Settlement Is Always Better (5/12/08)
Phyllis Pollack

       About a year ago, I was requested to mediate a case that was on appeal. The parties were a real estate agent (“agent”) and the real estate company (“company”) for whom the agent worked. The company had made cash advances to the agent for which the agent had signed promissory notes. When the agent terminated her employment with the company, she still owed the money.
 

      Pursuant to the terms of the agreement, the company sent the claim for collection. When that proved unsuccessful, the company filed a petition for binding arbitration.
 

      During the arbitration proceedings, the agent contended, among other things, by way of a counter-claim that she had been denied one or more commissions lawfully due to her, had been sexually harassed and that during the collection process, the company had violated federal law by reporting to the credit agencies that the debt was valid rather than disputed.
     

        The arbitrator found for the company in all respects. The company then had the petition confirmed by the trial court. The amount of the award against the agent was approximately $80,000.
 

      The agent filed for an appeal from the judgment confirming the arbitration award against her.
     

       At this point, the parties agreed to mediate the matter, and the appellate court sent the matter to me for mediation.
 

      The mediation date was set; the parties submitted their briefs which I reviewed. I also spoke with counsel to learn more about the matter.
     

       On the morning of the mediation, (approximately two hours prior to its start), I received an e-mail from the office of the attorney for the agent; the agent could not make it as she was sick. she had been to a doctor and was under doctor’s “orders” not to do anything stressful for a week or more.
     

      Needless to say, subsequent attempts to reschedule this mediation were futile. Reading between the lines, I gathered that the agent did not really want to attend the mediation and confront the issues. Evidently (and as I was told) she had done this with other hearings in this matter; she was  stalling and delaying to avoid “dealing” with things.
 

      So. . .the appeal proceeded along. I recently received a copy of the unpublished appellate decision. The agent lost. The appellate court confirmed the arbitration award, finding no error.
     

      To stay the enforcement of this judgment in California, the agent had to post a bond of one-and- a half times the judgment or, approximately $120,000.
 

      As a result of the appellate decision, the agent now faces an adverse judgment of approximately $80,000 plus approximately $12,000 in accrued post-judgment interest (at 10% per year) plus the costs of the appeal and the attorneys’ fees of not only her own attorney but those of the company’s as well since it was the prevailing party. And to collect (once the matter is remitted to the trial court), the company simply has to file a motion in the trial court to be paid from the appeal bond.
 

      Why do I entitle this blog “Settlement Is Always Better?” Because, if the agent had been willing to attend mediation and confront the issues, in all likelihood, the company would have been flexible in the amount it would have accepted in settlement and in the payment terms. It probably would have agreed to accept less than the approximately $80,000 due and to allow the agent to pay it over a period of time. In short, the agent could have resolved this matter for a lot less money, in a lot less time and with a lot less anxiety, heartache and angst. (She, also would not have an adverse judgment appearing on her credit report).
 

      While we all have demons that we do not like to face and at times, avoid facing, in the long run, it is better and often cheaper to face them sooner rather than later. It is usually less costly and more satisfying to participate in the resolution of our own disputes rather than to avoid and delay, thereby allowing strangers (here, an appellate court) to make the decision for us.
     

       . . . Just something to think about.  

What UK Mediators Charge (5/12/08)
Geoff Sharp

In a kiss and tell article in the latest issue of The Mediator Magazine all is revealed about UK mediators' charge out rates in The Price is Wrong

"... Setting charge-out rates for mediators is a complicated and sensitive issue. In the UK the market is so oversupplied that if the number of commercial cases available were distributed evenly among accredited mediators, no mediator would be handling more than one a year. Under such market conditions, pricing is emotive, and competition sharp....

The results, with a few exceptions, demonstrate just how insecure the profession is at present. The underlying sentiment behind offering reduced rates for ‘convincing sob stories’, not charging for hours over the quoted-for eight or 10-hour thresholds, and not billing for too much preparation time is that mediators should be grateful for the work at any price. Among those mediators who did not want their rates published, a common sentiment was that clients immediately identify them as too expensive. Others still don’t have quoted rates and pitch for each job on the basis of what they think might get them the work...

