15.167 Section 131 of the uniform Evidence Acts provides that evidence is not to be adduced of a communication that is made in connection with an attempt to negotiate a settlement, including communications made with third parties. The section applies only to civil matters, and not in relation to negotiations concerning criminal charges.
15.168 A number of exceptions apply to this general statement, including: where the parties consent; where the substance of the evidence has been partly or wholly disclosed; where the communication included a statement that the communication was not intended to be confidential; or where making the communication or preparing the document affects a right of a person. The exceptions were developed along similar lines to those established under the common law.
15.169 In ALRC 26, the ALRC noted that the primary rationale given for the protection was the public interest in encouraging settlement of disputes. The Acts mirror a similar ‘without prejudice’ privilege available at common law, where the judge may exercise his or her discretion to admit evidence of settlement negotiations as part of the inherent jurisdiction of the court. As under the Acts, the court must be satisfied that the communication is genuinely intended to be an attempt at settlement.
15.170 Matters where the court has admitted evidence of settlement negotiations under s 131 include:
an offer of compromise on the matter of costs, as it fell within the exclusion under s 131 relating to liability for costs;
a letter headed ‘Without Prejudice’ which suggested a willingness to settle but did not suggest a specific compromise of the dispute. It was held not to be an attempt to negotiate a settlement of a proceeding; and
an offer of settlement in regards to costs which reserved the right for it to be tendered in court.
15.171 In The Silver Fox Pty Ltd v Lenard’s Pty Ltd (No 3), it was found that the wording of s 131 was clear.
Section 131(1), subject to its exceptions, gives effect to the policy of ensuring the course of negotiations—whether private or by mediation—are not adduced into evidence for the purpose of influencing the outcome on the primary matters in issue. Clearly, it is in the public interest that negotiations to explore resolution of proceedings should not be inhibited by the risk of such negotiations influencing the outcome on those primary issues. It is equally in the public interest that negotiations should be conducted genuinely and realistically. The effect of s 131(2)(h) is to expose that issue to inspection when costs issues only are to be resolved. There is no apparent public interest in permitting a party to avoid such exposure by imposing terms upon the communication, whether by the use of the expression ‘without prejudice’ or by a mediation agreement. 
15.172 In response to IP 28, the Commercial Bar Association of Victoria suggested that these decisions are consistent with what would be the expected results at common law and are evidence of the straightforward application of the provisions under the Acts.
15.173 One issue that was raised in response to IP 28 was whether s 131 covers negotiations that take place in the course of mediation. In DP 69, the Commissions asked whether there are any difficulties with the operation of s 131 of the uniform Evidence Acts and, in particular, if there are any difficulties with statements made during mediation, that may not be covered by the privilege.
15.174 There is some support in the case law for the proposition that mediation agreements fall within the scope of s 131. In Lewis v Nortex Pty Ltd objections were taken on the basis of s 131 with regards to certain documents that had been used in the course of mediation. Hamilton J stated that ‘there is no doubt in this case that the documents fall within s 131(1) … It is common ground that it is a document that was prepared in connection with a formal mediation … in order to resolve the dispute between these embattled parties’.
15.175 Communications made in a mediation that is ordered by a court are often privileged under the legislation of that court, and have been found to be excluded from s 131. For example, in Rajski v Tectran Pty Ltd,Palmer J noted that s 131(1) deals with evidence which may have otherwise attracted the ‘without prejudice privilege’ rules concerning communications between parties for the purposes of negotiating a dispute. He held that s 131 is ‘not intended to apply to the special process of settlement negotiation provided by a mediation ordered by the court under the provisions of Part 7B of the Supreme Court Act’ and that the rules in Part 7B of Supreme Court Act ‘override the general provisions of the Act’.
Submissions and consultations
15.176 Few submissions were received on this issue. It was noted that there is not a great deal of case law on s 131 and mediation. This may mean that the section works well, is not often invoked, or that it is not being utilised by mediators to protect communications.
15.177 The Commissions were told in consultations that most mediators tend to rely on the specific confidentiality provisions located in other state and federal statutes, such as the Family Law Act 1975 (Cth), the Community Justice Centres Act 1983 (NSW) and the Farm Debt Mediation Act 1994 (NSW) to protect them from having to disclose matters discussed in mediation rather than s 131. Confidentiality agreements are also a feature of most specific mediation contracts (where the parties agree to keep the content of the mediation proceedings confidential on a ‘without prejudice’ basis). Many mediators are aware of the common law ‘without prejudice’ privilege provisions, although it was noted that the extent of the common law privilege on settlement negotiations is uncertain (for example, whether it extends to documents prepared before or produced as a result of the mediation).
15.178 It was also noted that issues may arise from the manner in which an agreement was reached in mediation. For example, a party may allege misconduct or duress on the part of a mediator or the other party. It was put to the Commissions that it is not clear if the exceptions in s 131 covers that situation, although it may fall under the exceptions in s 131(f), where the making of the agreement is in issue, or paragraph (j), where the communication was made in furtherance of a fraud or offence.
15.179 From the Commissions’ survey of the case law, it appears reasonably well settled that evidence of matters discussed at mediations falls within s 131. While the section could be amended to adopt the terms of a mediation privilege as expressed in Acts such as the Federal Court of Australia Act 1976 (Cth), in the absence of strong submissions suggesting that such action is necessary, it is the view of the Commissions that amendment of s 131 is unwarranted.
 Australian Law Reform Commission, Evidence, ALRC 26 (Interim) Vol 1 (1985), .
 B Leader, ‘Public Interest Privilege’ (Paper presented at Australasian Government Solicitors Conference, 19 November 1992), 1.
Bruinsma v Menczer (1995) 40 NSWLR 716.
GPI Leisure Corporation v Yuill (1997) 42 NSWLR 225.
Bloom v Mini Minors (Unreported, Supreme Court of New South Wales, McClelland J, 28 August 1996).
The Silver Fox Company Pty Ltd v Lenard’s Pty Ltd (No 3) (2004) 214 ALR 621, .
 Australian Law Reform Commission, New South Wales Law Reform Commission and Victorian Law Reform Commission, Review of the Uniform Evidence Acts, ALRC DP 69, NSWLRC DP 47, VLRC DP (2005), [13.269]; Commercial Bar Association of the Victorian Bar, Submission E 37, 8 March 2005.
 Australian Law Reform Commission, New South Wales Law Reform Commission and Victorian Law Reform Commission, Review of the Uniform Evidence Acts, ALRC DP 69, NSWLRC DP 47, VLRC DP (2005), Question 13–13.
Lewis v Nortex Pty Ltd  NSWSC 1245.
 Ibid, .
 See, for example, Federal Court of Australia Act 1976 (Cth) s 53B, which states that evidence of anything said, or of any admission made, at a conference conducted by a mediator in the course of mediating anything referred under section 53A is not admissible in any court (whether exercising federal jurisdiction or not); or in any proceedings before a person authorised by a law of the Commonwealth or of a state or territory, or by the consent of the parties, to hear evidence.
Rajski v Tectran Pty Ltd  NSWSC 476.
Rajski v Tectran Pty Ltd  NSWSC 476, . Part 7B of the Supreme Court Act (NSW) has now been replaced by Part 4 of the Civil Procedure Act 2005 (NSW).
 R Carroll and M Harries, Consultation, Perth, 7 October 2005.
 H Astor, Consultation, Sydney, 2 August 2005.
 Justice R French, Consultation, Perth, 5 October 2005.