Confusion of Terminology Is to Blame for the Mediation Confidentiality Debate in California

Posted By Mark Baer || 24-Oct-2015

On January 13, 2011, in Michael Cassel v. The Superior Court of Los Angeles County, the California Supreme Court held that mediation confidentiality prevents the admissibility of evidence relevant to a legal malpractice claim if that evidence involves attorney-client communications "for the purpose of, in the course of, or pursuant to" mediation.

Since that time, there has been a huge effort within the legal community to eliminate the mediation confidentiality protections, particularly when they effectively shield a lawyer from an otherwise legitimate legal malpractice claim. The expressed reasons behind such efforts were clearly stated in the following concurring opinion by Justice Chin in that case:

"I concur in the result, but reluctantly.

The court holds today that private communications between an attorney and a client related to mediation remain confidential even in a lawsuit between the two. This holding will 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. Attorneys participating in mediation will not be held accountable for any incompetent or fraudulent actions during that mediation unless the actions are so extreme as to engender a criminal prosecution against the attorney. (See maj. opn., ante, at p. 135, fn. 11.) This is a high price to pay to preserve total confidentiality in the mediation process.

I emphasize that I am not suggesting there was any malpractice or deception in this case. The merits of the underlying lawsuit are not before us and, after today's ruling, might never come before any court. I am speaking in general.

I greatly sympathize with the Court of Appeal majority's attempt to interpret the statutory language as not mandating confidentiality in this situation. But, for the reasons the present majority gives, I do not believe the attempt quite succeeds.

Moreover, although we may sometimes depart from literal statutory language if a literal interpretation 'would result in absurd consequences that the Legislature did not intend' ( In re Michele D. (2002) 29 Cal.4th 600, 606 [128 Cal.Rptr.2nd 92, 59 P.3d 164]), 1 believe, just barely, that the result here does not so qualify. Plausible policies support a literal interpretation. Unlike the attorney-client privilege — which the client alone holds and may waive (Evid. Code, §§ 953, 954) — mediation confidentiality implicates interests beyond those of the client. Other participants in the mediation also have an interest in confidentiality. This interest may extend to private communications between the attorney and the client because those communications themselves will often disclose what others have said during the mediation. Additionally, as the majority notes, it might 'not be fair to allow a client to support a malpractice claim with excerpts from private discussions with counsel concerning the mediation, while barring the attorneys from placing such discussions in context by citing communications within the mediation proceedings themselves.' (Maj. opn., ante, at p. 136.)

Accordingly, I agree with the majority that we have to give effect to the literal statutory language. But I am not completely satisfied that the Legislature has fully considered whether attorneys should be shielded from accountability in this way. There may be better ways to balance the competing interests than simply providing that an attorney's statements during mediation may never be disclosed. For example, it may be appropriate to provide that communications during mediation may be used in a malpractice action between an attorney and a client to the extent they are relevant to that action, but they may not be used by anyone for any other purpose. Such a provision might sufficiently protect other participants in the mediation and also make attorneys accountable for their actions. But this court cannot so hold in the guise of interpreting statutes that contain no such provision. As the majority notes, the Legislature remains free to reconsider this question. It may well wish to do so.

This case does not present the question of what happens if every participant in the mediation except the attorney waives confidentiality. Could the attorney even then prevent disclosure so as to be immune from a malpractice action? I can imagine no valid policy reason for the Legislature to shield attorneys even in that situation. I doubt greatly that one of the Legislature's purposes in mandating confidentiality was to permit attorneys to commit malpractice without accountability. Interpreting the statute to require confidentiality even when everyone but the attorney has waived it might well result in absurd consequences that the Legislature did not intend. That question will have to await another case. But the Legislature might also want to consider this point."

The situation has come to a head more recently because of proposed legislation on the issue from the California Law Revision Commission. As stated by the Commission, the "Key Policy Decision" is as follows:

"By restricting the a vailability of evidence, California's mediation confidentiality statutes may on occasion impede the pursuit of justice in a particular case. To some, that is an unacceptable result. To others, that is a regrettable cost of serving a broader societal goal: promoting effective mediation and its beneficial consequences by allowing mediation participants to communicate freely with assurance of privacy."

I understand and appreciate the concern raised by Justice Chin and the alleged reasons behind the effort to prevent mediation confidentiality from being used as an effective shield to protect lawyers from otherwise legitimate legal malpractice claims. However, at the same time, I wholeheartedly oppose any changes to mediation confidentiality. In fact, on September 23, 2015, I sent the following email to the State Bar of California:

"The State Bar of California has no business regulating mediation because mediation is not limited to legal disputes and not all mediators are attorneys. Since the Bar cannot regulate non-lawyer mediators, the Bar's efforts are absurd and produce an unfair advantage to non-lawyer mediators.