Until the market can identify with certainty who the top mediators are and those mediators limit themselves to the top cases and charge properly for them, mediation is doomed to a future of weakness and desperation" [read more]

Idaho Enacts Uniform Mediation Act (5/07/08)
Keith Seat

Idaho has enacted the Uniform Mediation Act (UMA), effective July 1, 2008, in order to establish confidentiality for mediation communications, with specified exceptions. The legislation is intended to encourage greater use of non-judicial mediation by providing confidentiality protections that are uniform with the recent rules adopted by the Idaho Supreme Court for court-annexed mediation. The Idaho legislation also incorporates the United Nations Model Law on International Commercial Conciliation, which is a supplement to the UMA for international commercial mediations, unless the parties agree otherwise. The UMA has now been adopted in the District of Columbia and ten states: Idaho, Illinois, Iowa, Nebraska, New Jersey, Ohio, South Dakota, Utah, Vermont and Washington state.

Courtadr.com (March 12, 2008); Idaho S.B. 1261

Tennessee Judges Training in Mediation (5/07/08)
Keith Seat

Reflecting the growing importance of mediation and the pressure on court systems, 29 Tennessee judges, including four Supreme Court justices, are attending a five-day mediation training. State court figures indicate that 1,500 cases were mediated in the first quarter of the year.

The Tennessean (April 15, 2008)

Litigation Is Not The Answer (5/05/08)
Phyllis Pollack

       More and more parties are using mediation (which is nothing more than a negotiated resolution ) to resolve their lawsuits.  Perhaps, the following explains why.
     

        In late April 2008, the U.S. Chamber Institute for Legal Reform published its Lawsuit Climate – 2008 in which it ranks the states’ liability systems. The survey conducted by Harris Interactive, Inc. polled 957 in-house general counsel, senior litigators and other senior attorneys “who are knowledgeable about litigation matters at companies with annual revenues of at least $100 million.” (Id.) The polling occurred by telephone between December 18, 2007 and March 19, 2008, with each conversation lasting about 23 minutes on average.
 

      As I live in Los Angeles County, California, the first thing I looked for was California’s ranking. It is ranked 44 out of 50. (It seems that in 2007, it ranked 45 and in 2006, it ranked 44). The five best states, respectively are: Delaware (#1); Nebraska (#2); Maine (#3); Indiana (#4); and Utah (#5). The five states below California (or worse than California) are: (Illinois (#46); Alabama (#47); Mississippi (#48); Louisiana (#49); and West Virginia (#50).
 

      In looking through this study, I discovered another statistic: the worst jurisdiction (i.e. specific city, or county courts) is Los Angeles County: 14% of the respondents thought this. Chicago (Cook County), Illinois came in second worst: 11% of the respondents thought this.
   

          As this statistic took me aback, I continued reading to find out why corporate attorneys thought Los Angeles County was so bad. The top 12 issues (with the percentage of respondents who cited the reason) broke down as follows:
     

      1. biased judgment – 20%;
      2. corrupt/unfair system – 5%;   
      3. unfair jury/judges – 5%;
      4. have read/seen a report on a case – 5%;
      5. unpredictable jury/judges - 4%;
      6. personal experience – 4%;
      7. incompetent jury/judges – 4%;
      8. overburdened with cases/too many cases – 4%;
      9. not enough knowledge/experience about other states – 4%;
     10. high jury awards – 3%;
     11. too liberal – 3%; and
     12. slow process – 3%.

       When the respondents were asked what should be the most important issues for state policy makers, the top five issues mentioned were: speeding up the trial process – 12%; reform of punitive damages – 10%; eliminate unnecessary lawsuits – 9%; tort reform issues in general 8% and high litigation costs – 5%.
   

         Indeed, in a separate study published by Public Opinion Strategies in April 2008, 88% of the respondents (executives at California businesses) stated that the number of frivolous lawsuits is a “serious problem,” while 45% believed frivolous lawsuits to be a “very serious problem.” Sixty-two percent believe that the number of frivolous lawsuits has increased in California in the last 3 – 5 years. Moreover, 50% of the respondents stated that they had made a business decision primarily to avoid a potential lawsuit. Ninety percent of the respondents stated that a threat of a lawsuit is a factor in making business decisions.
    

       While these two surveys are from the perspective of defendants and thus reflect a certain bias, their results still provide food for thought. Without doubt, the results are based on perceptions of either corporate attorneys (Lawsuit Climate - 2008) or business executives (Public Opinion Strategies). But, perceptions are “reality” and to these two sets of respondents, the litigation system in many states is not fair, not predictable, is over-burdened and is presided over by inexperienced judicial officers.
           

