Sunday, April 11, 2010

Mediation Confidentiality Does Not Shield Attorney Malpractice.

On Thursday, the California Second District Court of Appeal decided Porter v. Wyner, reversing a ruling that a new trial was required in a dispute between lawyer and client, because the original trial had included testimony about attorney-client communications in the context of a mediation.  This opinion seems to go further than the Cassel case,  in which attorney-client communications outside the presence of the mediator or the opposing party were held unprotected by mediation confidentiality.  The Porter court held that even though attorney-client communications might occur during or as part of the mediation process, they are not considered to have taken place “for the purpose of, in the course of, or pursuant to" the mediation. Evidence Code § 1119.

As a matter of statutory interpretation, the dissent seems to have the better of the argument, since the mediation confidentiality statute is written in broad enough terms to exclude evidence of  anything done or said in the course of mediation for any purpose at all.  However, as a matter of policy, this decision can be defended on the grounds that participation in a mediation ought not to serve as a shield for attorney malpractice.  The jury in the Porter trial concluded that the attorneys gave their clients some incorrect tax advice, and were obligated to reimburse them some fees and expenses.  The Court of Appeal seemed understandably reluctant to disturb that finding and order a new trial in which at least some of the evidence supporting those findings would have to be excluded.  In other words, if you can sue your attorney for the bad advice you received the day before the mediation, as well as bad advice you received the day after the mediation, why should the attorney be able to exclude evidence of the bad advice he gave you on the day of the mediation?  Mediation confidentiality was not designed to prevent parties from obtaining redress for wrongful acts by their attorneys; it was designed to encourage parties to speak freely at a mediation, secure in the knowledge that anything admitted during the mediation could never be brought up in court.

Some mediators will undoubtedly be concerned that decisions like this one erode the broad protection the Legislature has extended to mediation proceedings, because they open the door to allowing testimony about confidential settlement discussions to be used to create additional disputes.  Some of this concern may be justified, but on the whole, the principle of mediation confidentiality should not be threatened by allowing clients to preserve claims for attorney malpractice or fraud or breach of fiduciary duty regardless of when in  the course of the representation such alleged acts occurred.  Indeed, clients might even be more amenable to participating in mediation knowing that such proceedings cannot be used as a refuge for potential attorney malpractice.  In any event, the issue may soon be clarified by the California Supreme Court, which has granted review in the Cassel case.  And regardless of which way the Court rules, the issue should probably ultimately be decided by the state legislature.

UPDATE (1/11): See my post on the California Supreme Court decision in Cassel, which  upheld a more expansive view of confidentiality.

1 comment:

José Antonio said...

Nice article!

José Antonio
www.adrresources.com