12th Al Jazeera Forum: Session 4 - Changing Alliances in the Region

 

11/n An Analysis of the UAE’s Commercial Mediation Law, Federal Law No. 6 of 2021, Confidentiality in Mediation, Part 2: A Few Unanswered Questions

In my last post, I set out a framework for analyzing statutes or rules governing confidentiality in mediation.  I will use it to analyze the UAE's Commercial Mediation Law.  In addition, in an earlier post, I also analyzed party control over the disclosure of information exchanged during mediation.

Articles 10, 14, 15, 16, 17, and 18 of the UAE Commercial Mediation Law govern confidentiality in mediation. Unfortunately, the law does not give a specific list of the types of communications deemed confidential. Instead, it provides a very general definition of confidential "information" in Article 14.

In this post, I will consider:

• Who is the holder of the privilege who may prevent the disclosure of confidential information?
• In what subsequent proceedings will confidentiality prevail?
• What is confidential? What is exempted from confidentiality?
• Who can enforce confidentiality?
• Against whom can confidentiality be enforced?
• How absolute should the grant of confidentiality be?
• What is the penalty for wrongful disclosure?     

Who holds the privilege?

Article 1 defines "Parties" as: "The parties to the mediation agreement."

Article 10 makes caucus communications confidential.  It permits the mediator to hold "private sessions with each party . . . but may not disclose to the other party any information that comes to his knowledge within such sessions, without the prior approval of the disclosing party." (Emphasis added.)  This limitation is a big deal!  It makes the parties the holder of the privilege and requires an express waiver of the privilege.  Unlike the Qatar Mediation Law, the mediator may not make disclosures without prior party consent.  The law shifts the burden to the mediator to maintain confidentiality.  A well-trained mediator will confirm what he may disclose before returning to the joint session or before entering a private "caucus" session with the other party. This approach reflects the laws in other jurisdictions that make caucus communications confidential, unless the party specifically agrees to the disclosure of a particular communication.  

Article 14 of the UAE Commercial Mediation Law defines what communications are deemed confidential 9discussed below) and it expressly prevents "the Center, mediator, parties and everyone involved in the mediation process . . . from disclosing any information that comes into existence during the mediation procedures, without the approval of all parties involved . . . . ."  Thus, again, the law indicates that the parties jointly hold the privilege of confidentiality. 

Article 15 prevents a mediator from giving testimony against either party relating to the mediation "unless otherwise permitted by the party concerned or agreed by the parties . . . ."  While this language is not particularly clear, it suggests that the party who made the original disclosure retains the confidentiality privilege over it and can block any attempt to get the mediator to disclose it.

Article 16 requires the mediator to "deliver back to each party all statements and documents initially received from such a party and [she] may not retain the same or any copies thereof."  Accordingly, the parties retain the privilege over any documents shared in mediation.

Analysis

Recall the list in my Part 1 post of possible holders of the privilege:

• Mediator only?
• Parties only?
• All participants?
• Jointly between mediator and parties?
• Parties control disclosures as between themselves.
• Mediator is given means to avoid being compelled to give testimony about the mediation.

The UAE Commercial Mediation Law only mention the parties as the holder of the privilege, but the mediator is specifically precluded from giving any testimony about the mediation..

In what subsequent proceedings will confidentiality prevail?  Who can enforce confidentiality?

Article 14 prohibits disclosure of confidential communications "before any court or any other entity whatsoever."  

Analysis

Recall the list in my Part 1 post of proceedings in which a party might assert the privilege:

• Any subsequent legal or administrative proceeding between the parties?
• Any other context involving the parties?
• In legal or administrative proceedings involving third-parties to the mediation?
• In formal discovery process by the parties to mediation or by third parties?

The language in the UAE Commercial Mediation Law leaves little room for any ambiguity.  It would preclude any subsequent disclosure to any person, court, or administrative body in any context.  Full stop.  This approach is much clearer than the language found in the Qatar Mediation Law, which I discussed here.

Sadly, it may prevent the disclosure of information assembled for research or program accountability or assessment, if disclosed outside the Center's management team.

What is confidential? What is exempted from confidentiality?

- In General

Unlike the Qatar Mediation Law, which included a long list of the communications deemed confidential and a long list of exceptions to confidentiality, the UAE Commercial Law provides a short, but inclusive definition with few exceptions.  Article 14 states: 

• "Mediation procedures shall be of a confidential nature, so such procedures or any documents or information provided within the course of which or any agreements or compromises made by the parties involved may not be involved before any court or any other entity whatsoever. Accordingly, the Center, mediator, parties and everyone involved in the mediation process shall be prohibited from disclosing any information that comes into existence during the mediation process, without approval of all parties involved . . . ."

