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<xTITLE>Confidentiality Exceptions</xTITLE>

Confidentiality Exceptions

by Joe Markowitz
April 2012

Mediation's Place by Joe Markowitz

Joe Markowitz

Last year the California Supreme Court upheld California's expansive protection for mediation confidentiality to bar evidence of attorney-client communications made during mediation in support of potential malpractice claims against attorneys. In doing so, however, the court practically begged the legislature to consider amending the statute to allow the use of such evidence. A bill has now been introduced in the legislature to do just that. It would amend Section 1120 of the Evidence Code, which already provides some very narrow exceptions to mediation confidentiality, to add this new exception to the general rule of inadmissibility:

(4) The admissibility in an action for legal malpractice, an action for breach of fiduciary duty, or both, or in a State Bar disciplinary action, of communications directly between the client and his or her attorney during mediation if professional negligence or misconduct forms the basis of the client’s allegations against the attorney.

Mediators tend to oppose reflexively any exceptions to mediation confidentiality, at least partly out of self-interest. (None of us wants to be asked to testify about what happens at a mediation.) Mediators are also legitimately concerned about opening the doors to new litigation springing from buyer's remorse over settlements that parties are induced to make during mediation. Any exceptions to a broad protection for mediation confidentiality could undermine the whole premise of mediation. The process is meant to operate with a minimum of rules, sanctions and judicial oversight. Once an exception is carved out to assist attorney malpractice claims, the next case raising some alleged egregious misconduct in mediation (whether by counsel, by the opposing party, or by the mediator) could lead to carving out additional exceptions, to the point where the whole process may need to be transcribed to provide a proper record of what occurred. And once everything is on the record, then we are not going to be able to have the kinds of conversations we need to have to achieve settlement by means of confidential negotiations.

On the other hand, the allegations in a case like Cassel provide cause for legitimate concern. As I outlined in a previous post, Cassel claimed that after a 14 hour mediation session, he was "hammered" into settlement. He claimed that his attorneys threatened to abandon him before trial, falsely offered to discount their fees if he would accept a settlement, and falsely assured him that he would be able to negotiate a side deal that would enable him to recoup some of the losses he was waiving. Exhausted and seeing no alternative, he claimed that he finally signed the settlement agreement at midnight without a full understanding of its complicated terms. Is it a sufficient answer to parties feeling victimized in such a manner to tell them they don't have to sign whatever it is their attorneys and perhaps the mediator are urging them, after a grueling and confusing mediation session, to sign? If we don't deal with such complaints by providing an opportunity to sue the alleged offending attorneys or other parties, how do we deal with potentially abusive conduct in a way that will maintain public satisfaction with the mediation process? Do we really want to suggest that if a mediator or a party's attorney commit outright fraud, or engage in other coercive tactics to induce a party to settle, they have no remedy?

It seems to me that one source of the problem is that mediation is a profession with few agreed-upon or enforceable standards. At least in California, mediation has no governing body, weak professional associations, and no licensing or educational requirements other than those that may be enforced by various court panels. Mediation has evolving ideas of best practices, but still mainly relies on trust that the mediator will live up to them. Attorneys, by contrast, must abide by rules of professional conduct, and face discipline as well as malpractice claims, if they fail to do so. The exception to mediation confidentiality under discussion can be seen as a way to make sure attorneys adhere to those guidelines whether in a courtroom, or in a secret conference room. They should gain no cloak of immunity from professional standards when they usher their client to a mediation.

The issue of mediation confidentiality raises broader concerns about assuring that mediations are conducted in a fair and safe manner. That imposes some burden on mediators to enforce ethical standards of conduct. The best way to maintain the public's trust in the process may be to develop standards of practice for mediators, as well as some way to assure adherence to them. At the same time, we have to make sure that enforcing those standards does not threaten the values of mediation confidentiality, or unduly burden the process of mediation with the kinds of rules and costs and sanctions and procedures that have made the court system so cumbersome, and gave rise to the need for mediation in the first place.


Joseph C. Markowitz has over 30 years of experience as a business trial lawyer.  He has represented clients ranging from individuals and small businesses to Fortune 500 corporations.  He started practicing with a boutique litigation firm in New York City, then was a partner in a large international firm both in New York then in Los Angeles, then returned to practicing with a small firm and on his own.  In addition to general commercial litigation, Mr. Markowitz has expertise in  intellectual property, employment law, entertainment law, real estate, and bankruptcy litigation.  Mr. Markowitz has managed his own firm since 1994. Mr. Markowitz was trained as a mediator more than 15 years ago, and has conducted a substantial number of mediations as a member of the Mediation Panels in the Los Angeles County Superior Court, the District Court and Bankruptcy Court in  the Central District of California, as well as private mediations.  He has served since 2010 as a board member of the Southern California Mediation Association.   

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