Confidentiality in Federal Alternative Dispute Resolution Programs (2000)

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Introduction.
The subject of the document is confidentiality, which is a critical component of a
successful ADR process. Guarantees of confidentiality allow parties to freely engage in candid,
informal discussions of their interests in order to reach the best possible settlement of their claims.
A promise of confidentiality allows parties to speak openly without fear that statements made
during an ADR process will be used against them later. Confidentiality can reduce posturing and
destructive dialogue among parties during the settlement process.

Public comment was solicited on a draft of this document that was published in the
Federal Register at 65 FR 59200, October 4, 2000. The draft was revised to incorporate many
suggestions on the draft received from the following private sector organizations, government
agencies, and individuals from around the country:

American Bar Association, Section of Administrative Law and Regulatory Practice

American Bar Association, Section of Dispute Resolution

Association of the Bar of the City of New York, Committee on Alternative Dispute
Resolution

Executive Council on Integrity and Efficiency

Federal Mediation and Conciliation Service

Martin J. Harty

Lawrence A. Huerta

Oregon Department of Agriculture Farm Mediation Program

Margaret Porter, Administrator, Federal Sharing Neutrals Program

Karen D. Powell

President’s Council on Integrity and Efficiency

Texas Center for Public Policy Dispute Resolution

United States Department of Agriculture, Office of Inspector General

United States Department of Energy, Chicago Operations Office

United States Department of Transportation, Federal Aviation Administration

United States Institute for Environmental Conflict Resolution

Richard C. Walters


Major comments fell primarily into three categories. The first is the interplay of the ADR
Act confidentiality provisions with federal “access” statutes that provide Federal entities authority
to seek access to certain classes of information. The second is the extent of confidentiality
protection for statements of parties made in joint session. The third is the model statement on
confidentiality for neutrals to read to parties at the beginning of a mediation.



The ADR Council believes that the understanding of these issues will benefit from
experience and further collaboration with a broader community. The Council recognizes that its
timetable for comments to this document was limited and wants to make clear that it anticipates
further discussion of these issues. Future research, analysis, and practical experience in the field
are certain to have a continuing impact on these important areas, and this Guidance may need to
be revised or updated. We look forward to cooperation with interested parties in this work.




The Relationship Between the ADR Act and Other Authorities.
The largest number of comments concerned the relationship between ADR Act
confidentiality guarantees and other laws or regulations that authorize access to certain classes of
information. Some commenters suggested that confidentiality should be narrower than provided
under the draft Guidance. For example, some commenters believed that threats of physical harm
and statements concerning ongoing or future criminal activity should not be confidential. Other
commenters stated that Federal statutes providing access for government investigatory agencies
should override the ADR Act’s confidentiality guarantees.



In sharp contrast, other commenters believed that the confidentiality guarantees in the
draft should be much broader. Several commenters argued that the ADR Act prohibitions on
disclosure take precedence over any other Federal statute. These commenters argue that the
ADR Act allows Inspectors General and other investigators to obtain confidential
communications only through a court order obtained pursuant to the Act.
The Federal ADR Council acknowledges the points of view expressed in these comments
but does not concur with them. There does not appear to be an easy answer to the tension
between these authorities. While the ADR Act’s confidentiality provisions are clear, the access
provisions of other statutes are equally clear.



Standard techniques for resolving statutory conflicts do not provide a ready answer in this
situation. For example, arguments have been made on both sides as to which statute is more
specific. While the ADR Act specifically addresses the types of processes to which it applies,
some have argued that other acts, such as the Inspector General Act, do the same by specifically
describing the types of information that may be requested and the purposes for which a request
can be made. Nor does the legislative history of the ADR Act provide an apparent solution, as it
does not appear to contain any mention of this conflict.
A further problem is that the Federal ADR Council is not the appropriate body to provide
a final decision on this question. The Council is an advisory body created by the Attorney General
to issue guidance, but it is not authorized to promulgate binding interpretations in the manner of a
court.



While it is, of course, appropriate to give this matter careful attention, we note that the
circumstances when confidentiality might be challenged are, based on our experience, rare. The
Council believes that there are opportunities for ADR programs and Federal requesting entities to
establish good working relationships such that disputes over demands for disclosure of
confidential communications can be minimized. This report continues to endorse a cooperative
approach of this nature.




In addition, the revised report endorses use of the standards in the ADR Act’s judicial
override provision, sections 574(a)(4) and (b)(5), stating that they should be used both formally,
when available, and informally to resolve the rare instances where requesting entities seek access
to communications protected by the ADR Act.