Parties bound by this rule are the Center, mediator, parties, and "everyone involved in the mediation process."  Thus, the law would also bind third-party witnesses and experts. 

Thoughtfully, the drafters explicitly recognized that only a communication that "comes into existence during the mediation procedures" is confidential.  That distinction was not clear in the Qatar Mediation Law.

Analysis:

Recall the list in my Part 1 post of communications that could be designated as confidential mediation communications: 

• The mere fact of settlement?
• The terms of a settlement?
• Statements made by the parties in the course of settlement discussions – oral or written?
• Acts or conduct of the parties?
• Pre-existing documents, other written evidence, or tangible items disclosed in mediation?
• Documents or other evidence created in mediation process?
• Statements made by or notes of the mediator?
• Appraisals, fact- or legal-expert opinions, etc. obtained to prepare for settlement negotiations?
• Agreement to mediate?
• Communications in setting up the mediation? Even “ex parte” communications with mediator? Intake information?
• Communications made between multiple sessions? 
• Communications made at the time between reaching agreement in mediation and the final execution of the settlement agreement?
• Information assembled for research or program accountability or assessment?

Based on that list, the following communications seem to be protected by the UAE Commercial Mediation Law despite the failure to define "mediation procedures" or the "mediation process" in Article 1.

• Statements made by the parties in the course of settlement discussions – oral and written.
• Documents or other evidence created in the mediation process.
• Statements made by or notes of the mediator.
• Appraisals, fact- or legal-expert opinions, etc. obtained to prepare for settlement negotiations, if the " information . . . comes into existence during the mediation procedures."  The caveat is important. 

Unlike, Articles 10 and 28 of the Qatar Mediation Law that define the length of "mediation procedures" from inception to closure, the UAE Commercial Mediation Law is silent.  Thus, it is unclear if communications in setting up the mediation -- even “ex parte” communications with the mediator -- and, intake information are confidential, including the mediation agreement.  It is also unclear whether communications made between multiple sessions of mediation and communications made at the time between reaching agreement in mediation and the final execution of the settlement agreement are also confidential.  Nonetheless, the term "mediation procedures" should be interpreted broadly to include these types of communications, since the field considers the process as beginning when the mediator accepts the appointment and as ending when the parties sign the final Settlement Agreement. 

Finally, the acts or conduct of the parties are not clearly covered by confidentiality.

A well-trained mediator -- no matter the nature of the applicable law -- will always check with the disclosing party before releasing any confidential information to the other party or any third party.  

- Exceptions to Confidentiality

Article 14 lists only three exceptions:

• unless the information relates to a criminal act,
• the final settlement agreement, and
• "the documents and papers required for [the settlement agreement's] enforcement."

- Confidentiality of Caucus Communications

As noted above, Article 10 permits the mediator to hold "private sessions with each party . . . but may not disclose to the other party any information that comes to his knowledge within such sessions, without the prior approval of the disclosing party." (Emphasis added.)  

- Disclosure of the Settlement Agreement

Articles 18 (for judicial mediation) and 23 (for extrajudicial mediation) of the UAE Commerical Mediation Law require the mediator to provide the Center or court with the signed settlement agreement and a report, presumably the report required by either Articles 16 or 17. 

Thankfully, it does not require the inclusion of any expert's opinion, as does Article 24 of the Qatar Mediation Law.

Taken together, parties have a lot of control over confidentiality in the process. The exceptions to confidentiality are quite limited and reflect more conservative standards for disclosures.

On the other hand, a party or the mediator may disclose:

• Communications made prior to the start of the mediation.  This limitation prevents someone from bringing a pre-existing document into mediation and trying to vest it with confidentiality it did not have previously, like a set of tax documents.
• Communications related to a criminal act. Many jurisdictions grapple with this sort of potentially broad public policy exception, but most mediators would agree that mediation should not be used to further or plan a crime. 
• A party's failure to attend two consecutive sessions of mediation under Article 16.
• The mediator's report to the court about "the outcome of the judicial mediation" under Articles 16 and 18, so long as the report does not disclose confidential information.  This report could disclose the fact that the parties reached agreement in whole or in part; or the fact that the parties failed to reach agreement and, under Article 17, describe "how far the parties and their attorneys are committed to attending scheduled sessions."   I am not sure what the law intends with this part of any mediator report, but it suggests the mediator need only disclose that further sessions would not be beneficial. 
• The settlement agreement under Article 18 and any related enforcement documents.

