Mediation Confidentiality Threatened

New Proposed Amendment to California Evidence Code Might Create Exception to Mediation


Confidentiality has been a hot topic lately.  Under existing California law, when a person participates in mediation for the purpose of settling a civil dispute, anything said in the course of mediation or in the consultation for mediation services is not admissible in evidence in any other action or proceeding.  Last year, in Cassel v. Superior Court (2011) 51 Cal. 4th 113, the Court was unwilling to make an exception to the broad sweeping policy of confidentiality in mediation.  The California Supreme Court in Cassel did not allow a party to introduce attorney-client communications which occurred during a mediation in support of the client’s potential claims against his attorney for malpractice.  Likewise, in Provost v. Regents of the University of California (2011) 201 Cal. App. 4th 1289, the court also refused to make an exception for allegations of duress or coercion.  Both decisions said that amending the statute to allow the use of such evidence was solely up to the legislature.

This spring, assembly-member Wagner introduced California Assembly Bill AB 2025 to amend Section 1120 of the California Evidence Code to add a new exception to the general rule of inadmissibility.  The bill as proposed provides the following: Communications between a client and his or her attorney during mediation are admissible in an action for legal malpractice or breach of fiduciary duty, or both, and in a State Bar disciplinary action, if the attorneys professional negligence or misconduct forms the basis of the clients allegations against the attorney. The Assembly Judiciary Committee had set the hearing on the bill for April 17, 2012, but the committee postponed the hearing date.  Particularly, the bill would be amended as follows:

SECTION 1. Section 1120 of the Evidence Code is amended to read:

Evidence Code § 1120.

(a) Evidence otherwise admissible or subject to discovery outside of a mediation or a mediation consultation shall not be or become inadmissible or protected from disclosure solely by reason of its introduction or use in a mediation or a mediation consultation.

(b) This chapter does not limit any of the following:

(1) The admissibility of an agreement to mediate a dispute.

(2) The effect of an agreement not to take a default or an agreement to extend the time within which to act or refrain from acting in a pending civil action.

(3) Disclosure of the mere fact that a mediator has served, is serving, will serve, or was contacted about serving as a mediator in a dispute.

(4) The admissibility in an action for legal malpractice, an action for breach of fiduciary duty, or both, or in a State Bar disciplinary action, of communications directly between the client and his or her attorney during mediation if professional negligence or misconduct forms the basis of the client’s allegations against the attorney.

The purpose of mediation is to create a “safe place” to allow parties to operate freely in the hopes of reaching a settlement without the shackles of judicial oversight.  Nothing is on the record.  The parties can talk freely with the mediator.  The litigants can actually have a candid conversation.  And based on the number of settlements reached in mediation, this atmosphere works!  Mediation frequently leads to settlement. If this exception passes, there is certainly a fear that one exception to confidentiality will lead to other exceptions. Is it a slippery slope?  It’s certainly up for debate! If you open up the broad protection afforded mediation even just a little, there are legitimate concerns that the entire premise of mediation may be undermined.

One mediator, Phyllis G. Pollack, wonders if this bill will really solve the problem. Pollack cites Cassel and Provost as cases where the mediations got out of hand.  In Cassel, the Plaintiff “accepted” the settlement agreement after 14 hours of mediation where the parties were inevitably tired and hungry and unable to consult with their family given the late hour.  In Provost, the Plaintiff was threatened with criminal actions if he did not sign the settlement that night.  Pollack states that the mediations in Cassel and Provost were “extreme” mediations under Standard VI “Quality of Process” of the Model Standards for Conduct for Mediators (ABA 2005).  Under these model rules, a mediator must ensure the mediation process is procedurally fair and that the entire process is voluntary and uncoerced.

Pollack notes that the proposed amendment creating an exception to mediation confidentiality for fraud, duress, coercion, undue influence, and mistake may be the solution.  However, Pollack also says the following:

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 ensure 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 it means terminating the mediation to get a good night’s sleep… I am not sure that [AB 2025] 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 More from Phillis G. Pollack—

Another Southern California mediator and practitioner, Joe Markowitz, also worries if AB 2025 will really solve the problem.  Markowitz believes the source of the problem is the lack of enforceable standards in the mediation profession.  He cites the following:

At least in California, mediation has no governing body, weak professional associations, and no licensing or educational requirements other than those that may be enforced by various court panels. Mediation has evolving ideas of best practices, but still mainly relies on trust that the mediator will live up to them. Attorneys, by contrast, must abide by rules of professional conduct, and face discipline as well as malpractice claims, if they fail to do so. The exception to mediation confidentiality under discussion can be seen as a way to make sure attorneys adhere to those guidelines whether in a courtroom, or in a secret conference room. They should gain no cloak of immunity from professional standards when they usher their client to a mediation.

Read More from Joe Markowitz—

In reality, cases like Cassel tell us that there is a problem.  Whether or not this bill will solve that problem is unclear.  Markowitz and Pollack seem to think that the best way to maintain the public’s trust in the mediation process is to develop standards for mediators to ensure mediations are conducted fairly, as well as mechanisms to ensure adherence with the standards.  Any ethical standards of conduct imposed on mediators must also be balanced with the importance of maintaining confidentiality in mediation.  After all, the broad protection afforded in mediation is part of what makes mediation so successful.

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