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Articles by Scott > Exceptions to Confidentiality?

MEDIATION CONFIDENTIALITY MAY NO LONGER SHIELD ATTORNEY OR MEDIATOR MISCONDUCT

By Scott L. Gilmore – Attorney/Mediator

The broad reach of mediation confidentiality in California is based upon the California Evidence Code, which states that every communication, whether or not in writing, that was “made for the purpose of, in the course of, or pursuant to, a mediation” is confidential and is not admissible in any subsequent proceeding or subject to discovery.  (Evidence Code § 1119).  Mediation confidentiality also finds support in Evidence Code §§ 703.5 and 958.  Beginning in 2001 with the California Supreme Court decision in Foxgate Homeowners’ Association, Inc. v. Bromaela California, Inc. (2001) 26 Cal. 4th 1, the scope of mediation confidentiality as contained within the relevant statutes has been considered to be “clear and absolute” by the California Supreme Court.  That principle was further confirmed in the opinions in Rojas v. Superior Court (2004) 33 Cal. 4th 402, Fair v. Bakhtiari (2006) 40 Cal. 4th 189 and Simmons v. Ghaderi (2008) 44 Cal. 4th 570.  

Beginning in 2007 the scope of mediation confidentiality and its potential for the unintended protection of attorney misconduct became a focus of judicial review.  In Wimsatt v. Superior Court (2007) 152 Cal.App.4th 137, the Second Appellate District interpreted mediation confidentiality to be broad enough to potentially protect attorneys against claims for breach of fiduciary duty arising during the mediation process.  In Wimsatt, a party who had settled a personal injury lawsuit during mediation thereafter sued his attorney in the underlying action for breach of fiduciary duty.  The client claimed that his attorney had significantly lowered the settlement demand - - without the client’s permission - - which was then ultimately reduced (in the client’s mind) to the amount he was able to obtain by way of settlement at the mediation.  But the court in Wimsatt invited action by the legislature to reconsider "California's broad and expansive mediation confidentiality statutes and to craft ones that would permit countervailing public policies to be considered."

 In 2011 the California Supreme Court was faced with a similar question in Cassel v. Superior Court (2011) 51 Cal. 4th 113.  In Cassel the Court had to decide between continuing to hold that mediation confidentiality should be liberally construed despite the surrounding circumstances, or find that confidentiality should not be used to shield negligent attorneys from malpractice suits.  The Supreme Court decided that mediation confidentiality had few exceptions and the claim being made by the plaintiff in Cassel did not fall within one of those limited exceptions.  (The plaintiff in Cassel had claimed that during the course of the mediation his lawyer had forced him to settle the case through the use of bad advice, deception and coercion.)  Thus, the Court extended mediation confidentiality even to those discussions solely between counsel and his or her client during the course of the mediation.  However, as had been the case in Wimsatt, at least one of the justices invited legislative consideration of whether the intent of the mediation confidentiality statutes was to protect against attorney misconduct during the course of mediation.  In her reluctant concurrence, Justice Ming Chin stated 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 . . . As the majority notes, the Legislature remains free to reconsider this question.  It may well wish to do so.” 

In fact, in 2012 the California legislature began a consideration of this question.  By concurrent resolution the Legislature directed the California Law Revision Commission to analyze “the relationship under current law between mediation confidentiality and attorney malpractice and other misconduct, and the purposes for, and impact of, those laws on public protection, professional ethics, attorney discipline, client rights, the willingness of parties to participate in voluntary and mandatory mediation, as well as any other issues the commission deems relevant.”  The Commission has spent the last three years on that process.  The numerous (and ongoing) memos generated by staff, public comments submitted by many lawyers, mediators and scholars on the subject, and minutes of meetings considering the topic can be found at http://www.clrc.ca.gov/K402.html.   On August 17, 2015 the Commission recommended that its staff be directed to begin the process “of preparing a draft of a tentative recommendation that would propose an exception to the mediation confidentiality statutes . . . to address ‘attorney malpractice and other misconduct.’”   

However, the currently proposed exceptions to mediation confidentiality appear to include more than just attorney malpractice during the course of a mediation -- which was the focus of the opinions in Wimsatt and Cassel.  Rather, the Commission suggests that exceptions to the mediation confidentiality would include not only attorney misconduct and/or malpractice, but also misconduct or malpractice by an attorney serving as a mediator.  Of course, these additional proposed exceptions concern me because, as an attorney who mediates, no professional relationship -- such as an attorney-client relationship -- exists between me and either the attorneys or the parties to a mediation.  So why should a claim be allowed against a mediator based upon some form of fiduciary or professional relationship, where no such relationship exists?   Mediation is intended to reduce litigation, yet the potential breadth of these proposed exceptions suggests that the mediation process may become fertile ground for even more litigation.

Not surprisingly, the proposed scope of these exceptions to mediation confidentiality to allow claims by disgruntled parties – particularly the exceptions allowing claims against attorneys who serve as mediators -- has set off a firestorm of written comments to the Commission, especially from attorneys who mediate.   In response, the Commission has noted that the scope of these proposed exceptions are in the early stages and will go through significant review and refinement.  Indeed, in a memorandum dated October 2, 2015 the Commission noted that it “is still a long way from approving a tentative recommendation” and that “[n]o change to existing law is imminent and in fact the Commission does not yet even have a draft proposal for discussion purposes.” (Emphasis in original memo.)  

This process will probably continue for at least a few more years.  But it appears certain that, at some point, legislation will be passed which will exclude attorney misconduct during the course of mediation from the scope of mediation confidentiality.  What may happen to any proposed exceptions to mediation confidentiality with respect to attorneys who serve as mediators is less clear.  Of course, I will be paying close attention to that part of process.

 




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