A keystone to the mediation process is the assumption that all that takes place will be held confidential. This means that communications between each party and the mediator, respectively, will not be shared with the other side without permission of the disclosing party. Confidentiality encourages full candor in disclosures to the mediator, including in written submissions. Then if the mediation fails, the parties are assured that none of their disclosures can be used against them in ongoing litigation.

But what about third parties? Does confidentiality in a mediation protect against required disclosures to a third party? No doubt, many participants in a mediation presume that a confidentiality agreement that is entered into before the mediation will protect against all disclosures, to participants and to non-participants alike. Over the last few years, at least one well-reasoned decision by Magistrate Judge Gabriel W. Gorenstein in the Southern District of New York, Rocky Aspen Management 204 v. Hanford Holdings, 394 F. Supp. 3d 461 (S.D.N.Y. 2019), has raised questions whether such disclosures will be protected against non-parties if the mediation is other than court-ordered. A subsequent decision in the same district by District Court Judge Jesse Furman, Accent Delight International  v. Sotheby's (S.D.N.Y. December 2020), rejected this narrow approach and ruled that the standard set out by the U.S. Court of Appeals for the Second Circuit in In re Teligent, 640 F.3d 53 (2d Cir. 2011), should apply to privately convened mediations as well.

This judicial disagreement, combined with the absence of a standardized mediation provision regarding confidentiality across multiple jurisdictions, raises an important concern for those participating in privately convened mediations. How good are confidentiality protections and what further steps can be taken to assure confidentiality, especially as against third parties? The critical point to underscore is that in the absence of national rulemaking, participants in mediations must be aware of the risk of non-confidentiality.