SB 954: Attorneys must provide written disclosure explaining mediation confidentiality

Senate Bill 954, which took effect Jan. 1, requires attorneys, before participating in mediation, to provide written disclosures to their clients explaining mediation confidentiality and to obtain written acknowledgement indicating understanding of the effects of such confidentiality.

California's public policy favors voluntary resolution of disputes via mediation. To promote this alternative to trial, in the mid-nineties, the California Legislature unanimously approved the codification of mediation confidentiality in Evidence Code Sections 1115-1128.

Following enactment, the California Supreme Court upheld the statutes on four separate occasions. The fifth, and most recent, is the impetus for SB 954. In Cassel v. Superior Court, 51 Cal. 4th 113 (2011), the court addressed "the effect of mediation confidentiality statutes on private discussions between a mediating client and attorneys who represented him in the mediation." While the court acknowledged that some policies could support limiting the scope of mediation confidentiality to allow a client recourse in the context of alleged wrongdoing, the plain statutory language clearly conveyed the Legislature's intent to exclude all such communications unless expressly waived.

The Cassel opinion led, in large part, to the California Law Revision Commission analyzing "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, and the effectiveness of mediation."

The commission's final report recommended an exception to mediation confidentiality "where the evidence is relevant to prove or disprove an allegation that a lawyer breached a professional obligation when representing a client in the context of a mediation or a mediation consultation." This recommendation was highly criticized, and ultimately garnered very little support. One recurring argument was that the exception was not drafted narrowly enough to target attorney misconduct, and would allow just enough room for courts to eventually undermine mediation confidentiality entirely.

SB 954 addresses a concern of those advocating for an exception. There is no change to the existing paradigm, and SB 954 does not expand client's rights. But, SB 954 effectuates an awareness of the restrictions, which will allow clients to make an informed decision about whether or not to engage in mediation.

SB 954 adds new Evidence Code Section 1129 and a new paragraph to the existing Section 1122. Section 1129 requires that attorneys provide a client participating in mediation a written disclosure and obtain a signed acknowledgment by the client. Evidence Code Section 1129 also contains language that is deemed compliant for the printed disclosure. The disclosure clarifies that by mediating, the client is not prevented from suing for malpractice, but will not be able to offer the communications covered by mediation confidentiality as evidence. Additionally, the amendment specifically states that failure to comply is "not a basis to set aside an agreement prepared in the course of, or pursuant to, a mediation." Lastly, should an attorney fail to make the disclosure appropriately they may be subjected to a disciplinary proceeding pursuant to the update to Evidence Code Section 1122, subdivision (a)(3).

SB 954 appropriately balances the needs for reliable confidentiality in the context of mediation and for attorney and client to have the same level of understanding about the consequences of specific choices in the context of litigation. And, with Section 1129 providing disclosure language to use, lawyers will not have to wonder what they need to communicate with their clients.