Mediation Confidentiality: How Far Should It Go?

Mankin_Peter_webMediation has become an important and necessary part of the litigator’s toolbox in assisting clients in resolving disputes. This is especially true in the Contra Costa County courts, as well as in most courts in the Bay Area. Mediation is now less of an “alternative” process and more of a common, if not mandatory, component of the litigation process.

Most judges and legal professionals agree that mediation is a beneficial process for all involved. It increases court efficiency by reducing court calendars at a time when court resources have been cut to the bone by budget reductions. Mediation also has direct benefits to clients: It can substantially reduce the high cost of litigation, it saves time and eliminates the risk of uncertain litigation, and it gives clients more say into how their disputes are resolved.

Confidentiality is one of the cornerstones of the mediation process. As said by the Supreme Court, confidentiality is “designed to provide maximum protection for the privacy of communications in the mediation context. A principal purpose is to assure prospective participants that their interests will not be damaged … by making and communicating the candid disclosures and assessments that are most likely to produce a fair and reasonable mediation settlement.”[1]  Most mediators and attorneys agree that confidentiality is a positive and important part of mediation.

This article will summarize the details of mediation confidentiality and then discuss the practical and ethical implications of current proposals to limit mediation confidentiality.

What is mediation?

Mediation is defined broadly in Evidence Code Section 1115 as “a process in which a neutral person or persons facilitate communication between the disputants to assist them in reaching a mutually acceptable agreement.” The Code specifically distinguishes mandatory settlement conferences as not being covered by the confidentiality provisions

What is confidential?

Section 1119 protects two kinds of evidence from discovery and admissibility. “Anything said or any admission that was made for the purpose of, in the course of, or pursuant to a mediation or mediation consultation” is protected. In addition, any “writing that is prepared for the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation” is also protected.

What about the scope of confidentiality? It is not a “privilege,” as some mistakenly call it. Rather, it is a rule of evidentiary exclusion. Section 1119 merely prohibits the admissibility or the discovery or disclosure of the oral statement or writing in a civil action, arbitration or administrative proceeding. Confidentiality does not apply in a criminal proceeding.

Can confidentiality be waived or lost?

Confidentiality is not waived or lost by statements or conduct that would imply intent to waive, such as in the case of a privilege. The exclusion can be waived or lost only in the ways outlined in Section 1122. One of two things must occur: either all participants in the mediation must expressly agree to a disclosure; or, if the communication or writing was made or prepared on behalf of some, but not all, of the participants, those persons must expressly agree to its disclosure. Of course, if the speaker or creator of a writing introduces the evidence in court, that would also waive confidentiality.

When does confidentiality start and end?

Confidentiality starts when the first “mediation consultation” starts. This would include the initial contact and any pre-mediation communications with the mediator. This would also include communications with any other parties if they are part of the mediation consultation or mediation itself. Section 1125 defines when the mediation ends, which can be when there is a final settlement, if the mediator provides a writing that states that the mediation is terminated or if there is no communication between the mediator and any of the parties for 10 calendar days. The 10 days can be extended by agreement. As a practical matter, if the parties and mediator want to keep the mediation “open” after a mediation session, it should be documented in writing to ensure that confidentiality continues to apply.

Settlement agreements

If a settlement is reached at mediation, proper steps must be taken to ensure that the settlement agreement is admissible for enforcement purposes. Section 1123 describes the “magic language” that should be included in a settlement agreement. In short, there must be language that the agreement is “admissible or subject to disclosure” or that the agreement is “enforceable or binding.” Oral agreements have stricter requirements under Sections 1124 and 1118. Essentially, the oral agreement has to be recorded by a court reporter or audio recording, or the settlement must be placed on the record.

Exceptions to confidentiality: Are there any? Should there be?

California’s statutory scheme of mediation confidentiality is very broad. Essentially (as some describe it), the “Las Vegas Rule” applies: “What happens in mediation, stays in mediation.” A consistent line of California cases has upheld the strict interpretation of the confidentiality statutes. In 2011, the Supreme Court decided Cassel v. Superior Court. In discussing mediation confidentiality, the Cassel court stated that “we have repeatedly said that these confidentiality provisions are clear and absolute. Except in rare circumstances, they must be strictly applied and do not permit judicially crafted exceptions or limitations, even where competing public policies may be affected.”[2]

The Cassel case involved a claim by a client that his attorney committed malpractice during mediation. Mr. Cassel alleged that during the mediation he felt “tired, hungry, and ill,” but that his attorneys insisted that he remain until the mediation was concluded. He claimed that his lawyers then continued to harass and coerce him to accept a settlement by threatening to abandon him at the impending trial, misrepresented certain terms of the proposed settlement, and falsely assured him they would negotiate a side deal regarding a reduction of fees if he settled. Mr. Cassel said his attorneys even followed him into the bathroom to “hammer” him to settle. Testimony in the malpractice trial of this alleged conduct during mediation was held inadmissible under the mediation confidentiality statutes. The court refused to create an exception to the applicability of the confidentiality statutes. The court specifically found that applying mediation confidentiality to legal malpractice claims did not implicate due process concerns or warrant an exception on constitutional grounds.

Justice Ming Chin, in a “reluctant” concurring opinion, expressed concern that the holding would “effectively shield an attorney’s actions during mediation, including advising the client, from a malpractice action even if those actions are incompetent or even deceptive.” He agreed that the court was correct in not creating a judicial exception, but specifically suggested that the Legislature consider the issue of a legal malpractice exception to the confidentiality rule.

A debate has now arisen: One group supports a legislative change to the statute creating a confidentiality exception for evidence of attorney malpractice, and some even advocate doing away with confidentiality completely. Another group takes the position that creating such an exception would be detrimental to the mediation process and should not be created. In 2012, a proposal was made in AB 2025, which attempted to create an exception under Section 1124 for “evidence of legal malpractice, breach of fiduciary duty or State Bar disciplinary action.” The Legislature then directed the California Law Review Commission (CLRC) to analyze the issue, essentially to weigh the competing policy decisions: The benefits of confidential mediation versus client protection from malpractice or other attorney misconduct. The CLRC is in the process of holding hearings and receiving input on these important issues.

Opponents to the proposed malpractice exception express concern about the “slippery slope” of confidentiality exceptions and that any exceptions will chill or hinder the important mediation process. They also point out that while extreme examples such as in the Cassel case can be imagined, there is no evidence that malpractice in the mediation process is a pervasive problem. Proponents of the exception take the position that discouraging and remedying attorney misconduct is a more important public policy that should warrant a legislative exception to mediation confidentiality for legal malpractice.

The debate illustrates the difficulty of weighing competing public policies. The CCCBA ADR Section Board has unanimously taken the position that exceptions to mediation confidentiality should not be created. The CCCBA Board of Directors has considered the issue and after considerable debate and a close look at important policy issues, decided to support the position that legislative exception should not be made, resolving that “The Contra Costa County Bar Association urges the California Law Review Commission to recommend no weakening of mediation confidentiality protections (Evidence Code sections 1115-1128), and to uphold current law.” In 2014, the debate will continue in the legal and mediation communities, as well as in the Legislature. If you have opinions on the matter, we urge you to give input to the CLRC and the Legislature.

In the meantime, happy mediating!

Peter A. Mankin has practiced real estate and business law in Walnut Creek for many years, as well as serving as a mediator throughout the Bay Area. He is a former CCCBA President and is currently President of the ADR Section.

[1] Cassel v. Superior Court (2011) 51 Cal 4th 113.
[2] Cassel, supra, at 118.

Filed Under: Featured


RSSComments (0)

Trackback URL

Comments are closed.