Who can enforce confidentiality?  Against whom can confidentiality be enforced?

Article 14 of the UAE Commercial Mediation Law does not state who can enforce confidentiality other than the parties and the mediator (by refusing to give testimony).  The same article, as noted above, prevents disclosure of confidential communications "before any court or any other entity whatsoever."

Article 15 prevents a mediator from giving testimony against either party to the dispute without the consent by the party "concerned" or agreement of both parties.  That provision should preclude disclosure of any confidential communications "with regard to the matter of the dispute that is covered by the mediation or any matter arising out thereof, even after the end of the mediation procedures . . ."

Analysis:

Recall the list in my Part 1 post of potential persons who might have an interest in enforcing the confidentiality of mediation communications:

• Parties to the mediation? 
• Witnesses or other participants?
• The mediator?
• Interested non-parties?
• Courts and other public agencies?

The UAE Commercial Mediation Law clearly gives each party the power to enforce confidentiality, but it is silent about whether any other participant (other than the mediator) can enforce confidentiality.  It is crystal clear in stating against whom the parties may enforce the privilege.

How absolute should the grant of confidentiality be?

In my Part 1 post, I set out a number of options for the scope of the privilege:

• Absolute with no exceptions?
• One broad exception: when interests of justice or public policy requires disclosure?
• A list of specific exceptions, like:
• Bad faith
• Past illegal conduct or crime
• Fraud
• Abuse of process
• Threats to commit crime or disclosure of ongoing crime
• Threats to commit child abuse or adult abuse or other bodily harm
• Only when such disclosure is mandated by local law?
• Threats to commit child abuse or adult abuse or neglect by a governmental agency in charge of persons in its care
• Only when such disclosure is mandated by local law?
• Threat of harm to property
• Commission of crime in mediation
• When disclosure is mandated by another state law
• When disclosure is mandated by court or administrative agency

The UAE Commercial Mediation Law adopts the third option by creating confidentiality subject to a very short list of enumerated exceptions.  Frankly, this approach to confidentiality in mediation shows the sophistication of the drafters. Yet, I expect that over time, courts or the drafters will want to expand the list of exceptions or will read the "crime" exception broadly to cover public policy concerns that may arise later.  

What is the penalty for wrongful disclosure?    

Problems arise when someone breaches the confidentiality of mediation. A party can find that enforcing confidentiality is difficult. A party can also have difficulty calculating damages arising from a breach. In my Part 1 post, I suggested several reasons for why parties seek to breach mediation confidentiality.

Unlike Article 30 of the Qatar Mediation Law which provides a substantial monetary penalty for violating confidentiality, the UAE Commercial Mediation Law does not impose any sanction for breach of confidentiality by a party or other participant who is not the mediator.  It only sanctions the mediator for disclosures under Articles 14 and 26. 

Article 14 provides:

• "Should the mediator violate the confidentiality . . . rules set out in this Law, the aggrieved party may resort to the Center for imposing the administrative and disciplinary measures described in Article 26 of this law on the mediator, and without prejudice to the mediator's civil and criminal liability."

Article 26 allows a Center to "deprive the private mediators practicing mediation work before the Center in case they violate the confidentiality . . . . rules."  In addition, Center mediators are subject to the rules and disciplinary measures of the Center and of Federal Law No. 7 of 2012 Regulating Expertise Profession before the Judicial Authorities, an analysis of which is beyond the scope of this post. 

Conclusion

The UAE Commercial Mediation Law provides meaningful protection for mediation communications. Parties hold the privilege to prevent disclosures to "the court" or third-parties and must expressly waive the privilege.  Only the parties can enforce the privilege.  

In addition, the law prohibits the mediator form testifying about the mediation.  The Center can sanction the mediator for wrongful disclosures.  But, neither the court nor the Center can sanction the parties or third-parties for disclosure of confidential information.  

The scope of the privilege is broad, with only three exceptions.   

Next up?  I'll discuss the court's management of the case pending mediation and precautionary measures available to parties while they mediate. 

Also, this reminder:  The 2021 law has now been replaced by Federal Decree-Law No. 40/2023 On Mediation and Conciliation in Civil and Commercial Disputes, issued on September 28, 2023, and effective 90 days after its publication, which is some time in December 2023.  A copy of the English-language version is available here.