Privilege for Settlement Negotiations and Mediation

Two superb articles by senior lecturer in dispute resolution at the University of Auckland Faculty of Law, Nina Khouri

Part 1: Law Commission acknowledges the elephant in the room
The basic appeal of mediation is the opportunity for disputing parties to discuss their problem face to face and craft a mutually acceptable outcome. The feature of mediation that makes this possible is the assurance that statements made in the course of mediation are privileged, meaning they cannot be admitted into evidence if the parties do not settle and the matter proceeds to trial. Parties can therefore feel safe speaking honestly and openly with one another….[read more]

Part 2: So what do you need to know?
Under section 57 of the Evidence Act 2006, confidential communications or documents made in connection with an attempt to settle or mediate a dispute are privileged, meaning they cannot be admitted into evidence if the parties do not settle and the matter proceeds to trial. The problem the Law Commission addresses with its proposed amendment is the current disconnect between the wording of section 57(3), which sets out three exceptions to the privilege, and the manner in which the section is being applied by the courts. In Sheppard Industries Ltd v Specialized Bicycle Components Inc and Anor [2011] NZCA 346 the Court of Appeal recognised additional exceptions based on the without prejudice rule of privilege at common law. The effect of this is to make the reach of the privilege under section 57 uncertain….[read more]

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