Dramatic Changes Coming for Mediation Confidentiality
The law of Alternative Dispute Resolution hasn’t moved too much over the last few years, but that may change this year. Currently there is a bill working its way through the California Legislature that would dramatically alter the protections of confidentiality in mediation and would apply across the board – to all types of mediation, including mediation of civil litigation matters and family law matters. As such, it is important that all members of the bar keep abreast of this potential legislation.
The proposed legislation would amend and add sections to the Evidence Code to create a new exception to mediation confidentiality in cases where any participant in a mediation later alleges misconduct by an attorney or even disputes their attorney’s bill.
This new exception would apply to evidence “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.” (Proposed Evid. Code Section 1120.5(a)(1)) It would apply in a) disciplinary proceedings against the lawyer; b) a cause of action (in court or arbitration) against the lawyer for malpractice; c) a fee dispute between a lawyer and client (Proposed Evid. Code Section 1120.5 (a). It would allow the introduction of writings and communications previously protected by mediation confidentiality, even if those communications and writings belonged to or were made by parties other than the accused attorney and their client.
Although the legislation states that it does not apply to communications or writings of the mediator, and that the mediator shall not be competent to testify or produce evidence, closer examination of the wording of the language reveals that this is not entirely true. The proposed legislation creates an exception to mediation confidentiality not just for actions at law, but also for disciplinary actions and for fee disputes (Proposed Evid. Code 1120.5(a)(2)(A) and (C )), and that exception applies not only to the parties and their communications and writings, but to the mediator’s communications and writings as well. Proposed Evid. Code Section 1120.5(e):
“No mediator shall be competent to provide evidence pursuant to this section, through oral or written testimony, production of documents, or otherwise, as to any statement, conduct, decision, or ruling, occurring at or in conjunction with a mediation that the mediator conducted, except as to a statement or conduct that could (i) give rise to civil or criminal contempt, (ii) constitute a crime, (iii) be the subject of investigation by the State Bar or Commission on Judicial Performance, or (iv) give rise to disqualification proceedings under paragraph (1) or (6) of subdivision (a) of Section 170.1 of the Code of Civil Procedure.” (emphasis added)
This means that under this legislation, mediators could be deemed competent to testify and forced to produce evidence at disciplinary hearings conducted by the State Bar.
In June, 2017, the California Law Revision Commission again asked for public comment on this bill. Pursuant to that request, numerous stakeholder organizations with direct experience in mediation wrote in opposition (or had already done so earlier in the process of the bill’s creation) either opposing the specific wording of the proposed legislation or opposing the weakening of mediation confidentiality in general. Indeed, the staff noted that “reaction to the proposal was decidedly negative.” Opposition included both the Consumer Attorneys of California and the California Defense Council that took the unusual step of submitting a joint letter of opposition; the Judicial Council of California; and the Contra Costa County Bar Association, that wrote in opposition to weakening mediation confidentiality. http://www.clrc.ca.gov/pub/2017/MM17-52.pdf.
Reasons for opposition focused primarily on the chilling effect that the proposed legislation would create and the resulting effects on settlement agreements, mediators and the increased burden on the courts, among others. http://www.clrc.ca.gov/pub/2017/MM17-52.pdf (pages 16-27). The California Judges Association noted specifically that creating the exception would essentially require mediators to explain to participants that “whatever they or their lawyers say in the process of mediation is no longer confidential…” (California Judges Association Statement of Opposition, http://www.clrc.ca.gov/pub/2017/MM17-52.pdf (page 22-23).) Additionally, opposition pointed out that other parties could trigger disclosure of someone else’s previously-confidential materials simply by alleging misconduct against their own attorney, causing risk of disclosure of the materials or creating great cost to these third parties who would then have to seek – and pay for – protective measures against disclosure. http://www.clrc.ca.gov/pub/2017/MM17-52.pdf (pages 16-17)
In contrast to the numerous organizations writing in opposition to the proposed legislation, support was offered by one organization – the Conference of California Bar Associations, the organization that supported the initial creation of the study that lead to the proposed legislation (http://www.clrc.ca.gov/pub/2017/MM17-52.pdf (footnote 19)); as well as 10 individuals who wrote in to support the proposed bill, focusing primarily on the need for parties alleging attorney malpractice – or attorneys being accused of malpractice – in mediation to be able to submit evidence in support of their claim or defense. http://www.clrc.ca.gov/pub/2017/MM17-52.pdf (pages 27- 33).
Despite the overwhelming opposition to the proposed legislation, on December 1, 2017, the Commission voted to submit the bill in the 2018 session. Because this would affect practitioners in almost every practice area, all attorneys should be watching this bill closely to determine whether mediation confidentiality will remain untouched.
In order to stay fully informed, a full copy of the statements written in support and opposition to the proposed legislation (including the two referenced above) can be found here: http://www.clrc.ca.gov/pub/2017/MM17-51.pdf. A copy of staff memorandum 2017-52 “Relationship Between Mediation Confidentiality and Attorney Malpractice and Other Misconduct (Analysis of Comments on Tentative Recommendation)” can be found here: http://www.clrc.ca.gov/pub/2017/MM17-52.pdf. Finally, a complete copy of the commission’s report and the proposed legislation (which begins on page 145 of the document) may be found here: http://www.clrc.ca.gov/pub/Printed-Reports/RECpp-K402.pdf.
Additionally, the ADR Section Board provides updates on the issue of mediation confidentiality to those who sign up for the email updates. If you would like to be included on this list, please apply to Nancy Powers at PowersLaw@aol.com.
If, after reviewing the proposed legislation, you would like to voice your opinion, please write to the Chairs of the California Senate and Assembly Judiciary Committees (must be mailed or faxed) so that you may be heard before the bill is considered by the Legislature.
*This article could not have been written without the input and insights of Ron Kelly, Nancy Powers and Tracy Lindsey.