The Confidentiality of Statements Made in Joint Session.
Many comments were also received concerning the extent of confidentiality protection for
statements made by parties in joint session. The draft report stated that there is no confidentiality
protection for a party’s dispute resolution communications that are available to all other parties,
such as comments made or documents shared in joint session. Commenters noted that the
guidance on this issue differs from traditional ADR practices and party expectations regarding
confidentiality, and said this interpretation could reduce the utility of joint sessions. One
commenter suggested that the report’s interpretation of section 574(b)(7), the key provision on
this point, would render sections 574(b)(1)-(6) superfluous. Further, this commenter noted that
comments by several legislators and a Senate report indicate 574(b)(7) was intended to cover only
documents, not oral statements.



The Federal ADR Council acknowledges that the ADR Act’s treatment of this issue is
different from the practice in many ADR processes that do not involve the government, but notes
that the language of the statute is difficult to overcome. The Act states that there is no
confidentiality protection if “the dispute resolution communication was provided to or was
available to all parties in the dispute resolution proceeding.” 5 U.S.C. 574(b)(7).




Communications in a joint session with all parties present fit squarely within this provision.
Further, the Act’s definition of dispute resolution communication contains no exception for oral
statements. Indeed, it explicitly includes “any oral or written communication prepared for the
purposes of a dispute resolution proceeding” (emphasis added).
Despite the language of (b)(7), it appears that the remaining provisions of 574(b) provide
protection for limited types of communications. These other sections continue to protect, for
example, a party who is asked what a mediator said at any time, or a party who is asked what
another party said in a multi-party case when not all parties were present. With regard to
legislative history, an indicator of Congressional intent is the report of the final Conference
Committee in 1996, when the current statute was enacted. It states, “A dispute resolution
communication originating from a party to a party or parties is not protected from disclosure by
the ADR Act.” H.R. Rep. No. 104-841, 142 Cong. Rec. H11,110 (September 25, 1996). The
Committee could have used the word “document” if it wanted to exclude oral statements, but it
chose to use the term “dispute resolution communication,” which is explicitly defined in the
statute to include oral statements.




The Council does recognize that this provision could hinder a party’s candor in a joint
session, and therefore the Guidance suggests that parties address this issue through the use of a
contract. Confidentiality agreements are a standard practice in many ADR contexts, and their use
is encouraged in Federal dispute resolution processes where confidentiality of party-to-party
communications is desired. It is important to note that confidentiality agreements do not bind
anyone who is not a signatory. Further, such agreements will not protect against disclosure of
documents through the Freedom of Information Act (FOIA). Nevertheless, the majority of
problems caused by the plain language reading of section 574(b)(7) can be rectified through a
well-drafted confidentiality agreement.




The Model Confidentiality Statement for Use by Neutrals.

Finally, many commenters made suggestions regarding the Model Confidentiality
Statement for Use by Neutrals that appeared at the end of the draft report. Some commenters
argued that provisions should be added to the statement to ensure parties were made aware of
additional possible confidentiality exceptions. Others stated that the statement was already too
complex and potentially chilling. The Council appreciates the difficulty in making an opening
statement complete enough to put parties on notice of important issues, while not making it so
exhaustive that it discourages participation in ADR. The Council acknowledges that a welldrafted
statement should accommodate all of these concerns as well as possible.
Other commenters noted that the statement may not be appropriate for all types of
proceedings or all types of neutrals. The Federal ADR Council agrees that the model statement
may not fit all situations and all ADR processes, or even all stages of a single ADR process. In
response to these comments, the Guidance now includes a set of guidelines for neutrals to use in
developing their own statements on confidentiality, appropriate to the situation. It is the neutral’s
responsibility to address confidentiality with the parties. Neutrals and agency ADR programs may
want to develop a standard confidentiality statement, consistent with the guidelines presented in
this report, that is appropriate to a particular ADR process.
The Guidance also includes an example of one possible confidentiality statement. It is
important to note that this statement should be tailored, as necessary, to fit the needs of each
particular case. This statement refers to a mediation, because mediation is the most common
ADR process in the Federal government.




Conclusion.

The balance of this revised report follows the same format as the draft report. Section I is
a reprint of the confidentiality provisions of the ADR Act. Section II is a section-by-section
analysis of the confidentiality provisions of the Act. Section III contains the revised questions and
answers on confidentiality issues likely to arise in practice. Section IV contains the new
guidelines for use in developing confidentiality statements. In addition, as assistance for neutrals
and agencies drafting confidentiality statements, Section IV contains an example of one possible
confidentiality statement.




Nothing in these guidance documents shall be construed to create any right or benefit,
substantive or procedural, enforceable at law or in equity, by a party against the United States, its
agencies, its officers or any other person.

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