Mediator liability can arise from several potential contexts, including liability for breach of contract (ie Agreement to Mediate), tortious liability (eg defamation, fraud, existence of conflict of interest, breach of fiduciary duty, professional negligence, breach of confidentiality agreement etc.), or even criminal liability in serious cases. Despite mediator immunity having being identified as one major legal issue across different jurisdictions, very few court judgments have touched on this issue; there is so far yet no reported case in Hong Kong that sheds light on such workings.
In a landmark Australian case called Tapoohi v Lewenberg (No 2), the mediator (who was a Senior Counsel) was allegedly professionally negligent in concluding a mediated settlement agreement without taking into account a value-added tax implication. The Australian Court in that case held that duty of care did exist between the mediator and disputing parties. This case however, never proceeded to full trial for the court to rule on the issue of mediator immunity after the parties reached a settlement.
In the US, some states such as Iowa and Arizona lay down that mediators are entitled to “Qualified Immunity”, such that mediators will not be liable for statements or decisions made in the mediation process except where acting in bad faith, with malicious purposes or in a manner exhibiting willful and wanton disregard of human rights, safety or property.
As of today, mainland China is one of the jurisdictions that does not regulate on the issue of mediator immunity. That said, Article 15 of the People’s Mediation Law sets out a few circumstances whereby a mediator shall be “criticised, educated or ordered to correct”: 1) showing favouritism to a party; 2) insulting a party; 3) asking for or accepting money or goods, or seeking for other illicit benefits; or 4) divulging the individual privacy or trade secret of a party.
Way Forward for Mediation Ordinance (Cap. 620) (“MO”) in Hong Kong
In Hong Kong, Section 104 of the Arbitration Ordinance (Cap. 609) (“AO”) states that an arbitral tribunal is liable in law for acts done or omitted, if done dishonestly. Under this ordinance, such qualified immunity position will also be extended from arbitral tribunal to mediators who are appointed and conducting mediation under the arbitration framework. That being the case, however, for mediation conducted outside the arbitration context, it seems that there is still so far no provision (either in the AO or the newly-enacted MO) that regulates such a position.
Arguably, the issue of mediator immunity is not whether it should exist, but rather the extent of its scope and depth. Only by providing clear legislation on the issue of mediator immunity can general public confidence in mediation strengthen and grow.