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general / Alternative Dispute Resolution

What you need to know about mediation confidentiality

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As a civil litigator, you most likely participate in mediation from time to time. You probably have a general notion that the mediation process is "confidential"; that what you or your client say in mediation stays in mediation.

While it is true that mediation communication is generally confidential, there are some tricky issues in this area. It is not always as straightforward as you might think.

The Source of "Confidentiality"

Understanding mediation confidentiality starts with identifying the source of confidentiality. There are actually three potential sources: (1) ethical guidelines; (2) state and federal laws and rules; and (3) agreements between the participants.

As for ethical guidelines, California mediators are not licensed or regulated like other professionals, such as attorneys or CPAs. Mediators are therefore not subject to binding ethical standards. However, there are model standards -- such as the American Bar Association's Model Standards of Conduct for Mediators -- that most mediators follow. These include confidentiality requirements. And as a practical matter, no mediator could survive in the field without respecting basic ethical norms including those with respect to confidentiality. Just know you cannot rely on ethical guidelines alone to preserve confidentiality.

The main source of confidentiality at mediation is statutory law. In California state court proceedings, confidentiality is enforced through several sections of the California Evidence Code. The main rule is contained in Section 1119. In the federal system, confidentiality is enforced through Rule 408 of the Federal Rules of Evidence. You should be aware that there is no established common law "mediation privilege," similar to the attorney-client privilege. The law protecting confidentiality is exclusively statutory.

The third and final potential source of confidentiality is the agreement. It is quite common for participants in mediation to sign a confidentiality agreement before the mediation commences. Many times, the mediator will provide a standard form. While the terms of these agreements are often redundant with the other confidentiality rules, in some instances the scope of confidentiality is expanded or modified.

The Meaning of "Confidential"

Webster's Dictionary defines "confidential" to mean "private, secret." In the context of mediation, however, confidential rarely means private.

There is no statutory definition of the term "confidential." In fact, the term appears only once in the mediation confidentiality sections. See Evid. Code Section 1119(c) ("All communications, negotiations, or settlement offers by and between participants in the course of a mediation or mediation consultation must remain confidential.") While there is no statutory definition, the term is actually fairly well defined. The term is essentially short hand for the set of specific rules that limit the use of mediation communication. To understand the term, you need to know the rules.

Internal vs. External Confidentiality

It is helpful to distinguish between two different types of communication.

On the one hand there are statements that a participant makes to the mediator in confidence, such as in private caucus. The intention is that these statements remain private. On the other hand, there are statements shared with other parties. These statements could potentially be used by the other side outside of mediation. The distinction between the two can be important.

While virtually all communication at mediation is inadmissible, only internal communication is truly private. This is because, while mediators are bound by ethical obligations to keep private communication private (backed by evidentiary rules that prevent the discovery of such communication), there is no rule that prevents participants from using information shared at mediation for other purposes, such as to prepare the case for trial or to drive additional investigation or discovery. While another party cannot admit a mediation statement into evidence, it certainly can use the statement for its benefit. In that sense, party-to-party communication at mediation is not "private" at all.

For example, if I tell the mediator (who tells the other side) that I have retained a materials expert named John Smith who microscopically analyzed a product and found a specific defect, my statement will never be admitted into evidence. However, the other side now knows: (a) I've retained a materials expert named John Smith; (b) who has microscopically analyzed the product; and (c) who has found a specific defect. The other side can use this information to: (a) hire its own materials expert; (b) request its own microscopic analysis; and/or (c) start doing background research on my expert to prepare for deposition or trial.

The Major Rules

As stated above, in California state proceedings, mediation confidentiality is enforced through evidentiary rules of exclusion.

Mediator Cannot Testify

Section 703.5 of the California Evidence Code disqualifies a mediator from testifying as a witness regarding any "statement" or "conduct" occurring "at or in conjunction with the mediation." Absent a waiver, a mediator cannot, for example, be compelled to testify about what he or she witnessed or heard at mediation.

Nothing Said Is Admissible

"No evidence of anything said or any admission made for the purpose of, in the course of, or pursuant to, a mediation or mediation consultation is admissible or subject to discovery." Evid. Code Section 1119(a).

Nothing Written Is Admissible

"No writing ... that is prepared for the purpose of, in the course of, or pursuant to, a mediation or mediation consultation, is admissible or subject to discovery." Evid. Code Section 1119(b).

