Mediation confidentiality changes on the horizon

A new day could be dawning in California for mediation confidentiality. The state's Law Revision Commission, after express authorization by legislative resolution or statute, makes recommendations to the Legislature to correct defects in California statutory law and to bring it into harmony with modern conditions. Subject to minor editorial changes that may be made prior to final publication, the commission has just released its recommendation to the Legislature concerning the relationship between mediation confidentiality, attorney malpractice and other misconduct by lawyers. (See below for link to report.)

Following extensive public meetings, testimony over an extended period, and written submissions from "hundreds of individuals and about forty organizations," the commission has concluded that "existing California law does not place enough weight on the interest in holding an attorney accountable for malpractice or other professional misconduct in a mediation context." This was the result notwithstanding strenuous opposition stressing the importance of protecting mediation confidentiality in general, rather than ensuring attorney accountability for mediation misconduct as a singular issue.

This resulted from the commission's belief that "courts need to be able to effectively evaluate allegations that an attorney engaged in misconduct in the mediation process ... [because] public confidence in the administration of justice depends on providing such an opportunity to the citizens of this state."

Balancing competing considerations differently than many of those appearing before it orally and in writing, the commission's recommendation was delivered notwithstanding serious objections from members of the bar, mediators, scholars, educators, bar associations, dispute resolution organizations, and retired judges, to name but a few in the close to 600 submitted comments, testimony, or other assistance with this study.

The specific problem the commission has attempted to deal with is that occasionally a party to a mediation subsequently alleges that the party's attorney was guilty of malpractice or other misconduct committed during the process. The argument for an exception to mediation confidentiality in such cases is that "protecting mediation communications and writings might impede a court in evaluating such a claim and rendering a just decision." The commission has designed an exception that will "hold attorneys accountable for misconduct in the mediation process" but also allow them to "effectively rebut meritless misconduct claims."

Even though limited to such specific cases, this new legislation will significantly remove historical protection of mediation confidentiality regarding writings and communications in non-criminal cases that encourage those engaged in the process to deal openly without fear of disclosure. See Cassel v. Superior Court, 51 Cal. 4th 113, 131 (2011), reaffirming the principal purpose of mediation confidentiality statutes "is to assure prospective participants that their interests will not be damaged, first by attempting this alternative means of resolution, and then, once mediation is chosen, by making and communicating the candid disclosures and assessments that are most likely to produce a fair and reasonable mediation settlement."

However, it seems the current work of the commission was triggered by a reaction to Cassel, because the California Supreme Court's decision there was defined specifically by the situation involving communications between attorney and client during mediation, and thus could not be introduced as evidence in the client's subsequent malpractice action against the attorney. The decision's centrifugal force was that all discussions conducted in preparation for, and all mediation-related communications that take place during, a mediation itself are protected from disclosure, even if these do not occur in the presence of the mediator or other disputants.

Pursuant to resolution (2012 Cal. Stat. res. ch. 108), the commission was directed by the Legislature to analyze this alleged problem. It was asked to address "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, and the effectiveness of mediation."

In addition, the commission was to consider applicable present and earlier provisions of the California Evidence Code, the "availability and propriety of contractual waivers, the law in other jurisdictions (including the Uniform Mediation Act and other statutory acts), scholarly commentary, judicial decisions in California and elsewhere, and any data regarding the impact of differing confidentiality rules on the use of mediation."

The purpose was to "balance the competing public interests between confidentiality and accountability" in the "creation of a new exception to mediation confidentiality ... designed to hold attorneys accountable for misconduct in the mediation process, while also allowing attorneys to effectively rebut meritless misconduct claims ... pursuant to Resolution Chapter 150 of the Statutes of 2016. "

The commission concluded that "existing California law does not place enough weight on the interest in holding an attorney accountable for malpractice or other professional misconduct in a mediation context." By precluding the use of mediation writings and other communications in a subsequent noncriminal proceeding, as in a legal malpractice case based on how an attorney handled a mediation, the statutory confidentiality provisions (particularly Evidence Code Section 1119) raise a difficult and sometimes impossible barrier for a client to hurdle when required to provide evidence in support of the allegations. On the other hand, currently the attorney may be prohibited from proffering mediation communications in providing a defense.

In proposing this approach, the commission recognized the "policy interests underlying the mediation confidentiality statutes are significant and warrant protection," and that a "careful balancing of the competing interests is necessary." As a result, the proposed new exception was narrowed to "help protect the confidentiality expectations of mediation participants," requiring a "number of important limitations."

As a protection to minimize the "harm to the policy interests served by [the current mediation confidentiality statutes]," among others the limitations would be the following:

• Resolving claims relating to the "enforcement of a mediated settlement agreement, such as a claim for rescission of such an agreement or a suit for specific performance," would be excluded.

• The exception would apply only in State Bar disciplinary proceedings, claims for damages due to legal malpractice, or attorney-client fee disputes.

• The exception would apply only to alleged attorney misconduct in a professional capacity in representing a client in a mediation context, but not while serving as a mediator.

• A mediator generally could not testify or provide documentary evidence pursuant to the exception.

• A litigant could not go to another source to obtain or learn the content of a mediator's writing or oral communications.

• The same standard would govern admissibility and disclosure under the exception to help safeguard the interests underlying mediation confidentiality, using the identical standard for both admissibility and disclosure of mediation evidence: relevancy and satisfaction of the other requirements that require a stricter standard for disclosure than one governing a routine discovery request.

• Admission and disclosures would be limited to communication necessary for application of the exception, and admission or disclosure of a mediation communication pursuant to the exception would not render that evidence (or any other mediation communication) admissible or discoverable for any other purpose.

• A court could use judicial tools to limit public exposure of mediation communications.

• Mediation participants would receive notice and could take steps to prevent improper disclosure of mediation communications.

Additionally, the commission recommended several provisions to ensure even-handed application of the new proposed legislation. The exception would apply equally to all types of mediation communications and writings; and, existing law governing mediator immunity would remain unchanged. The exception would expressly state that any contractual agreement purporting to override the exception "is null and void," and it would not include any provision for sanctions. Application would only be possible concerning evidence relating to a mediation or mediation consultation that commences on or after the exception becomes operative.

As is the case with many changes in how we live and function in society, small inroads often lead to major overhauling of accepted standards. This appears to be occurring here. On its own, this exception to mediation confidentiality may be understandable in the specific situation it seeks to correct, However, in the long term it may very well be just the beginning of the end generally of mediation confidentiality as we know it.

Historically, over 90 percent of the commission's recommendations have been enacted into law, affecting more than 22,500 sections of the California statutory codes. To have opposition opinions considered, it is suggested they be directed to Sen. Hannah-Beth Jackson, chair of the California State Senate Standing Committee on Judiciary and Assemblymember Mark Stone, chair of the Assembly Committee on Judiciary.