       . . . Which brings me back to mediation and the negotiated resolution of a lawsuit. The issues raised by the respondents provide all the more reason to resolve disputes through mediation. First and foremost, the parties, themselves, control not only the results, but the process. They need not worry about biased judgments, corrupt/unfair systems, unfair juries/judges, unpredictable juries/judges, incompetent judges and juries, overburdened judges, high jury awards, or a slow process.
 

           By agreeing to mediate their dispute, the parties are in total control: they select a neutral, the pace or timing of the process, the length of the process, the simplicity or complexity of the process and most importantly, the results. The parties control their own destiny – the outcome to their dispute. They can resolve it in any way that they want to do so, and not in a way dictated by some stranger – a judge or jury.
  

          So. . .the next time someone tells you they want to sue . . .think about this study. . .and the beauty of mediation.
       

           . . . Just something to think about.
 
 

When families lose a loved one, do they want the cash or the courthouse? (5/05/08)
Geoff Sharp

It's the first time I've become emotional reading a research paper, but an article by USC academic Gillian Hadfield got to me. Sad movies sometimes do that too, but I'm usually safe around law school publications.

Maybe it was because of a mediation, only just completed, involving a young and troubled life taken. It's still raw and I just wasn't qualified to be the straw those barely functioning parents grabbed hold of.

So, don't say you haven't been warned - choose a rainy Sunday evening to settle in and read Gillian's 65 page Framing the Choice between Cash and Courthouse: Experiences with the 9/11 Victim Compensation Fund.

Sure, it contains the usual research speak, you know - 'groups, sub-groups, narrative evidence' and stuff but there's a thousand human stories sitting behind all of that and, if you have been mediating for a while, you'll have come across them before - good people faced with making a money claim for an uncompensatable death and an uncompensatable emptiness.

But before you curl up in your favourite chair, watch this video (click anywhere inside the box);

In it the Special Master of the September 11th Victim Compensation Fund, Ken Feinberg, explains how he saw his task - that's important because I want you to reflect on how judges and lawyers see these things - a question of families 'comparing values, payout times and probabilities; choosing between the sure thing of a Federal fund and the lottery ticket of a day in court'.

Or is it something else?

Yeah, sure, the video and paper are full of stats - an incredible 98% of eligible claimants applying, only a handful suing - and that the Fund calculates the money by assessing;

economic loss (what would the victim have earned?)
+ non economic loss (how much suffering?)
- any insurance etc
= average death payout of $1.8m

And when an abstract of Hadfield's paper was circulated last week on an ADR list serve, one mediator's response was;

"... in a quick read, it seems Prof Hadfield is making a case for the filing of lawsuits as being a democratic and patriotic act, while mediation being somehow almost dishonorable, or robbing "the people" of an opportunity to engage in a civil and civic discourse. Not exactly what they taught me at Pepperdine...."

But I don't think that's really fair, the thesis is more complex than that... the research question was simple "How did people who had suffered an injury or lost a family member think about the choice between collecting money from the VCF and pursuing civil litigation?" and what Prof Hadfield found is that;

"The decision to go with the Fund was clearly for many a negative one, driven by a capitulation to reality and brute facts. For some, particularly women with children, the poor and the injured,reality was dominated by immediate financial need... it involved not an easy trade off between a guaranteed dollar payment and a gamble on a ‘pot of gold,’ but a deeply troubling trade off between money and a host of non‐monetary values that respondents thought they might obtain from litigation. These values included information from otherwise inaccessible sources the decision makers who determined airline and World Trade Center fire safety procedures, for example), accountability in the sense of public judgment about whether those on whom victims depended for their safety did their jobs, and responsive policy change—making sure that lessons were learned and heeded in the future...".

See what you think of it all - then come back here and post a comment - I know that the paper will help me respond more intelligently to parties when they anguish over 'valuing' a life, a hurt, a disappointment, a vacuum, an injury...

