Confidentiality Update


Last week the California Supreme Court decided the Cassel case, reversing a decision of the Court of Appeal which had carved out an exception to mediation confidentiality.  The exception applied to certain communications between a party participating in a mediation and his own attorney, which the party subsequently sought to use in support of a malpractice claim against that attorney.  In a previous post on this topic, I argued that while questionable as statutory interpretation, such an exception should not unduly threaten the general principle of mediation confidentiality.  The Supreme Court’s opinion states that it understood the policy concerns that arise from shielding evidence of potential malpractice claims from scrutiny.  Nevertheless, the Court held that the plain language of the confidentiality statute (California Evidence Code Section 1119), compelled the Court to hold that evidence of the alleged attorney-client communications that formed the basis for plaintiff’s malpractice claim should be excluded.  Any exceptions to the broad protection of confidentiality afforded in California are therefore the Legislature’s responsibility.  (Justice Chin’s concurring opinion strongly suggests that the Legislature should revisit this issue.)

I have heard some mediators express concern with prior appellate rulings on this topic, wondering whether mediators should warn parties and attorneys that there might be exceptions to mediation confidentiality.  There might be concerns in the other direction also, now that the courts have re-affirmed a very broad protection for statements made in the course of mediation.  Should we warn parties to a mediation that they most likely have no recourse against not only the mediator, but also their own attorneys, if they believe they receive improper legal advice during a mediation?  I don’t plan to issue any such specific warnings, but I probably will broaden my explanation of the scope of confidentiality in mediation to make clear to the parties that anything that occurs in the course of a mediation most likely may not be used in court for any purpose, whether in the pending case or any related case.

What should cause some concern are the allegations in the Cassel case.  Granted that these are only unproven allegations, and that the attorneys in that case no doubt would have sought to prove that their conduct was entirely appropriate, these allegations illustrate a hypothetical situation that parties, mediators, and attorneys should probably take some steps to guard against.  Cassel contended that he was tired, hungry and ill after 14 hours of mediation.  He claimed that he felt pressured, even “hammered” to settle the case.  He claimed that his attorneys threatened to abandon him before trial, falsely offered to discount their fees if he would accept a settlement, and falsely assured him that he would be able to negotiate a side deal that would enable him to recoup some of the losses he was waiving.  Exhausted and seeing no alternative, he claimed that he finally signed the settlement agreement at midnight without a full understanding of its complicated terms.

Mediators know that it is sometimes not possible to obtain a settlement unless the parties are pushed beyond the bounds of a normal working day.  Mediators generally believe it is worth it to continue the process even when the parties are tired and may not be thinking clearly, because the benefits of settlement in most cases outweigh the costs of continued litigation.  In most cases, parties appreciate those benefits, and often understand that the grueling process that is sometimes necessary was worth it.  They know they might not have been able to obtain resolution without engaging in that difficult and perhaps cathartic process.  On the other hand, there are cases of genuine buyer’s remorse, and there are cases in which parties have felt pressured into accepting a deal.  When parties are pushed to the point of exhaustion, the mediator, and the parties’ attorneys, should take the time to make sure that any resulting agreement was entered into with full understanding of the consequences.   Not just because the Legislature might open up the doors to malpractice actions if enough parties are dissatisfied with what can happen in mediation, but because one of the main goals of mediation should be to help the parties achieve satisfaction with the result.


Get Noticed

Joe Markowitz
Joe Markowitz has practiced commercial litigation for more than 30 years, both in New York City and Los Angeles, and has served as a mediator for more than fifteen years. He is a member of the Mediation Panels in both the District Court and Bankruptcy Court in the Central District of California. He is currently the president-elect of the Southern California Mediation Association.

For Reprint Rights:

Please email [email protected] for pricing.
Direct dial: (949) 702-5390

error: ADR Times content is protected!