All Communication Is "Confidential"

"All communications, negotiations, or settlement offers by and between participants in the course of a mediation or mediation consultation must remain confidential." Evid. Code Section 1119(c).

No Mediator Report

A mediator's report, opinion, recommendation, or finding about what occurred in a mediation may not be submitted to or considered by a court or another adjudicative body. Evid. Code Section 1121.

No Settlement Communication Admissible to Prove Liability

Also, Evidence Code Section 1152(a) excludes evidence of settlement offers and "any conduct or statements made in negotiation thereof" to prove liability against the offering party. This rule is not limited to the mediation context.

Federal Rule

In the federal system, there are no mediation-specific rules. Instead, confidentiality is provided through Rule 408 of the Federal Rules of Evidence. That rule deems inadmissible "a statement made during compromise negotiations" offered "to prove or disprove the validity or amount of a disputed claim or to impeach by a prior inconsistent statement or a contradiction." The rule is similar to California Evidence Code Section 1152. Notice the limitations. It does not ban discovery of mediation communication. It does not even exclude such evidence in all circumstances; only when offered for certain purposes. In fact, Rule 408(b) expressly allows for the admission of settlement communication if offered for a reason other than those identified in Rule 408(a). Examples include when the evidence is offered to prove bias or prejudice on the part of a witness or to prove an alleged wrong committed during the negotiations.

Communication Outside of Mediation

What about communication outside of mediation? For example, if I send an email to the mediator before the mediation to educate the mediator about the facts of the case, is that communication confidential? What if I send a follow up email to the mediator after the fact? What if I send communication to the other party's attorney before or after mediation?

Evidence Code Section 1119 renders inadmissible anything said "for the purpose of, in the course of, or pursuant to" a mediation. This is an extremely broad rule. Virtually anything communicated to the mediator or another party related to mediation is covered.

As for pre-mediation correspondence between parties or a party and the mediator, if related to the mediation, such communication would likely qualify as confidential.

Regarding post-mediation correspondence, the analysis is a little different. That is because there is a specific statute that addresses confidentiality following mediation. For purposes of confidentiality, a mediation ends: (1) when the parties execute a written settlement agreement that fully resolves the dispute; (2) the parties reach an appropriately recorded oral agreement that fully resolves the dispute; (3) the mediator provides the participants written notice that the mediation is terminated; or (4) a party provides the mediator and other participants a written notice that the mediation is terminated (mediation confidentiality continues as to other parties absent some other terminating event). Evid. Code Section 1125(a)(1)-(4). If none of those affirmative acts occur, confidentiality continues until "for 10 calendar days, there is no communication between the mediator and any of the parties to the mediation relating to the dispute." Evid. Code Section 1125(a)(5).

Note that Evidence Code Section 1125 addresses confidentiality only as to mediation communication and only in a temporal sense (i.e., it extends "the mediation" for 10 days without regard to the substance of any communication). This can be confusing. For example, does Section 1125 protect all communication within 10 days of mediation, regardless of the nature of the communication? If so, that would be an odd rule. On the other hand, does Section 1125 eliminate confidentiality that might otherwise apply just because the communication occurred more than 10 days after mediation? For example, if I communicate with opposing counsel a couple weeks after mediation about the mediation, shouldn't that be protected as communication "pursuant to mediation" under Section 1119? These issues may eventually have to be clarified by the appellate courts.

Recall that California Evidence Code Section 1152 excludes evidence of "any conduct or statements made in negotiation" of settlement to prove liability against a party. Thus, even if not covered by mediation confidentiality (because the mediation has "ended" per Section 1125), a statement made after mediation might still be protected under Section 1152.

As for the federal system, again, there is no mediation-specific confidentiality rule. In that sense, confidentiality is not dependent on a connection to mediation. Whether a statement is protected will depend on whether it was made "during compromise negotiations," and the purpose for which admission is sought. See Federal Rules of Evidence, Rule 408.

Otherwise Admissible Evidence

Under California law, "evidence otherwise admissible or subject to discovery outside of mediation or a mediation consultation shall not be or become inadmissible or protected from disclosure solely by reason of its introduction or use in a mediation or a mediation consultation." Evid. Code Section 1120. Thus, if certain evidence is discoverable and/or admissible, the fact that it was divulged or exchanged at mediation will have no effect on the other party's ability to access that evidence through discovery and/or to have it admitted at trial.

Examples abound.

• Plaintiff shares photos of the accident scene with the defendant.

