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MEDIATION CONFIDENTIALITY UPDATE — JULY 29, 2016

Since the mid-1980s California law has protected mediation communications from disclosure in order to promote the sort of candor and openness that is essential to effective mediations.

But a 2011 decision of the California Supreme Court barring the admission of evidence of mediation communications in a case in which a client alleged that a lawyer committed malpractice during the mediation[1]  has resulted in an effort to revise the California Evidence Code to allow mediation communications to be offered into evidence in order to permit lawyers to be disciplined (and held financially accountable) for misconduct during mediation proceedings).

At the direction the California Legislature, the California Law Revision Commission (“CLRC”) is now conducting a study (Study K-402), which is focused on “The Relationship Between Mediation Confidentiality and Attorney Malpractice and Other Misconduct”.  Since work began in 2012, the Commission’s staff has prepared a collection of comprehensive memoranda surveying the law, practice, statues, cases, and commentary on the subject.  The Commission has also received substantial input from mediation participants (including parties, lawyers, and mediators) addressing whether mediation confidentiality should be compromised in order to permit lawyers to be sued and disciplined for mediation-related misconduct.[2]

The Law Revision Commission’s Tentative Decision to Allow the Disclosure of Mediation Communications Relevant to Alleged Lawyer Malpractice.

In recent meetings, the Law Revision Commission has adopted tentative proposals to recommend that the Legislature amend California’s Evidence Code to allow parties to discover and offer into evidence all mediation communications that help prove or disprove claims that attorneys committed malpractice (as an advocate for a mediating party) in connection with a mediation.

To date, the CLRC’s tentative decisions include:

  • Creation of an exception to mediation confidentiality for all evidence proving or disproving professional misconduct or malpractice by an attorney advocate where the misconduct occurs “in the context of a mediation”.
  • This exception would not apply in a case alleging malpractice by the mediator, even where the mediator is an attorney.
  • The exception would apply in State Bar disciplinary proceedings as well as in malpractice suits.   (Whether the exception would apply in attorney-client fee disputes is still undecided.)
  • The exception would not permit disclosure of mediation communications as part of an effort to unwind a mediated settlement agreement.
  • The exception would not affect existing mediator protections against being compelled to testify.   Nor would it affect any current mediator immunity against suit.

The Law Revision Commission’s Tentative Recommendations Rejecting Potential Procedures To Limit Unnecessary Or Abusive Disclosure Of Confidential Information.

In its most recent meetings, the CLRC has also rejected a number of proposals that would have imposed preliminary procedural requirements before mediation communications could be revealed.   In particular:

  • The Commission rejected any requirement that cases which would reveal confidential mediation communications be subject to a preliminary judicial or private screening to bar the filing of cases that lack substantial merit.
  • The Commission also rejected proposals to require a judge to determine, before confidential information would be subject to discovery or disclosure, that the information is relevant to the malpractice claim and that the need for the evidence outweighed the privacy interests of people who would be adversely affected by disclosure.  (This process is used in certain types of proceedings under Uniform Mediation Act, which has been adopted by a number of states and has more limited confidentiality protections than are available under California law.)

The Positions Taken by SCMA.

The SCMA has twice submitted written its views on this subject.  In 2012, SCMA publicly opposed proposed legislation that would have eroded mediation confidentiality.   More recently, SCMA submitted a carefully crafted statement to the Law Revision Commission opposing the effort to lift, dilute, or compromise mediation confidentiality to allow the disclosure of confidences revealed in mediations if a lawyer is being sued or disciplined for the alleged breach of a professional duty to his or her client.[4]

SCMA stated that candor and openness in mediation is just too important to be sacrificed because of what the Association’s experience demonstrates are only “rare, isolated, or unusual” claims of lawyer misconduct in mediation.  But recognizing that the Law Revision Commission has decided (at least tentatively) to recommend that the Legislature allow judges and juries to be given access to confidential mediation communications where they are relevant to claims of lawyer misconduct, SCMA urged the Law Revision Commission to recommend meaningful procedural protections against unnecessary public disclosure of private information and confidences revealed in the mediation process.

As stated in SCMA President Floyd Siegal’s letter to the Law Revision Commission:

“To the extent that courts in California have allowed judicial scrutiny of events that occurred during mediation, they have done so only in very limited circumstances and applying special procedural safeguards . . . thereby maintaining the confidentiality of the mediation process. In the event the Commission decides to recommend an exception for confidentiality in cases alleging attorney malpractice, similar protections to those mandated in  Rinaker [ v. Superior Court (1998)]  should be a part of the law.”  clrc.ca.gov/pub/2015/MM15-55s1.pdf

But SCMA’s positions are not universally recognized either within the mediation community or within the larger community of mediation participants.  And SCMA’s  recommendations have, so far, found little support in the CLRC.

But the CLRC process is ongoing, with many issues remaining to be considered.  For example, the Commission has asked its staff to consider two other potential mechanisms to mitigate the effects of the Commission’s tentative proposals.   The first would require parties proposing to file malpractice cases in which confidential mediation communications might be revealed to first obtain a certificate or other determination from a lawyer certified as a legal malpractice specialist that the case has substantial merit. An alternative would be to require such a certification of merit from all lawyers who file malpractice cases in which it can be expected that confidential mediation communications would be offered into evidence.

What SCMA Members and Others Can Do to Have Their Views Considered By The Law Revision Commission.  

As this process proceeds, SCMA members – and others interested in the subject – may submit their personal views on both the importance of mediation confidentiality and the need for protections against unnecessary disclosure of confidential information revealed in mediations directly to the Law Revision Commission.   These comments may be directed to Barbara Gaal, Chief Deputy Counsel, California Law Revision Commission, either by mail, to 4000 Middlefield Road, Room D-2, Palo Alto, CA 94303; by fax, to 650-494-1335; or via email, to bgaal@clrc.ca.gov.

[1] Cassel v. Superior Court, 51 Cal. 4th 113, 244 P.3d 1080, 119 Cal. Rptr. 3d 437 (2011).

[2] This substantial body of material can be accessed on the Law Revision Commission website.   The web address isclrc.ca.gov/K402.html.

[3] Published at clrc.ca.gov-pub-2015-MM15-55.pdf (Exhibit 1).

[4] clrc.ca.gov/pub/2015/MM15-54s2.pdf.Mediation Confidentiality 1 (PDF)

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