Exception to Mediation Confidentiality: Moving Forward

by Phyllis Pollack
December 2016

PGP Mediation Blog by Phyllis G. Pollack

Phyllis  Pollack

On December 1, 2016, The California Law Revision Commission (“CLRC”) met once again to discuss its Study K-402-Relationship Between Mediation Confidentiality and Attorney Malpractice and Other Misconduct.   In each of its meetings in and after August 2016, the CLRC decided to create the exception and made other recommendations on this topic. At its last meeting in September 2016, it requested Barbara Gaal, Esq., its Chief Deputy Counsel, to present draft legislation for its review at its next meeting.

Memorandum 2016-58 presents a very tentative draft of the proposed draft legislation:

 Evid. Code § 1120.5 (added). Alleged misconduct of lawyer when representing client in mediation context

SEC. ___. Section 1120.5 is added to the Evidence Code, to read:

1120.5. (a) A communication or a writing that is made or

prepared for the purpose of, or in the course of, or pursuant to, a

mediation or a mediation consultation, is not made inadmissible, or

protected from disclosure, by provisions of this chapter if both of

the following requirements are satisfied:

(1) The evidence is relevant to prove or disprove an allegation

that a lawyer breached a professional requirement when

representing a client in the context of a mediation or a mediation

consultation.

(2) The evidence is sought or proffered in connection with, and

is used solely in resolving, one of the following:

(A) A complaint against the lawyer under the State Bar Act,

Chapter 4 (commencing with Section 6000) of the Business and

Professions Code, or a rule or regulation promulgated pursuant to

the State Bar Act.

(B) A cause of action for damages against the lawyer based

upon alleged malpractice.

(b) If a mediation communication or writing satisfies the

requirements of subdivision (a), only the portion of it necessary for

the application of subdivision (a) may be admitted or disclosed.

Admission or disclosure of evidence under subdivision (a) does not

render the evidence, or any other mediation communication or

writing, admissible or discoverable for any other purpose.

(c) In applying this section, a court may, but is not required to,

use a sealing order, a protective order, a redaction requirement, an

in camera hearing, or a similar judicial technique to prevent public

disclosure of mediation evidence, consistent with the requirements

of the First Amendment to the United States Constitution, Sections

2 and 3 of Article I of the California Constitution, Section 124 of the

Code of Civil Procedure, and other provisions of law.

(d) Nothing in this section is intended to affect the extent to

which a mediator is, or is not, immune from liability under existing

law. (Id. at 5-6.)

During its previous meetings, several issues had been raised but not resolved by the Commissioners. In connection with this draft, Ms. Gaal raised them.

The first issue was “… whether the proposed new exception should apply while the underlying mediated dispute is still pending.” (Id. at 8.)  After some lengthy discussion, the Commissioners voted NOT to include language that would provide for a stay of any potential malpractice lawsuit while the underlying action is pending. Thus, a mediation participant may institute an action for legal malpractice arising out of the mediation while the underlying matter is still pending.

The next issues were the evidentiary standards to be used both for the admissibility and discoverability of mediation evidence. Again, after discussing standards suggested in public comments and used in other states, the Commissioners decided on a “relevancy” standard:  that the evidence simply be “relevant to prove or disprove an allegation….” of alleged legal malpractice. (Id. at 10-17.)

The Commissioners further decided that the new exception would apply to State Bar Disciplinary proceedings. (Id. at 19.)

More importantly, they also decided that the exception would apply to claims of “legal malpractice“ using that term to denote not a specific cause of action but a broad range of causes of action that often are associated with “legal malpractice”. This discussion arose because as pointed out by Ms. Gaal –in Porter v Wyner (2010) 107 Ca. Rptr. 3d 653,658– Plaintiffs alleged not only “legal malpractice” but breach of fiduciary duty, constructive fraud, negligent misrepresentation, breach of fee agreement, rescission, unjust enrichment and liability for unpaid wages.   Rather than list specifically each type of claim encompassed by this new exception, the Commissioners decided to use the term “legal malpractice” as a category encompassing those claims (other than rescission) usually pled in such lawsuits.  (Id. at 19-24.)

The next issue was whether this exception “…should apply in a dispute relating to an attorney client fee agreement. “(Id. at 24.) The Commissioners determined that there was no need to raise or address this as a separate issue.

In previous meetings, mediators from both the community /DRPA funded mediation sector and the family law mediation sector urged the Commissioners that this proposed new exception should NOT apply to their respective fields. After some discussion, the Commissioners saw no need to carve these fields out from the proposed new exception. Thus, there will be no exceptions to the proposed new exception to mediation confidentiality. (Id. at 25-33.)

Another issue that had arisen was whether the other participants to the mediation should be given notice that a legal malpractice action has been filed resulting in possible disclosure of mediation communications.

The Commissioners decided that such notice should be given by adding the following section to proposed Evidence Code Section 1120.5:

       Upon filing a complaint or a cross-complaint that includes a

cause of action for damages against a lawyer based on alleged

malpractice in the context of a mediation or a mediation

consultation, the plaintiff or cross-complainant shall serve the

complaint or cross-complaint by mail, in compliance with Sections

1013 and 1013a of the Code of Civil Procedure, on all of the [known ?]

mediation participants whose addresses are reasonably

           ascertainable.   (Id. at 36.)

 The Commissioners also decided that it would not recommend that the Judicial Council do any type of evaluation regarding improper disclosure of mediation communications. (Id. at 33-36.) Further it would not recommend that the State Bar collect data on the number of disciplinary complaints arising out of mediation or mediation consultation, their outcome et cetera and provide such data to the Legislature. (Id. at 36-37.)

In preparation for this meeting, Staff Counsel also prepared Memorandum  2016-59 , Memorandum 2016-60 and First Supplement to Memorandum 2016-60.  Memorandum 2016-59 “… discusses the possibility of including additional reforms in the tentative recommendation, either as complements to the proposed new mediation confidentiality exception or as possible alternatives.” (Id. at 1.) These include “… disclosure requirements, revising the law on waiving mediation confidentiality or modifying it by agreements…safeguards against attorney misconduct in the mediation process…empirical study…. Ron Kelly’s “Alternative Compromise Package” … and prepare a report with no recommendation or a recommendation to leave the law as is “. (Id. at 5.)

Because the Commission ran out of time to discuss these Memoranda, it  tabled  this further discussion until its next meeting on February 2, 2016 in Sacramento.

I urge those who can attend to do so. Or, to submit a public comment to Barbara S. Gaal, Esq., Chief Deputy Counsel,  bgaal@clrc.ca.gov or Barbara S. Gaal, Esq., California Law Revision Commission, 4000 Middlefield Road, Suite D2, Palo Alto, Ca 94303

…. Just something to think about.

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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