• The defense attorney provides the plaintiff a copy of his expert's report.

• A party shares test data collected by a consultant or expert.

• A party produces a recorded witness statement that has not been previously produced.

Unless such evidence was generated and prepared exclusively for mediation, it will not be protected by mediation confidentiality even if exchanged only at mediation. One cannot cloak otherwise admissible evidence with confidentiality protection just by exchanging it at mediation.

Settlement Agreements

To enforce a settlement agreement reached at mediation, you will need to make sure the settlement agreement is admissible. To accomplish this, the parties must waive confidentiality. This requires strict compliance with Evidence Code Section 1123. Among other things, you need an agreement in writing, signed by the parties or the parties' agents. Id. This should be done at the mediation. If you don't waive confidentiality, you might have a perfectly valid settlement agreement that you simply cannot enforce.

Other Communication Related to Mediation

Mediation confidentiality is not limited to communication between a participant and the mediator or one party and another. In fact, mediation confidentiality covers all communication "for the purpose of" mediation. This would include communication between a party and the party's attorney. It applies even when the communication occurs outside of the presence of the mediator, and even when offered into evidence at a later proceeding by the party involved in the communication.

For example, in Cassel v. Superior Court (Wasserman), 51 Cal. 4th 113 (2011), the plaintiff brought a legal malpractice action against his former attorneys based on bad settlement advice and tactics. The defendants moved in limine to exclude all evidence of communications between the attorneys and the client related to mediation in the underlying case, including discussions prior to the mediation and during the mediation outside the presence of the mediator. The California Supreme Court upheld the trial court's exclusion of these communications. Id. at 117-18. In doing so, the court stated: "The obvious purpose of the expanded language [of Section 1119(a)] is to ensure that the statutory protection extends beyond discussions carried out directly between the opposing parties to the dispute, or with the mediator, during the mediation proceedings themselves. All oral or written communications are covered if they are made 'for the purpose of' or 'pursuant to' a mediation. It follows that, absent an express statutory exception, all discussions conducted in preparation for a mediation, as well as all mediation-related communications that take place during the mediation itself, are protected from disclosure. Plainly, such communications include those between a mediation disputant and his or her own counsel, even if these do not occur in the presence of the mediator or other disputants." Id. at 128 (citations omitted).

The exclusion of attorney-client communication related to mediation has raised significant concerns. Among other things, the rule effectively immunizes counsel from malpractice claims based on mediation-related communication with the client (e.g., alleged bad advice, misrepresentations, duress, etc.). In response to these concerns, the California legislature passed Senate Bill 954. This new law, which becomes effective on Jan. 1, 2019, will require lawyers representing clients at mediation to advise the client that all communication between the lawyer and the client related to mediation is confidential and cannot be admitted into evidence even if the client later decides to sue the attorney for malpractice arising out of the attorney's mediation conduct. Note the new law does not in any way change mediation confidentiality. It simply adds a notification requirement.

Mandatory Settlement Conferences

You should also be aware that confidentiality does not cover communication related to mandatory settlement conferences. The Code expressly excludes mandatory settlement conferences from the mediation confidentiality provisions. Evid. Code Section 1117(b)(2). Recall, however, that Evidence Code Section 1152 makes statements in settlement negotiations inadmissible to prove liability. Federal Rule 408 contains similar protections. In addition, there are often local rules that address confidentiality in the context of court-run ADR programs. Just remember that settlement conferences are a different ball game.

Conclusion

As the California Supreme Court has recognized, "confidentiality is essential to effective mediation." Rojas v. Superior Court (Coffin), 33 Cal. 4th 407, 415 (2004). Given the court's strong endorsement of confidentiality, its broad application of the rules, and its insistence that any exceptions come from the legislature, it appears mediation confidentiality is on solid ground. There are, however, certain nuances and limitations to be aware of. "Confidential" typically does not mean "private." Internal communication is one major exception. Confidentiality often extends beyond communication made at the mediation. Otherwise discoverable and admissible evidence is not cloaked in confidentiality just because it is exchanged at mediation. The rules are different in state and federal proceedings. Mediation communication may be deemed admissible for a limited purpose. Confidentiality covers more than just communication with the mediator or the other side, but also between the lawyer and the client and others. If you understand the source and scope of mediation confidentiality, you will have the confidence to vigorously participate in mediation without worrying about making a mistake. This should greatly enhance your ability to achieve success.

#349

Ben Armistead


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