HOW CONFIDENTIAL IS A MEDIATION AGREEMENT?

Written by Graham Perry

25 January 2021

You were appointed as Mediator in an accountant’s partnership dispute. There is a Mediation Agreement signed by the two parties, being the Partnership and the Departing Partner, and by yourself. The Mediation Agreement contains a confidentiality clause. Things go well and everybody is on their best behaviour. You are making progress and there seems an across-the-board desire to bring matters to a satisfactory conclusion. Documents are forthcoming and discussions are proceeding.

You are aware that there are some sensitive issues about the source of past fees received by the firm and these are mentioned in general terms in the Final Agreement but without significant reference. These issues do not develop into key points of disagreement and the mediation proceeds. In due course, an accord is reached. The Departing Partner agrees to leave the partnership upon receipt of a significant capital sum from the Partnership to be paid over two years. These matters are recorded in the Final Agreement – a document to which you add your signature as the Mediator.

Three years later, and without prior warning, you receive a letter from solicitors acting for the Partnership about the source of the past fees. In your response, you “hide” behind the Agreement and draw attention to the confidentiality clause. A few months later you are served with a witness summons to attend a hearing at the High Court initiated by the Partnership alleging fraud by the Departing Partner in the information he provided during the Mediation discussions.

Do you have to attend court? Yes.

Do you intend to answer any question put to you by Counsel of either side [as to your] knowledge of these matters?

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