Should Mediation Confidentiality Extend to Lawyer-Client Communications?

This year the state Supreme Court in Cassel v. Superior Court decided that, even in a subsequent lawsuit between a client and his lawyers, mediation confidentiality statutes do protect private discussions between a mediating client and his attorneys.

Like Justice Ming W. Chin in his concurring opinion, I agree that the court's hands were tied by the statutory provisions, and that removal of this loophole protecting lawyers potentially guilty of malpractice must be dealt with by the Legislature. As long as this loophole exists, I believe the primary and most important foundation of the mediation process - client self-determination - remains the unintended casualty.

The majority dipped its toes into the water regarding the exception for violation of due process, defined as those cases that "would lead to absurd results that clearly undermine the statutory purpose." But it then abruptly withdrew by stating that, "[n]o situation that extreme arises here." Also, the majority made it clear that they were merely deciding "whether, as a matter of law, mediation confidentiality requires exclusion of conversations and conduct solely between a client...and his attorneys." The conclusion was that they "need not, and do not, review the trial court's factual determinations that the communications it excluded from discovery and evidence were mediation related, and thus within the purview of the mediation confidentiality statutes." The inference being that had the majority delved into those murky waters, perhaps on a detailed evidentiary examination there might have been some wiggle room.

The implications of this decision will be felt throughout the state and perhaps beyond its borders in many ways, not the least of which will be the following:

For lawyers who represent clients in mediation, I feel this puts the burden on the lawyers to inform their clients in writing concerning the effect of this case regarding any possible subsequent claims for attorney malpractice committed during the mediation process. In view of Cassel, failure to do so would seem to constitute attorney malpractice in and of itself, unless a subsequent court might ironically hold that whether such conversations even took place was also excluded under Cassel.

And for lawyers serving as mediators, I feel this puts the burden on lawyers to make sure in writing (preferably as part of their confidentiality agreements) that the parties are aware of the effect of this case and, nevertheless, are agreeing to confidentiality. Failure to do so would presumably constitute mediator malpractice and may even extend to violation of the rules of professional responsibility. Consequently, I have revised the content of my confidentiality agreements so that such a provision is included in italics.

A major corollary consideration is that, ironically, once parties to a potential mediation are apprised of and fully understand the effect of Cassel, it would be absurd to think they will proceed to mediate without concern, if they mediate at all. Thus, an unintended result of Cassel may be contrary to what the Legislature and the courts have sought to accomplish, the promotion of mediation as the alternative dispute resolution process of choice.

As discussed in an earlier column (April 16), Cassel was a split-decision, arising out of Division Seven of the 2nd District Court of Appeal that, in effect, held that lawyer-client communications do not come within the protection of mediation confidentiality unless it can be demonstrated that there was a sufficiently close link between the communications and the mediation. The Supreme Court disagreed.

Cassel was followed by a few months in the cloth of another 2nd District decision (Porter v. Wyner, 2010 DJDAR 1119, Cal. App. 2nd Dist. July 14, 2010.) where a divided Division Eight effectively held that lawyer-client communications are exempt from statutory protection under the rules of mediation confidentiality. The Supreme Court granted a petition to review but held it until Cassel was decided.

On April 20, the Supreme Court transferred Porter to the 2nd District's Division Eight after holding "with directions to vacate its decision and to reconsider the cause in light of Cassel v. Superior Court (2011) 51 Cal.4th 113. (Cal. Rules of Court, [R]ule 8.528(d).)" This rule provides that, "[a]fter ordering review, the Supreme Court may transfer the cause to a Court of Appeal without decision but with instructions to conduct such proceedings as the Supreme Court orders." The Advisory Committee Comment for Subdivision (d) notes that it "is intended to apply primarily to two types of cases: (1) those in which the court granted review 'for the purpose of transferring the matter to the Court of Appeal for such proceedings as the Supreme Court may order' ([R]ule 8.500(b)(4)) and (2) those in which the court, after deciding a 'lead case,' determines that a companion 'grant and hold' case ([R]ule 8.512(c)) should be reconsidered by the Court of Appeal in light of the lead case or presents an additional issue or issues that require resolution by the Court of Appeal."

The facts of Porter require that it be reconsidered in light of Cassel, but Porter may also be a case that "presents an additional issue or issues that require resolution by the Court of Appeal." The underlying question in Porter was whether the rules of mediation confidentiality extend to lawyer-client communications where the client is seeking damages for breach of an attorney-client fee agreement - an issue Cassel did not address.

I have previously expressed the hope that, "the state Supreme Court in Cassel will meet the issue head on and establish in detail the rule to be followed in these cases where it appears that the mediation exception for confidentiality is being applied simply to avoid responsibility for alleged acts of legal malpractice." Unfortunately, I do not feel that has been accomplished by the decision.

While strictly construing the statutes requires a decision such as Cassel, I understand the statutory scheme behind mediation confidentiality to provide protection in order to encourage an unrestricted and unrestrained effort by all parties to "let down their hair" and get to the business of arriving at a resolution. My interpretation of Cassel is that it discourages rather than encourages that result.

It would be helpful for Division Eight to deal specifically with whether the rules of mediation confidentiality extend to lawyer-client communications (what I consider to be the key Porter issue) now that the ancillary problem of what is "for the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation," has been decided by Cassel.