Saturday, March 31, 2012

Confidentiality Exceptions

Last year the California Supreme Court upheld California's expansive protection for mediation confidentiality to bar evidence of attorney-client communications made during mediation in support of potential malpractice claims against attorneys. In doing so, however, the court practically begged the legislature to consider amending the statute to allow the use of such evidence. A bill has now been introduced in the legislature to do just that. It would amend Section 1120 of the Evidence Code, which already provides some very narrow exceptions to mediation confidentiality, to add this new exception to the general rule of inadmissibility:
(4) The admissibility in an action for legal malpractice, an action for breach of fiduciary duty, or both, or in a State Bar disciplinary action, 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.
 Mediators tend to oppose reflexively any exceptions to mediation confidentiality, at least partly out of self-interest. (None of us wants to be asked to testify about what happens at a mediation.) Mediators are also legitimately concerned about opening the doors to new litigation springing from buyer's remorse over settlements that parties are induced to make during mediation. Any exceptions to a broad protection for mediation confidentiality could undermine one of the central features of mediation. The process is meant to operate with a minimum of rules, sanctions and judicial oversight. Once an exception is carved out to assist attorney malpractice claims, the next case raising some alleged egregious misconduct in mediation (whether by counsel, by the opposing party, or by the mediator) could lead to carving out additional exceptions, to the point where the whole process may need to be transcribed to provide a proper record of what occurred. And once everything is on the record, then we are not going to be able to have the kinds of conversations we need to have to achieve settlement by means of confidential negotiations.

On the other hand, the allegations in a case like Cassel provide cause for legitimate concern. As I outlined in a previous post, Cassel claimed that after a 14 hour mediation session, he was "hammered" into settlement.  He claimed that his attorneys threatened to abandon him before trial, falsely offered to discount their fees if he would accept a settlement, and falsely assured him that he would be able to negotiate a side deal that would enable him to recoup some of the losses he was waiving.  Exhausted and seeing no alternative, he claimed that he finally signed the settlement agreement at midnight without a full understanding of its complicated terms. Is it a sufficient answer to parties feeling victimized in such a manner to tell them they don't have to sign whatever it is their attorneys and perhaps the mediator are urging them, after a grueling and confusing mediation session, to sign? If we don't deal with such complaints by providing an opportunity to sue the alleged offending attorneys or other parties, how do we deal with potentially abusive conduct in a way that will maintain public satisfaction with the mediation process? Do we really want to suggest that if a mediator or a party's attorney commit outright fraud, or engage in other coercive tactics to induce a party to settle, they have no remedy?

It seems to me that one source of the problem is that mediation is a profession with few agreed-upon or enforceable standards. At least in California, mediation has no governing body, weak professional associations, and no licensing or educational requirements other than those that may be enforced by various court panels. Mediation has evolving ideas of best practices, but still mainly relies on trust that the mediator will live up to them. Attorneys, by contrast, must abide by rules of professional conduct, and face discipline as well as malpractice claims, if they fail to do so. The exception to mediation confidentiality under discussion can be seen as a way to make sure attorneys adhere to those guidelines whether in a courtroom, or in a secret conference room. They should gain no cloak of immunity from professional standards when they usher their client to a mediation.

The issue of mediation confidentiality raises broader concerns about assuring that mediations are conducted in a fair and safe manner. That imposes some burden on mediators to enforce ethical standards of conduct. The best way to maintain the public's trust in the process may be to develop standards of practice for mediators, as well as some way to assure adherence to them. At the same time, we have to make sure that enforcing those standards does not threaten the values of mediation confidentiality, or unduly burden the process of mediation with the kinds of rules and costs and sanctions and procedures that have made the court system so cumbersome, and gave rise to the need for mediation in the first place.

Sunday, March 18, 2012

Truth vs. Peace

As expected, the new season of Fairly Legal has veered even further away from a realistic portrayal of mediation, to give more attention to the drama of the characters' personal lives and business ambitions. As far as I can tell from the season opener, mediation is just Kate's job, in the same way that many TV characters have a job that adds some additional drama to their personal dramas. The changes that have been made in the second season emphasize the characters' multiple problems even more than last year, which is probably what the show had to do to succeed, so I can't  really complain about that. I also probably don't even need to remind people that they shouldn't expect to see anything resembling the actual work of mediators on this show. I don't need to explain, for example, that mediators do not go around tracking down witnesses to try to persuade them to testify at trial.

