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Update on Mediation Confidentiality

by Phyllis Pollack
August 2015

PGP Mediation Blog by Phyllis G. Pollack

Phyllis  Pollack

In previous blogs, I have discussed the hullaballoo surrounding the introduction of AB 2025 into the California Legislature. As originally drafted and introduced into the California State Assembly, it provided that mediation confidentiality would not preclude the introduction of “… communications between a client and his or her attorney during mediation… 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 client’s allegations against the attorney.” In short, mediation confidentiality would not provide a shield to an attorney in a legal malpractice action, State Bar proceeding or disciplinary action where his alleged misfeasance or malfeasance arose during mediation.

There was much opposition to this bill, to the point that it was amended to provide that the whole matter would be referred to the California Law Revision Commission for study, review, and recommendations. Consequently, in May 2012, The California Law Review Commission began its study on the “Relationship between Mediation Confidentiality and Attorney Malpractice and Other Misconduct- Study K-402” (http://www.clrc.ca.gov/K402.html ).

As explained by the Commission:

in conducting this study, the Commission will consider the following matters, among others:

(1) Evidence Code Sections 703.5, 958, and 1119 and predecessor provisions.

(2) California court rulings, including, but not limited to, Cassel v. Superior Court, 51 Cal. 4th 113, 244 P.3d 1080, 119 Cal. Rptr. 3d 437 (2011), Porter v. Wyner, 107 Cal. Rptr. 3d 653 (2010) (formerly published at 183 Cal. App. 4th 949), and Wimsatt v. Superior Court, 152 Cal. App. 4th 137, 61 Cal. Rptr. 3d 200 (2007).

(3) The availability and propriety of contractual waivers.

(4) The law in other jurisdictions, including the Uniform Mediation Act, as it has been adopted in other states, other statutory acts, scholarly commentary, judicial decisions, and any data regarding the impact of differing confidentiality rules on the use of mediation.

For the past three years, the Commission has reviewed numerous and quite detailed Staff Memoranda submitted by its Staff Counsel looking at all aspects of this topic. (See: http://www.clrc.ca.gov/K402.html#Staff Memoranda for a detailed list of same.)

In one of its last memoranda – Staff Memorandum 2015-33, Staff Counsel listed possible options for the Commission to study and possibly adopt. (http://www.clrc.ca.gov/pub/2015/MM15-33.pdf )

At its August 7, 2015 meeting, the Commission voted to further study Options A-3 and A-6 listed in this Staff Memorandum. (See, pages T4 and T8 of same.). The actual Draft minutes of the meeting are pasted at the end of this blog.

To summarize, these options ( A-3 and A-6) essentially would adopt a provision similar to Section 6 of the Uniform Mediation Act that would create “… an exception for all mediation confidential communications, whether or not the misconduct that they pertain to is within the mediation or outside the mediation.” (E mail of Ron Kelley- August 13, 2015; and “Between Scylla and Charybids: the mediation privilege and legal malpractice claims ” by Wendel Rosen Black and Dean, LLP, Lexology– August 17, 2015  (“Lexology Article”) ).

Further, this exception would apply to both the lawyers representing the parties in the mediation as well as the mediators who are attorneys. Both could be subject to claims of discipline by the State Bar of California as well as be subject to civil litigation claims of legal malpractice or professional misconduct in their role as an attorney representing a party or as the mediator, respectively. (Id.)

The Commission also requested the Staff Counsel to ““… research and draft an in camera proceeding to judge the type of misconduct’ in which the judge would ‘have discretion to decline the in camera proceeding””. The Commission left open for future vote the question whether such an in camera proceeding would be mandatory in any proceeding alleging misconduct. (E mail of Ron Kelly and Lexology Article.)

The Commission also voted to create an exception to the California Evidence Code with respect to mediation confidentiality to allow evidence of the alleged misconduct or malpractice to be admissible both to prove and to defend against a claim of alleged malpractice or misconduct as Section 6 of the Uniform Mediation Act provides. (Id.)

