A sweeping change in Mediation Confidentiality is currently being studied by the California Law Revision Commission. The Commission, after concurrent resolution of the legislature, has been directed to analyze “the relationship under current law between mediation confidentiality and attorney malpractice and other misconduct …”
The catalyst for this direction to the Commission is likely the California Supreme Court’s 2011 decision in Cassel v. Superior Court ( 51 Cal.4th 113) in which it was determined that mediation confidentiality precludes an action by a client against her attorney for malpractice based on circumstances alleged to have occurred during the mediation. In Cassel, the Court, in J. Chin’s concurring opinion, observed the following, “… but I am not completely satisfied that the legislature has fully considered whether attorneys should be shielded from accountability in this way. There may be better ways to balance the competing interests than simply providing that an attorneys statements during mediation may never be disclosed … As the majority notes the legislature is free to reconsider the question. It may well wish to do so.”
The Commission is doing is precisely what the legislature directed the Commission to do and has been working on a recommendation for over 3 years. For the first time we have received some indication of where the Commission may be headed following their recently completed 8/7/15 meeting. Everyone involved in the mediation process and all who value its effectiveness should have pause for concern here.
In one of staff’s last memoranda to The Commission Staff Counsel listed possible options for the Commission to study and possibly adopt. At its 8/7/15 meeting, the Commission voted to further study options which would:
1) Create an exception for all mediation confidential communications, whether or not the claimed misconduct is within or outside the mediation;
2) Make such a new exception applicable to BOTH the lawyers representing parties in the mediation as well as the mediator if she is an attorney. BOTH the lawyers and the mediator could, therefore, under the foregoing exception, be subject to claims involving possible discipline by the State Bar plus civil litigation claims of malpractice. 3) The Commission was also requested to draft an “in camera proceeding” provision to permit a trial court to judge the type of misconduct being asserted, in which the judge would have discretion to deny the request for such an in camera proceeding. There is no further description provided to us regarding what protocol would govern such in camera proceeding once requested nor the legal effect of denial of such a requested hearing on a claim against a party’s counsel and/or the mediator arising out of the mediation proceeding.
4) The Commission voted to create an exception to all applicable mediation confidentiality provisions set forth in the Evidence Code to allow evidence of claimed misconduct or malpractice to be admissible in proceedings brought by the parties against their attorneys and/or the mediator.
5) The Commission voted to reject any option that would allow a signed mediation settlement agreement to be set aside due to claimed attorney misconduct. Thus, it appears the exceptions will continue to prohibit extrinsic evidence regarding agreement formation, opening the door only for malpractice claims against the attorneys and/or the mediator.
6) Any proposed new exception to mediation confidentiality would permit disclosure only of mediation evidence relevant to the claimed malpractice or conduct.
The above listing of options being considered is not exhaustive and at its next meeting on 10/8/2015 the Commission may further enlighten us on how far they may have gone toward crafting an actual recommendation to the Legislature.
I believe it fair to state that if these proposed changes are actually enacted into law it may well signal the end of mediation confidentiality as we have come to know it.
Knowledgeable mediators and attorneys highly experienced with the mediation process have all suggested that litigants may well be reluctant to engage in mediation unless the process remains fully confidential. One cannot ignore the potential adverse effect the proposed provisions would have on attorneys when they consider whether to recommend mediation when there is the possibility they may be sued by a client or party participant for the advice provided during the mediation. It is fair to also ask how these proposals will affect mediator conduct during not only the in person mediation sessions, but also during calls, emails and other efforts when mediations continue for a period of time, often for days or weeks with the current understanding of continuing confidentiality.
Confidentiality assures frank and candid exchanges among parties, counsel and the mediator without fear of becoming the target of a lawsuit or disciplinary investigation/proceeding by the State Bar for something they may have said, written or done during, before or after a mediation proceeding. The guarantee of strict confidentiality fosters an informal environment where the parties can be forthcoming with a mediator, and the brief respite from the formal procedure and posturing of litigation is often enough to forge agreement among conflicting interests.
The current approach of the Commission is like crushing a nut with a sledgehammer. Attorney malpractice in mediation is exceedingly rare. It certainly should not serve as a legitimate reason to do away with a long adhered to statutory and case law protected body of law that all have come to rely on and utilize over the years.
Mediation settles literally thousands of cases in our judicial system each year. I dare suggest that if these changes are recommended to the legislature and thereafter enacted into law as currently proposed this will no longer be the case. There will become too many reasons to avoid mediation rather than see it as a confidential process whose purpose has been shown to be remarkably effective in resolving disputes so well for so long in California. Simply stated, the limited scope of attorney misconduct in mediations hardly ought to trump the public interest in preserving confidentiality in mediations.
The next meeting of The California Law Review Commission will take place on October 8, 2015, in Davis, California. The Commission has welcomed public comment, and I urge all who read this to make their views known to The Commission so they might be considered in connection with this matter.
-Gary T. Ragghianti