Several weeks ago, I posted a blog about California Assembly bill AB 2025 which would abolish mediation confidentiality in very limited circumstances; namely, in  actions “…for legal malpractice, an action for breach of fiduciary duty, or both, or in a State Bar disciplinary action…” communications directly between the client and her attorney during mediation would be admissible where the professional negligence or misconduct is  the basis of the action or proceeding.

At present, the  Committee on the Judiciary has set a hearing on this bill for April 17, 2012. Anyone wishing to express a viewpoint should  call or write Assembly member Jeff Gorell at telephone: 916-319-2037 or fax:  916-319-2137.

As you might imagine, the e-mail discussions have been vigorous on both sides of the argument. Some believe that to allow this evidentiary exception will open a Pandora’s box of horribles, creating a very slippery slope  while others believe that clients should have a remedy against “bad” lawyers and/or that it is the fault of the mediator for not taking “control” of the situation and preventing a mediation from spiraling out of control.

These comments got me thinking, especially about the mediator not controlling the situation.  At least two of the published cases seem to involve egregious conduct. For example, in Cassel v. Superior Court (2011) 51 Cal. 4th 113, ( Cassel opinion ) the mediation lasted 14 hours during which the attorneys for the plaintiff threatened to abandon plaintiff if he did not settle, misrepresented certain significant terms of the proposed settlement and falsely assured plaintiff that they could negotiate a side deal to recoup some of the money he was losing by settling. Indeed, the plaintiff had actually left the mediation as he was tired, hungry and ill  and wanted to consult with his family; his attorneys called him and insisted that he return. (Id. at 120).

Similarly, in Provost v Regents of the University of California, (2011) 201 Cal. App. 4th 1289, (Provost opinion  ) Plaintiff alleges that during the mediation, “…the mediator told him Regents would have criminal charges filed against him if he did not sign the stipulated settlement that night.” (Id. at  1302.) Thus, plaintiff  argued to the appellate court that coercion and duress were the reasons he settled.

In both cases, the courts held that mediation confidentiality precluded the admission of such evidence: there were no exceptions to this public policy. Neither the Supreme Court  in Cassel  nor the appellate court in Provost  was willing  to make an exception for “good cause” or for fraud, coercion, duress et cetera, stating such was up to the legislature.

But, these “extreme” mediations got me thinking. Under Standard VI “Quality of Process” of the  Model Standards of Conduct For Mediators ( ABA 2005), a mediator is obliged to conduct a mediation that insures the quality of the process including procedural fairness. This means, among other things, that:

“If a party appears to have difficulty comprehending the process, issues, or settlement options, or difficulty participating in a mediation, the mediator should explore the circumstances and potential accommodations, modifications or adjustments that would make possible the party’s capacity to comprehend, participate and exercise self-determination. “

“If a mediator believes that participant conduct, including that of the mediator, jeopardizes conducting a mediation consistent with these Standards, a mediator shall take appropriate steps including, if necessary, postponing, withdrawing from or terminating the mediation.”

What this means to me is if a party is tired, grumpy, hungry, and ill after 14 hours of mediation, (and rightfully so), the mediator should halt the mediation and allow the party to go home and get a good night’s sleep. In Cassel, did the mediator really do any one a favor by keeping every one there for 14 hours? Should the mediator have stepped in and terminated the mediation? In all likelihood, Mr. Cassel would answer “yes”!

Further, to the extent that the attorneys threatened to abandon the plaintiff, such a threat may constitute a violation of the California Rules of Professional Conduct, Rule 3-700 providing that an attorney shall not withdraw from employment until “…the member has taken reasonable steps to avoid reasonably foreseeable prejudice to the rights of the client…”.  Unknown, is whether the mediator was aware of this threat, and if so, whether the mediator did anything about it.

Again, in Provost, the plaintiff settled after being threatened with criminal charges. California Rules of Professional Conduct, Rule 5-100, clearly and unequivocally states that “A member shall not threaten to present criminal, administrative, or disciplinary charges to obtain an advantage in a civil dispute.” But, this is seemingly what counsel for Regents did in Provost. They threatened that Regents would institute criminal charges the next day if Plaintiff did not settle then and there, using the mediator, who may have been an attorney and thus subject to these rules, as the conduit. Again, Standard I of the Model Standards of Conduct for Mediators  entitled “ Self Determination”, provides:

“A mediator shall conduct a mediation based on the principle of party self-determination. Self-determination is the act of coming to a voluntary, uncoerced decision in which each party makes free and informed choices as to process and outcome. Parties may exercise self-determination at any stage of a mediation, including mediator selection, process design, participation in or withdrawal from the process, and outcomes.”

Agreeing to settle to avoid criminal charges is not what one would call “voluntary and uncoerced”.

While many oppose AB 2025 claiming that the cases demanding the exception are far and few between and that, in the main, the absolute veil of mediation confidentiality has done much, much more good than harm, I wonder if perhaps the real issue lies with the conduct (or lack of it) of the mediator. Perhaps, if the mediator had called a halt to the mediation session after several  hours rather than allowing it to continue for 14 hours, there would have been no Cassel v Superior Court to make its way to the California Supreme Court. Perhaps, if the mediator in Provost vs Regents, had refused to carry the message of threatened criminal action on the grounds that it seemed to him/her to constitute unethical conduct, there would be no appellate decision there either. (Indeed, Rule 1-120 of the California Rules of Professional Conduct provides that “[a] member shall not knowingly assist in… a violation of these rules…”)

Perhaps the real solution lies with the mediators and how they conduct the mediation. While Standard I of the Model Rules does call for self-determination by the parties of both the process and the outcome, certainly the mediator does have some responsibility here; he/she should control the process to insure that it is procedurally fair from start to finish. He/she does have the responsibility to make sure that the parties have an opportunity to make informed choices, even if means terminating the mediation to get a good night’s sleep.

Alternatively, perhaps the solution lies with simply creating exceptions to mediation confidentiality for fraud, duress, coercion, undue influence, menace or mistake. Basic contract principles provide that a contract (ie, a settlement agreement) is voidable if the consent to it has not been freely given citing the above as examples of  “not real” consent. (California Civil Code Sections 1565-1578, inclusive.)

So as I re read AB 2025, I am not sure that it really solves the problem of what to do about mediations that have “gone off the rails”. Perhaps the proponents of this bill need to take a fresh look at mediations as a whole and revise the proposal to address the “real” issues.

Read Article—

by Phyllis G. Pollack

Phyllis G. Pollack is a full time neutral in Los Angeles where, as President of PGP Mediation, she focuses on business, real estate, contract and “lemon law” disputes. She may be reached at Phone: 213-630-8810 / phyllis@pgpmediation.com / Website: www.pgpmediation.com