At the same time, the Commission voted to reject any option that would provide for a “cooling off” period after a mediated settlement agreement is signed such as now occurs in certain types of employment cases and also rejected any option that would allow the mediated settlement agreement to be unwound due to attorney misconduct. (Id.)

As is evident, the notion of mediation confidentiality in California  may well be on the verge of changing drastically.  While there is still a very long way to go before the Commission adopts  one or more recommendations to be sent to the Legislature which then must enact  those recommendations, I wanted to bring this latest development to your attention, now. I urge you to weigh in on the topic by making your views known to the Commission.

The next meeting of the California Law Review Commission is October 8, 2015 in Davis, California. All comments to these proposal may be directed to Barbara Gaal, the Commission’s staff attorney in charge of this study at bgaal@clrc.ca.gov.

Minutes of Meeting on August 7, 2015 (Draft) (Pages 4-6)  (http://www.clrc.ca.gov/pub/2015/MM15-29.pdf )

General Concept

The Commission directed the staff to begin the process of preparing a draft of a tentative recommendation that would propose an exception to the mediation confidentiality statutes (Evid. Code §§ 1115-1128) to address “attorney malpractice and other misconduct.” (Commissioner King voted against this decision.)

Types of Misconduct to Cover

The proposed new exception should apply to alleged misconduct of an attorney or an attorney-mediator.

The proposed new exception should only apply to alleged misconduct in a professional capacity.

The proposed new exception should apply regardless of whether the alleged misconduct occurred during a mediation.

Types of Proceedings in Which the Exception Would Apply

The proposed new exception should apply in the following types of proceedings:

(1) A disciplinary proceeding against an attorney for alleged misconduct while acting as an attorney.

(2) A disciplinary proceeding against an attorney for alleged misconduct while acting as an attorney-mediator.

(3) A malpractice case against an attorney for conduct in the role of an attorney.

(4) A malpractice case against an attorney for conduct in the role of attorney-mediator. (Commissioner Miller-O’Brien abstained from this decision.)

Purpose for Invoking the Exception

The proposed new exception should apply evenhandedly, permitting use of mediation evidence to prove or disprove a claim.

In Camera Screening Process

The proposed new exception should utilize an in camera screening process. The Commission discussed but did not resolve whether an in camera hearing should be mandatory whenever a person invokes the exception. The Commission did not discuss or resolve any other details regarding the nature of the in camera screening process.

Limitation on Extent of Disclosure of Mediation Communications

The proposed new exception should only permit disclosure of mediation evidence that is relevant to the malpractice case or disciplinary proceeding in which it is sought or proffered.

Code Placement

The proposed new exception should be placed in the Evidence Code. (Commissioner Lee abstained from this decision.)

Further Details

The Commission discussed but did not resolve whether the proposed new exception should apply while the underlying mediated dispute is still pending. The staff mentioned the issue, but the Commission did not discuss or resolve whether there should be any special rule relating to mediator testimony.

The Commission will consider those and other details at a future meeting. 

Draft Minutes • August 7, 2015

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Biography


Phyllis Pollack with PGP Mediation uses a facilitative, interest-based approach. Her preferred mediation style is facilitative in the belief that the best and most durable resolutions are those achieved by the parties themselves. The parties generally know the business issues and priorities, personalities and obstacles to a successful resolution as well as their own needs better than any mediator or arbitrator. She does not impose her views or make decisions for the parties. Rather, Phyllis assists the parties in creating options that meet the needs and desires of both sides.  When appropriate, visual aids are used in preparing discussions and illustrating possible solutions. On the other hand, she is not averse to being proactive and offering a generous dose of reality, particularly when the process may have stalled due to unrealistic expectations of attorney or client, a failure to focus on needs rather than demands, or when one or more parties need to be reminded of the potential consequences of their failure to reach an agreement.



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