North Carolina Court Requires Disclosure of Insurance Coverage Remaining Prior to Mediation (4/23/08)
Keith Seat

The North Carolina Business Court in Harco Harco National Ins. Co. v. Grant Thornton LLP, required the defendant to disclose the amount of insurance remaining under its liability policy immediately prior to mediation, even though the court did not require disclosure of all insurance information sought. The court relied on the requirement to mediate in “good faith” and held that refusing information about available insurance coverage was not good faith. The court noted that the North Carolina Supreme Court’s governing interpretation of the discovery rule, which requires disclosure of the “true facts” of insurance coverage, is broader than the analogous federal rule.

Harco National Ins. Co. v. Grant Thornton LLP, 2008 NCBC 5 (N.C. Bus. Ct. March 4, 2008)

Lawsuit Filed to Spur More Insurance Mediation (4/23/08)
Keith Seat

Litigation has been filed claiming that property insurers deliberately failed to inform Florida policyholders that they can seek mediation for hurricane claims, allegedly saving the insurance industry $400 million in mediation and extra claims settlement costs. The case was brought on behalf of a homeowner against the Florida Office of Insurance Regulation and the Department of Financial Services, alleging that the agencies allowed insurers to ignore their obligations to offer mediation. While class action certification is not being sought, plaintiff’s counsel hopes the state agencies will become more diligent in enforcing the mediation notification requirement. The agencies dispute the claims, stating that they do focus on getting homeowners with insurance disputes into mediation.

Orlando Sentinel (April 3, 2008)

U.K. Group Urges Mediation to Remedy Design Theft (4/23/08)
Keith Seat

The leading U.K. trade organization opposing design theft has launched a national campaign to encourage mediation of intellectual property disputes. The organization, known as ACID (Anti Copying in Design), launched its pro-mediation campaign with the slogan “Mediate to Resolve” on the group’s tenth anniversary in April. However, ACID has long been involved in resolving disputes, with a mediation panel chaired by a former High Court Judge and a countrywide network of mediators. ACID has handled 2,000 mediations and states that only a handful have gone on to court, as most result in royalty or licensing agreements. ACID’s mediation campaign is supported by the Minister for Intellectual Property.

ITNews(Rome) (April 7, 2008)

The Case for Settlement Counsel: Negotiation is Not a Competitive Sport (4/21/08)
Victoria Pynchon

(right, the must-read Google Story) 

If the point of litigation is winning what is the point of settlement negotiations?  Winning, right? 

Wrong.  The point of settlement negotiations is to create durable agreements that sufficiently serve the parties' interests so that they will either stop bothering one another -- for which the LawGod created iron-clad releases -- or flourish in their mutual business venture.

I mention The Google Story in this post because it contains a small narrative about a  business deal that killed its host.  

In Google years, this story arises at the beginning of time -- the year 2000.  Back then, Google was renting space by the square foot in the air-conditioned warehouses that store online company "servers." Google's stripped-down, high-powered hardware was so small (took up so few square feet) and so powerful (used so much electricity) that its lessor's electric bills drove the warehouse out of business.  The narrative doesn't suggest that Google intentionally negotiated this deal to "get the better of" its bargaining partner.  Nevertheless, a truly competitive negotiator, on hearing this story, would likely experience a little adrenalin rush -- the agreement being quite literally a "killer deal."  

I tell this story because I want to begin a series of posts about competitive and collaborative negotiation in the context of "bet the company" commercial litigation.  At the same time, I want to suggest the need for specially designated 'settlement' counsel to work alongside of (but not with) the litigation team.  The Google story will have relevance to those issues as we proceed.

If I can free up a little of the time of my friend and colleague, AAA arbitrator and Judicate West mediator Jay McCauley to help me out, you'll be hearing from him on these topics during the next several weeks as well.

For now, I'm leaving you with this 2004 article, Negotiation is not a competitive sport by Steven P. Cohen, President of The Negotiation Skills Company in Pride's Crossing, Massachusetts, together with his concluding remark.  

Competitive negotiation yields winners and losers and reduces the likelihood that losing parties will be fully committed to the resulting agreement. If the agreement falls apart, the negotiation must be deemed a failure. If parties are compelled to fulfill their part of the agreement but end up with a bad taste in their mouths, they will approach future negotiations with the winner with reluctance, paranoia, and distrust. The long-term consequences of competitive negotiation are unfavorable, yielding reduced enthusiasm and commitment as well as damaged relationships. Negotiation is about how the parties are going to bring about added value from having worked together. It is not a competitive sport.

See also Hard Bargaining:  What's Machiavelli Got to Do with It at the IP ADR Blog here.