I completely agree with Phyllis G. Pollack (http://www.mediate.com/articles/PollackPbl20150918.cfm) and Ron Kelly and many others who take serious issue with the Bar's efforts. As Mr. Kelly has said, mediation confidentiality is an essential aspect of mediation. The proposed legislation will remove current protections whenever a mediation party ALLEGES misconduct by their lawyer advocate or lawyer mediator. Again, note, the Bar can only apply such regulations on LAWYER mediators, which is completely outrageous. Furthermore, people should not be able to breach the mediation confidentiality merely by making an ALLEGATION."

I am pleased to learn that my email was included in the materials that the "Commissioners and other interested persons" were to consider because my comments "seemed particularly pertinent to matters discussed in it."

In an email sent on October 13, 2015, Ron Kelly's "quick summary" of the status of the Commissions' efforts was as follows:

"A. Firm decision to proceed with drafting legislation to remove current confidentiality protections when lawyer advocate misconduct is alleged.

B. Reversed earlier decision to also allow in mediation communications when attorney mediator misconduct is alleged."

Ultimately, it seems to me that the concern about mediation confidentiality is legitimate ONLY because "evaluative mediation" is considered mediation in California.

"Evaluative mediation is virtually identical to settlement conferences presided over by judges. The mediator helps the parties resolve their disputes by 'judging' the legal strengths and weaknesses of each party's case. Thus, the mediator focuses on each of the parties' rights under the law. The mediator assists the parties in evaluating the case and analyzing the costs and benefits of reaching a mediated agreement at that time versus a judicial ruling at a later date. This model of mediation clearly requires the mediator to be involved in the outcome. For the mediator to be effective in this type of mediation, both parties (and their respective counsel, if represented) must perceive the mediator as having a great deal of knowledge and understanding of the law involved in their particular case."

On August 31, 2015, the Los Angeles Daily Journal published an article by A. Marco Turk titled "Plan will force us to desert mediation," which stated in pertinent part as follows:

"The California Law Revision Commission wants to amend state law to pierce the veil of mediation confidentiality in cases where there is an allegation of legal malpractice or misconduct by a lawyer-mediator....

The situation is serious. A movement has been afoot since 2012 to repeal in their entirety Sections 1115-1128 of the California Evidence Code, which would completely eliminate the concept of confidentiality in mediation. If that happens, the motivation for this alternative dispute resolution process will also be removed. Thus, disputing parties who want to avoid trial will once again be relegated to the traditional settlement conference.... Let's not lose sight of the fact that under Evidence Code Section 1117(b)(2), 'a court settlement conference is not mediation."

Mind you, the Maryland State Bar states as follows:

"'Evaluative Mediation' is not defined here because we believe it is a misnomer. Evaluation is a technique, not a mediation framework. If a process consists solely of an evaluation and attempts to get participants to settle in line with the evaluation, then that process is not mediation, it is more likely a settlement conference. In a survey asking Maryland mediators how they define their practice, no mediator responded that they define their practice with the term 'Evaluative.'

2) A Settlement Conference is not mediation, although the two are often confused. We define settlement conferences here in order to try to clarify the distinction. Settlement conferences are ordered by the courts in a wide range of civil cases and attendance is mandatory. The conferences usually take place 30-days prior to trial.

Settlement conference neutrals are judges or lawyers who are familiar with the decisions of the particular court in which the case is filed. The conferences are focused on settling the lawsuit. The neutrals discuss with the participants the value range of their case and attempt to get the participants to reach an agreement, which may be a compromise. The conferences usually operate with attorneys present, and the entire process may consist of the neutral meeting solely with the attorneys. The process may take place in separate meetings with each side, as the neutral uses persuasive arguments, and attempts to encourage the parties to come to an agreement within a range of settlement options."

In Ireland, they have addressed the confusion caused because "multiple meanings co-exist for many ADR terms" in the following Report: "Alternative Dispute Resolution: Mediation and Conciliation." The Report states in pertinent part as follows:

"The terms mediation and conciliation continue to be used interchangeably in this jurisdiction and the difference between conciliation and mediation is not very clear. As noted by Dowling Hussey: 'the conflicting and contradictory definitions which are used in these two distinct areas tend to create some degree of uncertainty as to what precisely is meant by the phrase. Logic would suggest that both users and practitioners are less likely to make use of, or recommend, something that they do not fully understand because of such confusion.' …

In its Consultation Paper, the Commission provisionally recommended that when provision for mediation is made in legislative form, it should be defined as -a facilitative, consensual and confidential process, in which parties to the dispute select a neutral and independent third party to assist them in reaching a mutually acceptable negotiated agreement. In contrast, the Commission provisionally recommended that when provision for conciliation is made in legislative form, it should be defined as -an advisory, consensual and confidential process, in which parties to the dispute select a neutral and independent third party to assist them in reaching a mutually acceptable negotiated agreement. It is evident from the Commission's provisional recommendations that the fundamental difference between mediation and conciliation is the degree of involvement by the neutral and independent third party in the respective processes. While both processes incorporate the principle of self-determination and are non-determinative processes, conciliation allows the third party (the conciliator) to advise on substantive matters through the issuing of formal recommendations and settlement proposals. In contrast, mediation requires that the third party (the mediator) address process issues only and facilitate the parties in reaching a mutually acceptable negotiated agreement….

