part thereof. Hence, our case falls squarely in the definition of section 79C (d) of the Courts Law. In additionthere is no evidence that the parties were willing, in real time, or in the framework of the proceeding before us, that it would be used outside the mediation process. Therefore, the result is that the opinion is indeed inadmissible.
As for the distinction between relative immunity and non-admissibility it was held:
The defendants’ claim that the publication of the opinion will harm the study of the truth. In this context, it is sometimes possible to remove the immunity if there is a heavy counter-interest that can justify this result, but such a claim can not be useful in the realm of the laws of non-admissibility. It does not matter whether the survey taken in the course of the mediation process can significantly illuminate the dispute between the parties or not. The legislator preferred the interest of the free exchange in the mediation process over the conflicting interests to clarify the truth, so there is no ground to justify deviation from the conclusion that I arrived to”.
As for the claim of the defendant, who was not a party to the mediation process, and therefore there is no restriction on referring to the appraiser’s opinion in his affidavit, it was held that “there is nothing in the fact that this defendant was not a party to the mediation process to change the words of the law: “Will not be used as evidence in a civil legal proceeding” and it does not matter if such parties did not participate at the mediation process. They are not allowed to submit any of this only because they were not directly involved in the exchange during the actual proceedings. If we shall accept such allegation nothing will be left of the meaning and the legislator’s intention imbedded in section 79 (c)”.
The question discussed in this article does not have a direct impact on the mediation process itself, and a mediator can continue to conduct mediation meetings without having to distinguish between privileged and unacceptable exchange of documents or talks. After all, these questions inevitably arise in most cases, after a process of mediation has ended and usually without reaching an accord.
Therefore, this article is intended for those among the mediators, who are interested in deepening and understanding the legal umbrella surrounding the mediation process. After all, in case of the failure of the mediation process, the transition to the legal process is almost mandatory (unless the parties choose an arbitration proceeding that would not be subject to the rules of evidence, but then the procedure would not be subjected to appeal to the court. section 29 (a) of the Arbitration Law).
Perhaps it is possible to think of a situation in which the knowledge from this article can be of benefit to the mediator and to the parties. When, during mediation, the question arises whether to appoint an appraiser or another professional for the purpose of obtaining an opinion regarding the subject matter of the dispute, the mediator may explain to the parties that if he will initiates the referral to the expert, then the opinion that they will receive will be inadmissible in court in case that the mediation fails. Therefore, if each party will refer by himself and in private to seek the opinion of an independent expert who will act independently in formulating the data, and his conclusions will not be presented during the mediation, but will serve as a background and additional knowledge during negotiations with the other party, at least according to the approach of Justice Gontovnik, There will be no objection to relying on this opinion and even to submit it to the court, in any legal proceeding, insofar as it will take place later.