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From the Disputing Blog of Karl Bayer, Victoria VanBuren, and Holly Hayes.
The California Supreme Court has ruled that private attorney-client communications related to a mediation remain confidential communications protected by California’s Evidence Code even during a legal malpractice lawsuit between the parties.
In Cassel v. Superior Ct., No. S178914, (Cal. Jan. 13, 2011) Michael Cassel sued attorneys who represented him during a mediation settlement for malpractice, breach of fiduciary duty, fraud and breach of contract. Cassel alleged that his attorneys induced him to settle for less than the case was worth and less than he said he was willing to accept. The attorneys moved to exclude all evidence of private attorney-client communications made in preparation for and during the mediation, including communications related to mediation strategies and any attempts to persuade Cassel to reach a settlement. A trial court granted the attorneys’ motion.
An appellate court reversed the ruling of the trial court reasoning that California’s mediation confidentiality statutes were not intended to protect attorneys against malpractice claims, but instead intended to protect mediation participants. The appellate court stated,
The mediation confidentiality statutes do not extend to communications between a mediation participant and his or her own attorneys outside the presence of other participants in the mediation.
The appellate majority also ruled that a malpractice suit removed the attorney-client privilege and prevented attorneys from using the confidentiality statutes as a shield against their former clients. Cassel’s former attorneys then appealed to the California Supreme Court.
The Supreme Court first turned to the plain language of Section 1119 of the California Evidence Code. The Court noted that in drafting the provision the legislature “broadly provided for the confidentiality of things spoken or written in connection with a mediation proceeding” in order to “encourage the candor necessary” for successful mediation settlements. The Court also relied on an earlier ruling that the plain language of Section 1119 extends protection to all communications “for the purpose of” or “pursuant to” a mediation, including private communications between a disputant and his or her counsel.
The Court next clarified that while the term “participant” was not defined in the statute, there was no reason to define the term so narrowly as to include only parties to mediation and exclude their respective legal counsel as separate participants. The Supreme Court disagreed with the appellate court’s holding that a party to mediation and his or legal counsel constituted a single “participant.” According to the California Supreme Court, legal counsel must agree to waive confidentiality protections for communications made under Section 1122 of the California Evidence Code.
The Supreme Court also stated,
application of the mediation confidentiality statutes to legal malpractice actions does not implicate due process concerns so fundamental that they might warrant an exception on constitutional grounds.
According to the court,
We therefore conclude that the evidence the trial court ruled nondiscoverable and inadmissible by reason of the mediation confidentiality statutes was not, as a matter of law, excluded from coverage by those statutes on the mere ground that they were private attorney-client communications which occurred outside the presence or hearing of the mediator or any other mediation participant. Instead, such attorney-client communications, like any other communications, were confidential, and therefore were neither discoverable nor admissible — even for purposes of proving a claim of legal malpractice — insofar as they were “for the purpose of, in the course of, or pursuant to, a mediation . . . .
The California Supreme Court held Cassel’s private communications with his attorneys related to the mediation were confidential communications protected by California’s Evidence Code and could not be discovered during a legal malpractice lawsuit between the parties.
In his concurrence, Justice Chin wrote,
The court holds today that private communications between an attorney and a client related to mediation remain confidential even in a lawsuit between the two. This holding will effectively shield an attorney’s actions during mediation, including advising the client, from a malpractice action even if those actions are incompetent or even deceptive. Attorneys participating in mediation will not be held accountable for any incompetent or fraudulent actions during that mediation unless the actions are so extreme as to engender a criminal prosecution against the attorney. (See maj. opn., ante, at p. 28, fn. 11.) This is a high price to pay to preserve total confidentiality in the mediation process.
He went on to state the outcome was a matter for the California Legislature, not the courts, to address,
Accordingly, I agree with the majority that we have to give effect to the literal statutory language. 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 attorney’s statements during mediation may never be disclosed. For example, it may be appropriate to provide that communications during mediation may be used in a malpractice action between an attorney and a client to the extent they are relevant to that action, but they may not be used by anyone for any other purpose. Such a provision might sufficiently protect other participants in the mediation and also make attorneys accountable for their actions. But this court cannot so hold in the guise of interpreting statutes that contain no such provision. As the majority notes, the Legislature remains free to reconsider this question. It may well wish to do so.
While in law school, Victoria was a Graduate Research Assistant for Professor John S. Dzienkowski, from The University of Texas at Austin. She was responsible for selecting cases for inclusion in the textbook International Petroleum Transactions. Victoria was particularly involved in researching the areas of international business litigation and arbitration. She also performed extensive research on political and economic risks within the context of international licensing agreements.
Having lived and studied in Mexico, Canada, and the U.S., Victoria brings a unique perspective to Karl Bayer. Right after high school, Victoria moved to Canada to study English and French. Born and raised in Mexico, she is a native Spanish speaker and a graduate of the Monterrey Institute of Technology (Instituto Tecnologico y the Estudios Superiores de Monterrey), where she concentrated in Physics and Mathematics.
- American Bar Association, Young Lawyers
- American Intellectual Property Law Association (AIPLA)
- Association of International Petroleum Negotiators (AIPN)
- National Hispanic Bar Association (NHBA)
- State Bar of Texas, Intellectual Property
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