Another important distinguishing feature between mediation and conciliation can be found in an analysis between a rights based approached to resolving a dispute and an interested based approach to resolving a dispute. As the Commission noted in its Consultation Paper, interest-based dispute resolution processes expand the discussion beyond the parties' legal rights to look at the underlying interests of the parties, they also address parties' emotions and seek creative solutions to the resolution of the dispute. The focus of these processes is on clarifying the parties' real motivations or underlying interests in the dispute with the aim of reaching a mutually acceptable compromise which meets the real interests of both parties. It is generally accepted that mediation is a purely interest-based dispute resolution process. However, in conciliation, there can be a greater focus on the legal rights on the parties as opposed to their underlying interests. For example, clause 13.1.8 of the Irish Government's Public Work contracts states that where the parties cannot reach an agreement within 42 days after the conciliator is appointed the conciliator is to provide a written recommendation to both parties. Clause 13.1.8 adds that any such recommendation shall be based on the parties' rights and obligations under the Contract. The Commission notes that not all agreements reached through conciliation are based solely on the legal rights of the parties and that the underlying interests of the parties may also be taken into consideration by the conciliator when issuing a recommendation.

It is evident that there exists a fundamental procedural difference between the role of the conciliator and that of a mediator. The conciliator is a more active intervener, and may have an advisory role on the content and the outcome of a dispute. A conciliator may make suggestions, give expert advice and use intervention techniques that not only actively influence the likely terms of an agreement, but also encourage all parties to settle. A mediator on the other hand generally assist the parties to communicate with each other so that they can identify, clarify and explore the issues in dispute before they consider their options to reach a mutually acceptable negotiated agreement. The Commission considers that is an important distinction between mediation and conciliation and that this should be clearly and consistently reflected in any provision for mediation and conciliation in legislative form.

The Commission recommends that mediation and conciliation should be clearly and consistently separately defined in legislative form."

Unfortunately, in California, the legal community believes that "Evaluative Mediation" is Mediation, which lends itself to many of the problems we are experiencing. You see, non-lawyer mediators can't be 'evaluative' and the legal community in California doesn't tend to consider non-lawyer mediators because the legal community doesn't understand mediation. Furthermore, since most 'evaluative mediators' are retired judicial officers and since 'evaluative mediation' is really a 'settlement conference,' why not just call it a 'settlement conference' and solve the problem? In other words, as Victoria Pynchon said, "if you don't like mediation confidentiality, hold a settlement conference instead." This is especially true, if what the lawyers are calling mediation is really nothing more than a "settlement conference."

I therefore propose that "evaluative mediation" no longer be called mediation in California. The mediation community, in my opinion, would not be as up in arms over the erosion of mediation confidentiality, if it applied only to "evaluative mediation," which really isn't mediation at all.

That being said, when I used the terms "mediator" and "mediation" in my September 23, 2015 email to the State Bar of California, I was referring to "mediators" and "mediation," as defined by me. Since I don't consider "evaluative mediators" to be mediators and since I don't consider "evaluative mediation" to be mediation, my position as set forth in that email does not apply to "evaluative mediators" or "evaluative mediation."

In fact, I firmly believe that lawyers participating in "evaluative mediation" should not be able to use mediation confidentiality to shield themselves from legal malpractice because "evaluative mediation" is merely "an alternative form of litigation," or "soft-arbitration." Lawyers should therefore receive no more protection against legal malpractice claims for advice given in such a process than they do if they had given that same advice in arbitration or litigation.

By the same token, "evaluative mediators" are evaluating legal positions and influencing the parties' decision making based upon such evaluations. Thus, "evaluative mediators" most certainly should be subject to liability for influencing people to resolve their cases in accordance with a legal evaluation that is incorrect. I also don't believe that retired judicial officers acting as "evaluative mediators" should be entitled to any more immunity from liability because they happen to be retired judicial officers than lawyers acting as an "evaluative mediator" would have.

If we stopped creating confusion by using the same terms to mean very different things, we would be able to resolve the very real problems resulting from mediation confidentiality, and without altering that confidentiality at all. As outrageous as it may seem, I am very clearly stating that we should "call a spade a spade" and that by doing so, we solve the problem.