In Homes v. Navigators Specialty Ins. Co. (E.D. Tex., 2019), the plaintiff filed a complaint, six months later the parties mediated unsuccessfully, and a week later the plaintiff sought to amend the complaint to add new parties. The court denied the motion to amend in part because the plaintiff delayed seven months before seeking to amend when the plaintiff had all the necessary information at the time the case was first filed.
While this holding is fairly straightforward, in its discussion the court noted that had new facts supporting the amended complaint first been learned in the mediation, the amendment might have been timely, because leave to amend was sought only a week after the mediation had concluded. Although not discussed by the court, this poses the challenging question of whether it is allowable to use facts learned in a mediation to amend a pleading, given the confidential and privileged status of all mediation communications.
The answer to this question is far from clear and might vary from state to state. In Illinois, for example, the Illinois Uniform Mediation Act provides that mediation communications are privileged, which means they cannot be used as evidence. This, however, only precludes using a new fact learned in mediation to prove an allegation; it may not be a bar to using a fact learned in mediation to merely allege a new claim.
My standard mediation contract, like those of many other mediators, has the parties agree that mediation communications are confidential and can only be used to resolve the lawsuit. Would a court hold that such a contract precludes amending a pleading based on facts learned in a mediation? Would a court find that amending a pleading was a breach of such a contract and strike the pleading?
While the law is unclear, from a policy perspective using something learned in a mediation to amend a pleading runs contrary to the goal of enabling parties to talk freely in a mediation without fear of statements later being used against them. My takeaway is that one should be thoughtful before revealing a new fact to the other side in mediation, because it is not clear whether any such fact could or could not be used to make a new allegation. One suggestion would be to disclose the fact in confidence to the mediator, in caucus, and discuss the pros and cons of revealing that fact to the other side.