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Oregon Supreme Court on Mediation Confidentiality

by F. Peter Phillips
January 2016

Business Conflict Blog by Peter Phillips

F. Peter  Phillips

On December 10, 2015, the Oregon Supreme Court released an opinion in a case that required it, for the first time, to consider whether a client may assert a claim for legal malpractice relying upon factual allegations that reveal the substance of communications made in the course of, or immediately after, a mediation process.  Though relying upon Oregon law, the analysis is extraordinarily reasoned and yields an outcome that is more nuanced and (perhaps) more useful generally that the series of opinions that the California courts have offered on the subject.

Alfieri v. Solomon arises from an underlying claim that Mr. Alfieri brought against his former employer, alleging discrimination and retaliation.  His lawyer, Mr. Solomon, filed administrative and civil claims on Mr. Alfieri’s behalf and represented him in mediation in respect of those claims.  (It is unclear whether the mediation was court-referred or by voluntary stipulation.)  The mediation culminated in a recommendation by the mediator which the parties eventually accepted, and the discrimination claims were settled by written agreement.

Mr. Alfieri later concluded that he had received bad legal advice, was poorly served by Mr. Solomon, could have obtained more value for his claims had he gone to trial, and should never have settled his employment claims on the terms that Mr. Solomon and the mediator had recommended.  He filed an action against Mr. Solomon alleging (among other things) his lawyer’s lackluster performance during the mediation sessions; the unacceptable nature of the mediator’s proposed terms of settlement during the mediation; and his lawyer’s inaccurate advice to him during and after the mediation session.  Mr. Solomon successfully moved to strike these allegations as violative of the Oregon mediation confidentiality laws.  Shorn of those factual allegations, the complaint was dismissed for failure to state a claim upon which relief could be granted.  After intermediate appellate review, the Supreme Court accepted Mr. Alfieri’s appeal.

The parties conceded that, in the absence of any exception, “mediation communications” that are confidential and inadmissible by operation of law or agreement cannot form the basis of a legal claim.  They disagreed, however, on what statements between a client and a lawyer, and what statements by a lawyer to someone else (including to a mediator), constitute “mediation communications.”  The Court made three holdings based on its analysis of the controlling legislation:

 1.  “Mediation” means that part of a settlement process in which a mediator is a participant, and does not include interactions among parties and their counsel “that occur outside the mediator’s presence and without the mediator’s direct involvement.”

2.  A “mediation communication” is one that occurs either during an actual mediation in which a mediator is present and directly involved, or else “outside such proceedings but relat[ing] to the substance of the dispute and its resolution process.”  In no instance, however, can a communication that occurs after a mediation is finished, and after a settlement agreement is signed, be a “mediation communication” within the meaning of the confidentiality statute.

3.  A “mediation communication” must be one made between certain identified persons — the mediator, the parties, their agent, or anyone else present — and not one made to a person other than those identified in the statute.  Nor can a communication between a client and his attorney, made before or after a mediation proceeding, be a “mediation communication.”

Applying these analytical principles to Mr. Alfieri’s allegations, the Court determined that the trial court correctly struck allegations containing what the mediator said to the parties, and what Mr. Alfieri’s lawyer said to the mediator or to the parties to the mediation during the mediation session.  However, the trial court erred in striking allegations pertaining to private conversations between Mr. Aflieri and his attorney, that occurred outside the mediation proceedings, and in some cases after the termination of the mediation process.  These are neither confidential nor inadmissible as constituting “mediation communications.”

Biography


F. Peter Phillips is a commercial arbitrator and mediator with substantial experience providing consultation on the management of business disputes to companies around the globe.

A cum laude graduate of Dartmouth College and a magna cum laude graduate of New York Law School, Mr. Phillips served for nearly ten years as Senior Vice President of the International Institute for Conflict Prevention and Resolution (CPR Institute). During that time, he earned a reputation as an author, teacher, industry liaison, and systems designer for the avoidance, management and resolution of complex and sophisticated business conflicts.

In 2008, Mr. Phillips formed Business Conflict Management LLC (BCM) in order to offer his direct services as a neutral and a consultant. Through BCM, Mr. Phillips also continues his career as a highly sought-after public speaker, facilitator and instructor.



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