In many mediations, I have faced the dilemma in which one side provides crucial but confidential information to me in a separate session (i.e. caucus), admonishing me “not to tell the other side.” I sense that the information is extremely relevant and may make the difference in reaching a settlement. But, I know “my lips are sealed” unless I can convince that party to change her mind and either allow me to disclose the information or have her do so directly to the other side! Do I have any other options?

       This question was recently answered in ethics opinion SODR-2009-2 issued by the ABA Section of Dispute Resolution Committee on Mediator Ethical Guidance (“Committee”). The scenario posed was quite similar to the one described above:

      “I’ve been involved in two separate mediations where an employer has sued a former employee for the unauthorized taking and/or duplication of the employer’s sensitive electronic data shortly before the employee left his job with the employer. In the course of speaking with both employers in separate caucus, I’ve been advised, in a rather off-hand manner, that the employers have initiated some form of referral of the case for prosecution to the police/district attorney regarding the alleged unauthorized taking/duplication by the employee by the employer’s sensitive electronic data.”

      . . .

      “The dilemma for me, as a mediator, having been made privy to this very sensitive information, is what, if anything, I should say on this subject to the former employee and his counsel?. . .” (Id. at p. 1).

       As might be expected, the Committee responded by essentially stating, “not much.” Pursuant to Standard V(B) governing “Confidentiality” of  the Model Standards of Conduct for Mediators (2005), the Committee noted that the mediator is precluded from “directly or indirectly” (emphasis original) disclosing confidential caucus information either to the employee or his counsel without the consent of the employer. Thus, because of the prohibition against even “indirect” disclosure, the mediator is prohibited from conveying the information through a series of “reality testing” questions, that indirectly or impliedly suggest that criminal prosecution might be an issue. [eg: “Do you know whether your former employer has referred these types of cases to the police or prosecutor for possible criminal prosecution” (Id. at p. 6)]? Rather, the mediator may ask only very generalized “reality testing” questions such as, “if you do not settle this matter in mediation, what likely options exist for both you and the employer to resolve the issues arising from your departure from  your job?” Or: “What risks do you face if you do not settle this case?” (Id.).

       Of further concern to the mediator who requested this opinion was her “very strong sense of moral obligation to the employee to alert him to a very real risk of a possible forthcoming criminal prosecution. . .” (Id.). The mediator was concerned that the employee could not make a “free and informed choice. . . as to . . . outcome” without knowing all the facts, that is, the possible criminal prosecution.

       The Committee responded by noting that Standard I(A)(2) acknowledges that the “mediator cannot personally ensure that each party has made free and informed choices.” (Id. at  p. 7). If the party is represented by counsel, that obligation falls upon counsel. If the party is not represented by counsel, then Standard I(A)(2) advises the mediator to point out “the importance of consulting other professionals to help them make informed choices” and allows the mediator to postpone the mediation for that purpose. (Id.)

       Alternatively, the Committee noted that Standard VI (A)(4) governing the Quality of the Process encourages the mediator to “promote honesty and candor between and among all participants.” This allows the mediator to encourage the employer to reveal the referral for potential criminal prosecution either directly or through the mediator.

       In sum, the Committee concluded that caucus communications remain confidential unless the Model Standards provide otherwise. Where the mediator is concerned that the other party is not making an informed decision due to the lack of crucial but confidential information, the only technique the mediator may use is very generalized “reality testing” questions and hope that the party’s counsel  has been astute enough to pick up on and review all the issues with her client.

       . . . Just something to think about.

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       Ah! Attorney’s Fees. Where would the litigated case be without them. To a plaintiff, the ideal situation is one in which defendant pays the fees of plaintiff’s counsel, either as a result of a fee-shifting statute or a contingency fee agreement.
     

        But, such an arrangement poses a quandary for the mediator who is trying to settle the case and is having difficulty doing so because plaintiff’s attorneys fees are getting in the way. To pose the issue more succinctly, consider the following inquiry:

      “ “The mediation has reached an impasse over the settlement amount. The mediator asks counsel (outside the presence of his client) if counsel can modify/reduce the fees owed to him by the client in order to bridge a small gap between the parties’ settlement amounts. Counsel refuses and said the mediator is being unethical in making such a request. Is the mediator’s question unethical?” ” ( SODR 2009-1 at p. 1.)

         In its opinion SODR 2009-1, the ABA Section of Dispute Resolution Committee on Mediator Ethical Guidance answered the question in the negative:

      “The mediator did not act unethically in suggesting to counsel – outside the presence of his client – that he could consider offering his client a fee reduction in order to reach a settlement at the mediation. However, the mediator must be sensitive when handling this delicate subject, which, if mishandled, may create tension between client and counsel and potentially jeopardize the mediation.” (Id.)

        Citing Standards I and II (involving self-determination and impartiality, respectively) of the Model Standards of Conduct for Mediators, the committee noted that the attorney, while not an actual party to the dispute, is a “participant” in the mediation. Thus, counsel’s interests are an issue that must be considered in any attempt to resolve the matter. While a mediator cannot coerce either a party or her counsel to accept a settlement since mediations are to be guided by self-determination of the participants, the mediator, being sensitive to the potential risk of creating a conflict between plaintiff and counsel, can raise the issue – using caution – to counsel alone. By raising it diplomatically and separately with counsel, the mediator also preserves the quality of the process, another standard to which mediators must adhere.
 

      This issue continues to surface and resurface in many informal discussions with and among my colleagues, and many mediators have expressed their view that they shy away from raising the issue altogether. I, too, hesitate to raise the issue as I do not want to create a conflict or drive a wedge between the attorney and her client.

       But, according to this opinion, I, and my colleagues, need not be so shy. We just need to raise it cautiously, diplomatically and out of earshot of the plaintiff.

       So. . . if a mediator should raise the issue with you, don’t think her unethical. She is simply doing her job. . . trying to help the parties reach a settlement, using the principles of self-determination, impartiality and preserving the quality of the process, as tools in her toolbox.

       . . .Just something to think about.