New Jersey has an important new case that mediators and advocates in mediation should be aware of: Willingboro Mall Ltd. v. 240/242 Franklin Avenue Associates LLC , A-4589-09. The headlines in the news focus on the fact that it held an oral settlement reached in mediation may be enforceable if subsequently memorialized by a writing :”We hesitate to interpret the writing requirement of Rule 1:40-4(i) so rigidly that it becomes an impediment to resolution of a matter through mediation.”
I would like to focus on a different point in the case — the mediator’s privilege not to testify.
New Jersey has adopted a mediation privilege in its rules of evidence:
New Jersey Rule of Evidence 519 entitled “Mediation Privilege” provides that a mediation communication is privileged and shall not be subject to discovery or admissible in evidence in a proceeding unless waived or precluded under limited circumstances. However, the parties to a mediation may expressly waive the privilege, and in the case of the privilege of a mediator, it may be expressly waived by the mediator.
The evidence rule expands New Jersey Court Rule 1:40-4 “Mediation – General Rules” which include a “confidentiality” provision. It mirrors several provisions within the New Jersey Uniform Mediation Act, N.J.S.A. 2A:23C-1 to 13.
In Willingboro the defendant’s counsel sent an email with a draft memorandum of understanding subsequent to the mediation and also undertook to put moneys in escrow — There was no signed writing. But there was a 4-day hearing on a 1-day mediation that resulted in the enforcement of the oral agreement commemorated by an unsigned writing. The court held that all parties and the mediator waived the privilege:
“Here, defendants first breached the confidentiality of the
proceeding by supporting their motion to enforce the settlement
with a certification from the mediator. Thereafter, the
mediator was deposed and testified at trial. The extent of the
waiver was the subject of rulings by Judge Bookbinder during the
deposition of the mediator and at trial by Judge Hogan. We do
not understand any argument advanced by plaintiff to contest
those rulings.”
This is not a good outcome for a mediation or for confidentiality. The clear lesson for mediators is make sure there is a signed writing at the close of the successful mediation, consider asking the parties to draft an agreement or key terms in advance (without monetary terms), and enter into a confidentiality agreement with the parties before the mediation providing that they will not call the mediator as a witness.