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<xTITLE>Mediator Ethics: Should You Ask for a Waiver of Liability?</xTITLE>

Mediator Ethics: Should You Ask for a Waiver of Liability?

by Bill Quatman
August 2021 Bill Quatman

I read a “recommended” form of Mediation Agreement and stopped when I saw this sentence: “The Mediator will have no liability for any act or omission in connection with or arising out of this mediation.”  That struck me as odd, perhaps unenforceable, maybe even unethical. A blanket waiver of all claims, with no limitations, up-front, before the mediator takes any action.

Do parties hiring a private mediator expect him or her to demand this type of complete immunity? Many mediators carry insurance, though claims are rare and premiums are low. But what if the mediator reveals some confidential fact or document without consent? Or misstates an offer’s terms? Or errs in drafting a settlement agreement? Can a mediator be held liable for such negligence? And should he or she ask for this release? Is it even valid in your state?

The U.S. Supreme Court has held that judges have “absolute immunity” in carrying out their judicial role and the Court has extended absolute immunity to certain others who perform functions closely associated with the judicial process. Cleavinger v. Saxner, 106 S. Ct. 496, 500 (1985). Arbitrators are generally immune from civil liability by what is known as “arbitral immunity.” See, e.g., Corey v. New York Stock Exch., 691 F.2d 1205, 1209 (6th Cir. 1982). Likewise, those acting in quasi-judicial roles, such as architects or engineers, are also cloaked with immunity when acting as a neutral in dispute resolution, say between an owner and a contractor. Lundgren v. Freeman, 307 F.2d 104, 117 (9th Cir. 1962) (“architects, acting as quasi-arbitrators, have been held immune from suit”). 

But, are mediators entitled to the same immunity? Does it matter if the mediator is court-appointed, or privately solicited? And, if not, should they demand immunity by written agreement?

One court commented that a prospective waiver of a customer’s right to sue might tend to encourage violations of the law and, thus violate public policy. Cange v. Stotler & Co., 826 F.2d 581, 594 (7th Cir. 1987). Would a mediator who obtains a prospective waiver actually be “encouraged” to be sloppy in his or her practice? I would hope not! But there are lots of folks out there offering mediation services. 

A little research shows that “absolute immunity” has been granted in some cases to court-appointed mediators or neutral “case evaluators,” performing tasks within the scope of their official duties. Wagshal v. Foster, 28 F.3d 1249 (D.C. Cir. 1994)(civil suit dismissed against mediator and members of mediator's law firm); Todd v. Shoopman, 2012 WL 3531563 (E.D. Cal. 2012)(court-appointed mediator was “absolutely immune” from liability for civil damages). In Todd, the court said, “There is no meaningful distinction between a mediator and an arbitrator for purposes of immunity.” Another 2003 California case applied absolute immunity to the acts of a private family-law mediator to whom the court had referred a case. Goad v. Ervin, 2003 WL 22753608 (Cal. Ct. App. 2003). But see, DiGiuseppe v. Talbot, 2017 WL 2324303 (Conn. Super. Ct. 2017) (rejecting absolute immunity for a mediator-lawyer who was “neither a court-appointed mediator nor a judicial branch employee”).

It has been noted that “Not all states are willing to extend judicial immunity to private mediators,” Mediator immunity—Common law immunity, 1 Mediation: Law, Policy and Practice § 11:12 (2020) citing to the 2017 Connecticut DiGiuseppe case.

Many mediators are lawyers, and ethics rules in some states prohibit a lawyer from asking for “prospective waivers” from their clients. See, e.g., Rule 1.8.8 of the California Rules of Professional Conduct, entitled “Limiting Liability to Client” (2018)(“A lawyer shall not: (a) Contract with a client prospectively limiting the lawyer’s liability to the client for the lawyer’s professional malpractice”). A lawyer-acting-as-mediator might argue that he or she is not “practicing law” and, therefore, free to seek a waiver from clients. Other states generally bar so-called “prospective waivers” across the board – even for non-lawyers, if they bar all claims – including those for gross negligence. 

In California, mediators of attorney fee disputes are immune by statute. Cal. Bus. & Prof. Code § 6200 (f) says that a mediator “shall have the same immunity which attaches in judicial proceedings”. Delaware statutes carve out from mediator immunity any act or omission “made or done in bad faith, with malicious intent, or in a manner exhibiting a willful, wanton disregard of the rights, safety, or property of another.” Del. Ch. Ct. R. 95. (See also Illinois law, 225 Ill. Comp. Stat. Ann. 100/4, which carves out “cases involving willful or wanton misconduct”).