Michael Leathes of the International Mediation Institute #2 (4/21/08)
Geoff Sharp

Michael Leathes spoke in Wellington today (see my Friday post).

Here is his PowerPoint presentation that sets out the main points of IMI's plans for a global mediator certification;


IMI-April 2008 - Get more documents

And here is an actual completed feedback form for a UK mediator that goes to make up a mediator's 'feedback digest' - an integral part of the certification process;


IMI Feedback Form - Get more documents

What It Takes To Be A Great Mediation Lawyer (4/21/08)
Geoff Sharp

One of the worst looks for a mediation counsel is when the capacity for independent thought is lost. I see it only occasionally.

This could be because the client is a bully or counsel is working from a position of greed or lack of experience.

My own view is that when it does happen, it's usually because the lawyer is lazy and has failed to manage the client's expectations as the case has matured from filing to mediation.

Occasionally, it's because they don't want to lose the business, but I think that's the exception.

Anyway, doesn't really matter why, it always ends badly.

Much of personal injury lawyer John Day's advice in his 12 part think piece on What it takes to be a great trial lawyer is relevant here, especially these sections;

1. Great trial lawyers don’t cheat
2. They have the ability and willingness to undertake (and share with the client) a cost-benefit analysis throughout the litigation
3. They can pull the trigger
4. They are willing to be themselves
5. They have the courage to tell the client the truth

See also Greedy lawyers blamed for lack of mediation

Co-Mediation by Doctors and Lawyers Begun for Med Mal Mediations (4/07/08)
Keith Seat

A pilot project to pair up doctors and lawyers as co-mediators in an effort to resolve medical malpractice claims has begun at a Philadelphia suburban hospital. The productivity and healing potential of mediation is being emphasized over the possible monetary savings, as the program tries to reach better outcomes for the parties. Mediation training has begun for 30 doctors and lawyers to become mediators, which was eye-opening for many doctors who realized for the first time how hard it can be to deal productively with strong emotion and find common ground. Many of the lawyers had previous experience with mediation and are expected to take the lead initially in mediations.

Philadelphia Inquirer (March 4, 2008)

Mediation Central to Civil Justice Reforms in Victoria, Australia (4/07/08)
Keith Seat

Australia’s longest-serving attorney general is urging that mediation “take center stage” in the reforms of Victoria’s legal system which are under way. The Victorian Law Reform Commission proposed introducing pre-action protocols, which may include mandatory mediation, in recommendations presented to the attorney general.

The Australian (March 7, 2008)

Playing Nice (4/07/08)
Phyllis Pollack

        Most of the cases that I mediate are in litigation. They are lawsuits in which each party has hired an attorney to represent him/her zealously, if not, aggressively. Many of these attorneys approach litigation as they would war: take no prisoners, scorching the earth as they “fight” their way to victory!
 

      However, a recent Harvard study reveals that these attorneys and the parties they represent may gain a lot more by playing nice. That is, “nice guys do finish first.” (Id.)
 

      The Harvard study, published in the March 20, 2008 issue of Nature (Volume 452, No. 7185), involved a 100 Boston-area college students playing “a punishment-heavy version of the classic one-on-one brinksmanship game of prisoner’s dilemma.” (Id.):
   

         “Common game theory has held that punishment makes two equals cooperate. But when people compete in repeated games, punishment fails to deliver. . . .” (Id.)

 

       The study found that those who used punishment were the losers. “Those who escalate[d] the conflict very often wound up doomed.” (Id.)
     

        In contrast, those who turned the other cheek and continued to cooperate with a nasty opponent received more rewards.
 

      When considered in the context of a mediation, the results of this study make sense. The purpose of mediation is to reach a resolution that meets the needs and interests of all parties concerned. Mediators (including me) often take an integrative bargaining approach (i.e., win-win) in mediation rather than a distributive bargaining approach (i.e., win-lose). If the parties accept the former approach, they often find that the deal struck in settlement is more satisfying as it meets more of their needs and interests than a deal stuck using distributive bargaining (or a zero-sum game approach). In essence, by working with the opponent (rather than against the opponent) in a cooperative manner, both parties gain more.
     

       In my day-to-day life as a mediator, I have seen this cooperative approach work, over and over again, resulting in settlements that meet the parties’ needs and interests. I am now happy to learn that this everyday experience has been confirmed by academia and scientific study.
   

