Where we stand on mediation confidentiality, both in California since the Cassel decision and in the Ninth Circuit

Phyllis Pollack. Photograph by Jonah Light

Phyllis Pollack. Photograph by Jonah Light

During the past year, there have been two interesting developments regarding mediation confidentiality. The first occurred within the California Law Revision Commission (“CLRC”). The second occurred within the Ninth Circuit Court of Appeals.

The consequences of Cassel v. Superior Court

In 2011, the California Supreme Court decided Cassel v. Superior Court (2011) 51 Cal.4th 113, in which it held that the policy underlying mediation confidentiality trumps the ability of a party to a mediation to sue his attorney for alleged professional negligence occurring at the mediation. Mediation confidentiality covers all conversations that relate to the mediation − both pre-mediation and during the mediation − even if outside the presence of the mediator.

Specifically, the Court stated: We must apply the plain terms of the mediation confidentiality statutes to the facts of this case unless such a result would violate due process, or would lead to absurd results that clearly undermine the statutory purpose. No situation that extreme arises here. Hence, the statutes’ terms must govern, even though they may compromise petitioner’s ability to prove his claim of legal malpractice. (Id. at 51 Cal.4th at 119.)

Although this case was framed in the context of whether a client could sue his attorney for what occurred during the mediation, a careful reading of the decision reveals that the Supreme Court was addressing the issue much more broadly in terms of the absolute nature of mediation confidentiality barring admission in any subsequent proceeding of any discussion between any of the mediation participants. Any mediation-related discussions occurring “… for the purpose of, in the course of or pursuant to a mediation or mediation consultation…” are confidential. (Evid. Code, § 1119.) This means that two participants on the same side cannot later seek the assistance of a court to enforce their agreement to adjust their attorney-client fee agreement, or to adjust the proportionate share of liability among them as defendants, et cetera unless their agreement complies with the strict requirements for disclosure under California Evidence Code sections 1123 and/or 1118.

Assembly Bill 2025

In response to the Cassel decision, in early 2012, AB 2025 was introduced into the California Legislature to amend California Evidence Code Section 1120 by adding subsection (4) to subpart (b). As originally drafted and introduced into the California State Assembly, this new subpart provided that mediation confidentiality would not preclude the admissibility in an action for legal malpractice, an action for breach of fiduciary duty or both, or in a State Bar proceeding of: … communications directly between the client and his or her attorney during mediation if professional negligence or misconduct forms the basis of the client’s allegations against the attorney. (AB 2025, February 23, 2012.)

In short, mediation confidentiality would not provide a shield to an attorney in a legal malpractice action, State Bar proceeding or disciplinary action where his/her alleged misfeasance or malfeasance arose during the mediation.

Referral to the California Law Revision Commission

There was so much opposition to this bill that it was amended on May 10, 2012, to provide that the whole matter be referred to the California Law Revision Commission for study, review, and recommendations. Specifically, the Legislature requested that the Commission: …(a) … shall study and report to the Legislature regarding the relationship under current law between mediation confidentiality and attorney malpractice and other misconduct, and the purposes for, and impact of, those laws on public protection, professional ethics, attorney discipline, client rights, the willingness of parties to participate in voluntary and mandatory mediation and the effectiveness of mediation, as well as any other issues that the commission deems relevant. Among other matters, the commission shall consider Sections 703.5, 958, and 1119 of the Evidence Code and predecessor provisions, as well as California court rulings, including, but not limited to, Cassel v. Superior Court (2011) 51 Cal.4th 113; Porter v. Wyner (2010) 183 Cal.App.4th 949, and Wimsatt v. Superior Court (2007) 152 Cal.App.4th 137. (b) The commission shall also consider and report on the availability and propriety of contractual waivers. In conducting its analysis, the commission shall consider the law in other jurisdictions, including the Uniform Mediation Act as it has been adopted in other states, other statutory acts, scholarly commentary, judicial decisions, and any data regarding the impact of differing confidentiality rules on the use of mediation. (c) The commission shall request input from experts and interested parties including, but not limited to, representatives from the California Supreme Court, the State Bar of California, legal malpractice defense counsel, other attorney groups and individuals, mediators, and mediation trade associations. The commission shall make any recommendations that it deems appropriate for the revision of California law to balance the competing public interests between confidentiality and accountability.

(AB 2025, Amended in Assembly May 10, 2012.)

Consequently, in early 2013, the CLRC began its study on the “Relationship between Mediation Confidentiality and Attorney Malpractice and Other Misconduct — Study K-402” (http://www.clrc.ca.gov