On the other hand, the show usually manages to raise at least one or two genuine issues that can provoke a real discussion. For one, this episode skirted over the ethical questions posed by Kate's personal flirtation with the plaintiff's lawyer in the mediation, as well as her firm's business flirtation with the lawyer on the other side. More interestingly, the show portrayed a client who didn't understand the concept of settlement at all. Frequently in settlement negotiations we encounter clients or adversaries who believe that trial will reveal the truth, and most likely vindicate their position. We can try to explain to those parties that a jury verdict might not always represent the truth, or that the truth might not turn out to favor their position as much as they believe. But it can sound almost, well . . . unpatriotic to disabuse people of their belief in the judicial system. We might need to recognize that some cases do need to go to trial to at least try to provide an answer to the parties' quest for truth.

In the case portrayed on the show, we were introduced to a reluctant plaintiff who wasn't sure he was entitled to payment at all. He was willing to accept compensation if it could be shown that the company had done something wrong, but he did not think he should receive anything if it turned out that the company was blameless. Evidently this was one of those people who believes that there are too many frivolous lawsuits around, and he wanted no part of that, even if he could benefit from a settlement of such a suit. He therefore could not understand the basis for accepting a settlement offer that represented an approximation of the likelihood that the company might or might not be found liable in a related class action trial. He needed to know what really happened. 

There was some recognition on the show that trials do not always reveal the truth. One would think a show extolling the virtues of mediation would follow that premise to its conclusion. They could have shown that that juries can see the same set of facts in different ways, or that witnesses often distort the truth at trial, or that multiple outcomes are possible at trial for any number of other reasons. Instead, the show decided to send Kate on a quest to discover the smoking gun memo that would have proved whether the company was guilty or not, because that was what the party in mediation wanted to know, and therefore the mediator took it upon herself to satisfy a party's desire that was not being satisfied by his attorney, by the opposing party, or by the legal system itself. The mediator becomes the hero only by providing the thing that the rest of the system is supposed to, but somehow failing to provide (truth), and not by providing what mediation promises (peace) at all. This tells us that the television audience is presumed to hunger for the truth, and is not so interested in finding a peaceful resolution to conflict that leaves the truth unknown. It seems in the world of fiction, and in the real world as well, we yearn to find out who is right and who is wrong, who should be rewarded and who should be punished. We're not quite ready to accept that resolution of conflict has value in and of itself, whether or not we can discover the truth.

Monday, March 12, 2012

Lawyers Beware?


Everybody's favorite mediator is back for a second season of Fairly Legal, as I've learned from the billboards and bus ads showing Sarah Shahi posing with a set of toy lawyers she is about to knock down like dominoes. I have no idea how this theme (if it is one) is going to play out on the show, but I'm a little concerned that it might feed into the common perception that lawyers are the enemies of mediators and the obstacles to settlement. I don't think that is the case most of the time.

By the time cases get to mediation, the parties' lawyers are often more anxious than their own clients to get the case resolved. They might be a bit worried that the case will not go as well at trial as the clients are hoping. They might be concerned about getting paid for the time that trial preparation will take. They might even be interested in getting the best result possible for their client, and they recognize that a fair settlement may represent the best result, all things considered. Most of the time, lawyers do not need to be knocked out of the way to accomplish a settlement. Most of the time, it's more effective for a mediator to support the parties' lawyers. I like to tell parties to pay careful attention to their attorney's assessment of the case, because the lawyer has usually spent a lot of time thinking about how to present the case, and how likely their client's position is to prevail at trial.

Lawyers often want to tell their clients that it is the client's best interest to settle, but they may need the support of the mediator to convey that message. Treating a party's attorney as an enemy is almost always a mistake. If a mediator does that, even in the occasional case where a lawyer might deserve it, the mediator is probably only going to antagonize the lawyer--and the client--and thereby lose a potentially useful ally in persuading a client to resolve the dispute.