What Happens in Mediation, Stays in Mediation

Mediation can be stressful enough for clients. A new law adds to that stress by requiring California lawyers to advise their clients they have very little recourse in the event the lawyer commits malpractice at the mediation.

Background

California law provides that all communications, statements, and writings made by all participants to mediation – before, during, and even after the mediation – are confidential and generally inadmissible in any noncriminal proceeding. (Evidence Code §§ 1119 et seq.) The reason is simple and sound: by making the mediation process completely confidential, the parties are more likely to have a frank exchange about their case which, in turn, will result in more settlements and less litigation.

In 2011, the California Supreme Court interpreted the relevant statutes to include all statements made by an attorney to his or her own client, even if the client has sued the attorney for malpractice arising from the mediation. (Cassel v. Superior Court (2011) 51 Cal.4th 113.) In other words, if a client alleges her attorney committed malpractice (or even fraud) in conjunction with a mediation (for example, by coercing the client into a settlement that is not in her best interest, or by intentionally or negligently misrepresenting the material terms of the settlement), the client cannot introduce the evidence she would need (her conversations with her attorney at mediation) to prove her case at a civil trial for damages. The Court made a point to note it was merely interpreting the very broad language in the statutes (which apply to all statements and writings made by all “participants” to the mediation) and that only the Legislature has the ability to create an exception or otherwise change the law.

New Law

The Legislature passed Senate Bill 954 in late 2018. But rather than create an exception allowing clients to introduce evidence of their attorney’s alleged malpractice at mediation, Senate Bill 954 requires attorneys to send their clients a pre-mediation disclosure that the clients must sign and return. This disclosure must state, among other things, that “all communications between you and your attorney made in preparation for a mediation, or during a mediation, are confidential and cannot be disclosed or used (except in extremely limited circumstances), even if you later decide to sue your attorney for malpractice because of something that happens during the mediation.”

While transparency is a good thing, this mandatory disclosure may cause confusion and anxiety for clients, perhaps even causing some to avoid mediation altogether.