California and Delaware are not alone. It is said that “a majority of states and the District of Columbia now have statutes, court rules (both state and federal), or case law creating immunity for mediators to insulate them from most, if not all, civil liability for wrongdoing during the mediation.” Scott H. Hughes, Mediator Immunity: The Misguided and Inequitable Shifting of Risk, 83 Or. L. Rev. 107, 110 (2004)(see Appendix, listing the states and their immunity laws). But a close reading shows there are major variations in those laws among the states. 

For example, in my part of the country, Kansas statutes provide for immunity for mediators in publicly-funded “registered and approved programs” and “disputes referred by a court, by state government or as otherwise provided by statute” except for acts of “gross negligence with malicious purpose or in a manner exhibiting willful disregard of the rights, safety or property of any party to the process of dispute resolution.” Kan. Stat. Ann. § 5-513. Just across the state line, however, my home state of Missouri has no statutory immunity for mediators, private or court-appointed. 

In Missouri, the case law is settled that “though disfavored,” prospective waivers are not prohibited as against public policy. However, there are limitations. In Missouri, “one may never exonerate oneself from future liability for intentional torts or for gross negligence, or for activities involving the public interest.” Alack v. Vic Tanny Int'l of Missouri, Inc., 923 S.W.2d 330, 337 (Mo. 1996). The Court in Alack warned that the party seeking a waiver needs to make the language clear, noting: “There must be no doubt that a reasonable person agreeing to an exculpatory clause actually understands what future claims he or she is waiving.” Id. at 337-38. Does this require a mediator to explain the waiver? What about parties not represented by counsel? One Eighth Circuit case held that Missouri law would never allow a prospective waiver of punitive damages for an intentional tort or gross negligence. Stark v. Sandberg, Phoenix & von Gontard, P.C., 381 F.3d 793, 800 (8th Cir. 2004). Therefore, a valid mediator’s waiver in my state would need to carve out intentional torts, gross negligence, and activities involving the public interest or clearly note that the waiver applies “to the extent allowed by law,” or likewise.

For arguments against mediator waivers, at least one law review author wrote that, “It is disingenuous for mediators to accept the protections of immunity, the jurisprudential basis of which depends upon equating their role with that of judges.” Scott H. Hughes, Mediator Immunity: The Misguided and Inequitable Shifting of Risk, 83 Or. L. Rev. 107, 141 (2004). Mr. Hughes implies that mediators do not bear a resemblance to judges, saying: “No states currently license mediators and only a few have significant statewide certification programs; states do little or no regulating of the profession. Most mediators complete training programs of thirty-two or forty hours before beginning to mediate, but this is more of a community norm than a requirement. In most states, it is possible to hang out a shingle and start mediating without any formal training.” Mediator Immunity, 83 Or. L. Rev. at 164. See also Jeff Kichaven’s 2009 article: Nix Your Mediator's Prospective Waiver of Liability (mediate.com).

So, if the case law and statutes in your state do not give private mediators “quasi-judicial immunity,” what are the ethics of a mediator (lawyer or not) asking the parties to waive his or her mistakes during the mediation process? Is a waiver the “price you pay” for asking me to help resolve your dispute? I don’t have the answer, but I have not included the waiver (thus far) in my practice, although others routinely do so. Make no mistake, I clearly understand the “why” behind these prospective waivers, but I question the ethics and, ultimately, the enforceability, of these clauses. Also, when you ask the parties to trust you as a mediator, but then also ask them to release you up-front, it seems that it does not breed trust.

What are your thoughts? I am still wrestling with this. 

Biography


Mr. Bill Quatman is a licensed architect and attorney who is past General Counsel to Burns & McDonnell Engineering Co., Inc. (ranked as #6 on Engineering News Record’s Top Design-Build Firms and #9 in ENR’s Top Design Firms in 2020). He is an internationally recognized author and speaker on construction law and on design-build. Bill is a past National Board Chair of the Design-Build Institute of America (DBIA) (2016).  He is also a past Chair of the DBIA Contract Documents Committee and its Laws Committee. In 2007, Bill was AIA’s National Chairman of the Design-Build Knowledge Community. He has spoken at eleven AIA and fourteen DBIA National Conventions on design-build and other topics, and he has given presentations on design-build across the United States, in Canada, England and Puerto Rico.  Bill is a Fellow of the American Institute of Architects (FAIA), the Design-Build Institute of America (FDBIA), and in The Construction Lawyers Society of America (CSLA). He has over 40 years of experience in the legal, design and construction industries.

Mr. Quatman is the author of Design-Build for the Design Professional (Aspen Publishing 2001), as well as the chief editor of The Architect’s Guide to Design-Build Services (Wiley 2003).  He is also a past President of The Jefferson Society, for architect-lawyers. Mr. Quatman has been named one of The Best Lawyers in America.



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