California Assembly Bill 2025 Would Allow Introduction of Mediation Communications Between Attorneys and Their Clients in Actions For Malpractice or Breach of Fiduciary Duty
California Assembly Member Don Wagner introduced Assembly Bill 2025 to amend California Evidence Code section 1120 to allow:
“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.”
The proposed amendment of the Evidence Code is a response to the California Supreme Court’s decision, Cassel v. Superior Court, 51 Cal.4th 113 (2011). In Cassel, the Supreme Court held (1) an attorney's mediation-related discussions with his client were confidential and neither discoverable nor admissible for purposes of proving a legal malpractice claim, and (2) applying the mediation confidentiality statutes to legal malpractice actions does not implicate fundamental due process concerns that might merit a constitutional exception.
In Cassel, the client sought to pierce through the confidentiality protections in mediation, claiming that he was coerced by the mediator and his own attorney into accepting a settlement, though he was tired, hungry, and ill. The client further claimed that his attorneys threatened to abandon him at an imminently pending trial, misrepresented settlement terms, falsely assured him they would negotiate a settlement agreement, and falsely promised to discount his attorney’s fees, even pursuing him to the bathroom to “hammer” him to settle.
Justice Baxter, author of the opinion, insisted that “we understand the policy concerns advanced”, but that based on the “plain language” of the statute, confidentiality needed to be protected. Ostensibly relying on the “plain language” of the Evidence Code, the opinion nevertheless discusses in some detail the policy advanced by confidentiality: promoting a candid and informal exchange that can be “achieved only if the participants know that what is said in the mediation will not be used to their detriment through later court proceedings and other adjudicatory processes.” Unlike the attorney-client privilege, the mediation confidentiality statutes do not create a privilege in favor of any one particular person. Instead, confidentiality cloaks the entire mediation for the benefit of all participants. The confidentiality statutes “serve the public policy of encouraging the resolution of disputes by means short of litigation.”
Nor does a violation of due process arise just because a client can’t introduce evidence of malpractice in a civil action. Interestingly, the one case creating a judicial exception to mediation confidentiality is Rinaker v. Superior Court, 62 Cal.App.4th 155 (1998) – a criminal case. In Rinaker, a minor needed access to information elicited in mediation to impeach a witness. The minor’s constitutional right to impeach a witness took precedence over mediation confidentiality. Thus, Rinaker involved weighty due process considerations.
“I concur in the result,” wrote Justice Chin in Cassel, “but reluctantly.” Justice Chin observed that the majority noted, “the Legislature remains free to reconsider this question.” Justice Chin invited the Legislature “may well wish to do so.”
More recently, mediation confidentiality has been upheld in Provost v. Regents of the University of California, 201 Cal.App.4th 1289 (2011). Plaintiff Provost claimed, among other things, that the mediator told him that Provost’s employer would have criminal charges filed against him if he did not sign a stipulated judgment immediately. The Court of Appeal, however, held that mediation confidentiality precluded Provost from presenting evidence of alleged coercion and duress in mediation to oppose a motion brought to enforce a settlement stipulation.
No solution here can be altogether edifying, because the problem involves important goals that can sometimes conflict – promoting frank exchanges in mediation among all participants, encouraging mediation as an alternative to a court trial, and holding attorneys responsible for malpractice or breach of fiduciary duty occurring in mediation. One thing is certain after Cassel: the State Supreme Court is not prepared to express a “view about whether the statutory language . . . ideally balances the competing concerns or represents the soundest public policy.” Any significant adjustments will need to be done by the Legislature or not at all.
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