         . . . Just something to think about. 

Mediation Confidentiality in New York? Not According to Hauzinger Decision
This decision concerns the unsuccessful attempt of a mediator to quash the subpoena issued by defendant for the mediator's appearance and papers at a deposition in this divorce action. Should this decision stand, mediators in New York and elsewhere plainly must promote clear and binding confidentiality legislation. The New York court ignores the parties' contractual agreement for confidentiality in favor of unbridled litigation. This decision highlights how private mediation has now come to be viewed, at least in New York, as a cog in the judicial machinery. The failure to recognize the value of mediation and critical importance of protecting parties' and mediators' expectations of confidentiality is troubling at best. This case should be a wake up call for mediators to defend the critical qualities, including effective confidentiality agreements, necessary for successful mediation.   7 Comments

Mediation Confidentiality and Enforceable Settlements: Deal or No Deal?
Karin S. Hobbs
How do attorneys ensure confidentiality of the mediation process, protect their clients from motions to enforce and enter into binding deals in mediation. This article discusses the critical importance of mediation confidentiality, the application of the Uniform Mediation Act, and offers practical suggestions for attorneys to use to avoid court action regarding mediated settlement agreements.

Some New Thoughts about Mediation Confidentiality
Jeff Kichaven
Several of my recent columns have criticized the "absolute confidentiality" rules of the California Evidence Code which govern mediation in this state. In this column, I intend to move the discussion forward by describing some thoughts and ideas regarding how we might improve on the current rules.   1 Comment

Are You Settled? Maybe Not . . .
Michael Young
What the “Tingler” and a Contaminated Property Can Teach You About the Enforceability of Mediated Settlement Agreements in California.

Absolute Confidentiality—Is It Wise?
Jeff Kichaven
In California and elsewhere, it is said that confidentiality is key to the success of the mediation process. But is it really? Does it instead protect the parties from claims in tort? It is important to review state legislation and case law to determine what protections are available to the mediator and those involved in mediation, and then assess whether these are counterproductive.   1 Comment

Better Practice Tip: Recognized Exceptions to Mediation Confidentiality and Remedies That Every Litigator Should Know
Max Factor III & Alice M. Graham What about real problems with mediation cases. You observe that the mediator simply favors one side. Or, a party appears medicated, unable to appreciate the meaning of the settlement. Can anything be done? In many cases, the answer is yes.   1 Comment

Rojas v. Superior Court: The Battle of Two Opposing Public Policies
Eric van Ginkel
The Rojas case represents the dilemma that arises when two public policies collide. On the one hand is the established, strong public policy in the United States that requires the parties to disclose all relevant evidence. On the other hand is the newer but equally strong public policy supporting the confidentiality of conciliation so that the process can be as safe as possible.

They Say It’s About Dollars, But It’s Often About Emotion: How to Use Mediation To Restore Business Judgment To Business Disputes
Max Factor III Business executives are supposed to be creatures of logic, carefully weighing costs and benefits. Yet some mediations fail even when there are several sensible alternatives, any of which would offer the disputants as good or a better a result than each of them would expect from other likely outcomes of the dispute. Puzzling as their behavior may seem, business partners may sometimes reject settling a dispute, preferring instead to have a litigated result imposed upon them by a third party such as a Judge, Jury or Arbitrator. There are four common reasons for this seemingly illogical behavior. Each reason relates to very recognizable human emotions and perceptions.   3 Comments

The Lessons of Rojas: Let's Play Ball
Elizabeth Moreno
Legal commentators are claiming that the new California Supreme Court opinion of Rojas v. Superior Court (July 13, 2004), where the court held that everything disclosed in mediation has a veil of ‘absolute confidentiality’, will cause litigants to disclose their weaknesses then hide behind this veil of ‘absolute confidentiality’ during the post-mediation discovery process and at trial. The legal commentators are claiming that the Rojas decision will kill mediation. These commentators’ theories are out of the ball park.   3 Comments

Rojas v The Supreme Court Of California
The Supreme Court of California
The full opinion of this important case that deals with the question of confidentiality in mediation is available online. Citing the importance of preserving the mediation privilege,the Supreme Court of California reversed the appeal court's ruling, and held that photographs and witness statements prepared for mediation are privileged.