In a hearing on December 1, 2017 lasting one hour beyond the scheduled end time, the California Law Revision Commission (“CLRC”) gave its final approval to the Tentative Recommendation issued in June 2017 to create certain exceptions to mediation confidentiality. Its final approval is subject to the chair and /or vice chair approving further language revisions to proposed Evidence Code Section 1120.5 that were discussed and approved during this four-hour meeting.
At the meeting, the Commissioners took up all of the suggestions and comments set out in Memorandum 2017-61. Initially, it agreed to a minor word change of “professional requirement” to “professional obligation” in proposed Evidence Code section 1120.5(a)(1) to be consistent with other statutes. It then launched into a major discussion lasting approximate ninety minutes whether the exception should apply ONLY to state bar disciplinary proceeding as was suggested at its last meeting. Ultimately, the Commissioners voted NOT to limit the exception to state bar disciplinary proceedings but rather to stay with its original inclination that the exception should apply to (1) a legal malpractice civil action; (2) a fee dispute brought under the Mandatory Fee Arbitration statue; and (3) a state bar disciplinary proceeding. Towards the end of the hearing, the Commissioners voted to include into the exception, a legal malpractice action that is arbitrated rather than filed in court.
One suggestion was to include “fraud” and “breach of fiduciary duty” into the exceptions but the Commissioners declined deciding that the language already in the statute was broad enough to cover these precise claims.
The Commissioners further declined to place into the statute itself language explaining about mediated settlement agreements now found in the Comment section as well as declined any further action to address the possible inconsistent evidentiary issue raised in an action involving both a complaint and cross-complaint. While the exception would apply to the complaint, it would not apply to the cross-complaint. The CLRC voted to leave this issue to the courts to adjudicate.
The CLRC also declined to address the issue of what, if any, impact, a successful malpractice action would have on a prior settlement agreement. Would it unravel the settlement? Again, under the belief that collateral estoppel would not apply, the Commissioners viewed it as a non-issue.
The Commissioners did agree to add language within the statute (Section 1120.5(a)(3)) reciting the same exceptions that now appear in Evidence Code 703.5: that while a mediator is generally incompetent to provide oral and written testimony, this incompetency is removed in matters giving rise to civil and criminal contempt, constitutes a crime, be the subject of investigation by the State Bar or Commission on Judicial Performance; and give rise to disqualification under certain provisions of CCP 170.1. But, the Commissioners declined to add a cross reference to the definition of “writing” as contained in Evidence Code 250 on the basis that such is not usually done.
Perhaps one of the most important issues taken up by the Commissioners was “notice”. When and to whom and how much notice should be given to the other parties to the mediation that one of the exceptions to mediation confidentiality given has been invoked? After much discussion lasting close to an hour, the Commissioners decided that not only would the notice requirement apply to all three categories of exceptions (The draft statute as presently worded requires notice ONLY when a civil action for legal malpractice is filed and NOT to state bar disciplinary actions or mandatory fee arbitration disputes.) but the party instituting one of these three proceedings must provide notice that (1) there is a dispute under the relevant subsection of proposed Evidence Code 1120.5, (2) mediation confidentiality is at issue in that confidential information may be disclosed, and (3) the notice includes a copy of the complaint. Reasonable notice is to be given prior to the invocation of the exception to mediation confidentiality.
Once again, the issue of awarding attorney fees to a mediation participant who is a non-party to the legal malpractice action, mandatory fee arbitration dispute or state bar disciplinary action who moves to protect his/her confidential information was discussed. As before, the Commissioners declined to include any cost shifting provisions, believing that existing statutes can resolve this issue.
The next to the last issue considered had been raised several times but never decided by the CLRC: contractual waivers. While the original legislative mandate in AB 2025 included the consideration of contractual waivers, the CLRC had up to now put aside addressing it. At this hearing, it definitively agreed to prohibit such waivers. The proposed statute will now include a subpart (h): “Any agreement purporting to override this section is null and void.”
Finally, the Commissioners again took up the issue of the possible obligation of either the attorneys or mediators to inform mediation participants about the exception. As on previous occasions, they demurred, declining to make any recommendations on this “informed consent” issue believing that if counsel is involved in a mediation, they have a duty of full disclosure under the California Rules of Professional Responsibility and if the participant is self-representing- the issue does not arise.
So- at a few minutes past 6:00 p.m., the Commissioners voted to approve the Tentative Recommendation subject to the revisions to be made in the proposed statute as just noted and approved by the Chair and/or Vice Chair. By taking the vote at this meeting rather than putting it over to its meeting in February 2018, the Commissioners realized that their Tentative Recommendation would make it into the upcoming legislative session in which all legislative bills must be submitted prior to its next meeting. In short, there would have been a delay of a year in submitting this to the Legislature had they waited until February 2018 to finish up.
To those who are interested in this subject with views one way or the other, I urge you to contact your state legislator.
Anne Sawyer is an independent Mediation and Alternative Dispute Resolution Consultant. In addition her private consultation practice, she is the Executive Director of the Southern California Mediation Association.
Her mission is to foster, support and promote mediators and other neutrals and to further increase peaceful resolution of conflicts. Raising public awareness as to the many values of mediation and increase its use to address a broad variety of public and private disputes in a confidential, safe and empowering process is her passion.