One page summary of the law of confidentiality and privilege as it relates to "negotiation privilege". Prepared March 2015. Australian common law. All errors are the authors. Please do your own research on points that are important to your matter.

1. Dispute Resolution – Confidentiality and Privilege Author: Mark Ellis
What is it about?
What is said in mediations, settlement negotiations and in other DR processes is generally covered by
“negotiation privilege”. It is concerned with “concerned with the admissibility of evidence at trial after the
failure of negotiations.”1 It is a qualified privilege, meaning it does not stand up to all challenges.2 The
privilege may be lost where “the justice of the case requires it.”3
Why is it important?
To encourage disputes to be settled without recourse to the courts: “unless parties to such negotiations can
feel safe in making an offer and stating the facts upon which it is based the door to negotiations may be
closed.”4
What is its legal basis?
It has been said to “protect a litigant from being embarrassed by any admission made purely in an attempt to
achieve a settlement.”5 The favoured view is that it derives form public policy, though implied contract has
also been suggested as helping explain the privilege.6
Required Elements7
1. There must be a dispute
“there must as a matter of law be a real dispute capable of
settlement in the sense of compromise”8
When did the dispute start? Were communications ‘open’?
2. The communications take place between the parties to that
dispute
“express or implied admissions”9; oral communications10; ‘opening
shot’ communications.11
3. Genuinely aimed at negotiating a settlement to that dispute
or part of it
“unequivocally [a] willingness to negotiate”12; related to an
attempt to settle the matter.13
4. Whether or not those communications are expressly stated
to be ‘without prejudice’
The words not required14; Neither are they proof15;“constitute
strong evidence that such negotiations are under way.”16
Limits on the Privilege
1. Reasonably Incidental - “directly connected”17
(i) Cannot sterilise evidence 18
(ii) Independent Facts19 - but may be scope for protection20
(iii) Implications – legal consequences21
(iv) Observation of Physical Events22: “may be required to
answer questions as to physical facts observed which are
relevant to the proceedings.”23
2. Behaviour of a Party
(i) Criminal matters - “perjury, blackmail or other ‘unambiguous
impropriety’”24
(ii) Deception - misrepresentation, fraud or undue influence25;
misleading or deceptive conduct26.
(iii) Unconscionable Behaviour - “a clear statement which is
made by one party to negotiations, and on which the other
party is intended to act and does in fact act, may be
admissible as giving rise to an estoppel.”27
(iv) To Explain Delay/Laches – “evidence of negotiations may be
given ... in order to explain delay or apparent acquiescence.
... limited to ‘the fact that such letters have been written and
the dates at which they were written’”.28
3. Welfare of a Child
“if the welfare of the child is the subject of the enquiry, there
comes a point when it must override any privilege which either
parent may possess…”.29
4. Costs: 'without privilege but for the matter of costs'
The word are “sufficient to enable it to be taken into account on
the question of costs.”30
Extension to third Parties
1. Subsequent Litigation
Once the privilege is established then it is“any subsequent litigation
connected with the same subject matter”31
2. Against the Entire World?
There is authority to support the view that the privilege is good
against the entire world as “restrict its reach to parties to litigation
would be to render the privilege capricious in operation”.32
3. Equitable Duties of Confidentiality
Equitable duties can arise where a third party receives information
that they do know, or should have known that it is confidential. This
can provide a cause of action33
Legislation
1. Evidence Acts
Attempt to encapsulate the common law, but do change it.34 E.g.
S 131(2)(h) costs - “all-embracing exception” to the privilege”35
2. Other Legislative Interventions
E.g. Family Law Act 1975 (Cth): “the legislative provisions are based
on a misunderstanding of the role and importance of assessment or
‘intake’ to dispute resolution.”36
3. Statutory Exceptions – Impact on Privilege
Even if admissions made in “without prejudice” negotiations are
required by legislation to be admitted as evidence, that does not
remove the privilege in respect of other litigation.37 However, if
parties find themselves in this position they should request that the
evidence be held in camera.
1. Harrington v Lowe (1996) 190 CLR 311, 325-326.
2. Rush & Tompkins Ltd v Greater London Council [1989]
AC 1280, 1300.
3. Ibid.
4. La Roche v Armstrong [1922] 1 KB 485, 489.
5. Rush & Tompkins Ltd v Greater London Council [1989]
AC 1280, 1300.
6. Cutts v Head [1984] 2 WLR 349, 367.
7. Ronald Desiatnik, Without Prejudice Privilege in
Australia (LexisNexis Butterworths, 2010), 19.
8. Bradford & Bingley plc v Rashid [2006] 1 WLR 2066,
2091.
9. Field v Commissioner for Railways (NSW) (1975) 99 CLR
285, 291.
10. Rush & Tompkins Ltd v Greater London Council [1989]
AC 1280, 1299.
11. South Shropshire District Council v Amos [1986] 1 WLR
1271, 1276.
12. Buckinghamshire County Council v Moran [1989] 3 WLR
152, 161.
13. Burg Design Pty Ltd v Wolki (1999) 162 ALR 639, 646.
14. Rogers v Rogers (1964) 114 CLR 608, 614.
15. In re Daintrey; Ex p Holt [1893] 2 QB 116, 120
16. Jumitogad Pty Ltd v Garraway [1998] NTSC 680 (9
October 1998), 6.
17. GPI Leisure Corp v Yuill (1997) 42 NSWLR 225, 226.
18. AWA Lld v Daniels (t/as Deloitte Haskins & Sells) and
Others (1992) 7 ACSR 463, 468.
19.Field v Commissioner for Railways (NSW) (1975) 99 CLR
285, 291.
20. AWA Lld v Daniels (t/as Deloitte Haskins & Sells) and
Others (1992) 7 ACSR 463.
21. Tenstat Pty Ltd v Permanent Trustee Australia Ltd
(1992) 28 NSWLR 625, 633.
22. Lock v Lock (1966) SASR 246, 250
23. Ibid.
24. Unilever Plc v Procter & Gamble Co [2001] All ER 783,
792.
25. Pihiga Pty Ltd v Roche (2011) 278 ALR 209, 222-226.
26. Quad Consulting Pty Ltd v David R Bleakley &
Associates Pty Ltd (1991) ATPR ¶41-065, 52019.
27. Unilever Plc v Procter & Gamble Co [2001] All ER 783,
792.
28. Ibid.
29. Hutchings v Clarke (1993) 13 ALR 709.
30. Cutts v Head [1984] 2 WLR 349, 365.
31. Unilever Plc v Procter & Gamble Co [2001] All ER 783,
792.
32. Rush & Tompkins Ltd v Greater London Council [1989]
AC 1280, 1301.
33. Dominik Leimgruber, 'Confidentiality, public interest
and the mediator’s ethical dilemma' (2013) 24 ADRJl
187, 189.
34. Desiatnik, above n 7, 138.
35. Desiatnik, above n 7, 155.
36. Harman J, 'Confidentialityin family dispute resolution
and familycounselling: Recent cases and why they
matter' (2011) 17 JFS 204, 212.
37. Hong Kong Bank of Australia Ltd v Murphy (1992) 28
NSWLR 512, 523.