The Dugard family members claimed psychological, physical and emotional damages. . . . .
The money will be used to buy the family a home, ensure privacy, pay for education, replace lost income and cover what will likely be years of therapy, said Weinstein, a retired San Francisco County Superior Court judge. In addition, much of the money will be placed in long-term investments, he said.
"It was not an effort to make reparations for the years of abuse and incarceration or imprisonment against their will, because ... the damages to these people were incalculable," Weinstein said in a telephone interview. "Part of this was a prudent effort by the state to shut off liability from a catastrophic verdict."
Weinstein praised the state for quickly accepting responsibility, and the Dugards for accepting a reasonable settlement at a time when the state faces a $19 billion budget deficit. He said the scope of the claim was unprecedented in his 20 years as a mediator because of the duration of the crime and that it led to the birth of two children.
We’re celebrating Mothers Day by posting Blawg Review #263 at the She Negotiates Blogfor one obvious and some not so obvious reasons. The obvious reason is the word “She.” The not-so-obvious reasons are: (1) Mother’s Day was a peace and reconciliation movement before it was a holiday; and, (2) peace exists only when we have the political will to seek and the negotiation tools achieve the resolution of conflict.
While reading this opinion (or simply this post) think about Carrie Prejean's accusation that Larry King's question to her -- "why did you settle" --was "completely inappropriate" because (presumably) her thought process was protected by mediation confidentiality.
In yet another 2-1 opinion on mediation confidentiality -- Cassel v. Superior Court -- California's Second District Court of Appeal grapples with hard facts that made bad law.
In conversations between litigation counsel and its client, Cassel, held on the days immediately preceding mediation as well as on the day of the mediation itself, Cassel allegedly told his attorney - Wasserman - that he would be willing to accept something north of $1.25 million to settle the case. On the day of the mediation, Cassel signed a settlement agreement providing for payment of $1.25 million. Cassel thereafter sued his attorney for legal malpractice, alleging that Wasserman "forced him to sign the settlement agreement for $1.25 million, rather than the higher amount he had told Wasserman . . . was acceptable." (if you're interested in the 411 on mediation advocacy malpractice, see my recent post Yet Another Path to Attorney Malpractice in Mediation Proceedings: Coerce Your Own Client)
Before trial of the malpractice action, Wasserman filed a motion in limine asking the trial court to preclude the introduction into evidence of any testimony concerning Cassel's [otherwise attorney-client privileged] communications about the sum he was willing to accept in settlement. The trial court granted the motion, holding that these communications - undeniably conducted in preparation for the mediation - were protected by mediation confidentiality under both the plain language of Evidence Code section 1119 and the Supreme Court decisions interpreting it.
The majority on the appellate panel disagreed for the following reasons:
Communications between a party to mediation and the attorney representing him in that mediation are not part of the mediation "process" if they are not communicated to either the mediator or the opposing party because California law defines mediation as a procedure in which "a neutral person . . . facilitate[s] communication between the disputants to assist them in reaching a mutually acceptable agreement.”
"For mediation purposes, a client and his attorney operate as a single participant."
Once the court collapses the attorney and client into a single "participant," there are no mediation communicationsamong participants to protect, or, as the Court more formally stated: they were not communications between 'disputants' and the 'mediator,' as required to come within the definition of a 'mediation' or 'mediation consultation' and, therefore, to qualify for protection under mediation confidentiality."
"the fact that Cassel or his attorneys may have discussed a specific dollar amount for settlement" did not necessarily make it a communication that, in the WimsattCourt's words "are materially related to, and foster, the mediation," because "some of the communications were more related to the civil litigation process as a whole rather than to the mediation."
the most principled (but not necessarily correct) reason for the Court's holding: the attorney and its client were "not within the class of persons which mediation confidentiality was intended to protect from each other—the “disputants,” i.e., the litigants—in order to encourage candor in the mediation process."
finally, the Court's holding:
With start of trial within two weeks, the meetings and accompanying communications between Cassel and Wasserman . . . were for trial strategy preparation, not just for mediation . . . The crux of the communications was that Cassel wanted his Wasserman Comden attorneys to honor his wishes, but they resisted to the extent, according to Cassel, that they breached their duties to him as his counsel. Neither Cassel nor Wasserman Comden assert that the communications contained information which the opposing party (or its representatives) or the mediator provided during mediation or otherwise contained any information of anything said or done or any admission by a party made in the course of the mediation. For the foregoing reasons, we conclude that the communications solely between Cassel as a client and his lawyer, Wasserman Comden, do not constitute oral and written communications made “for the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation” protected by section 1119, subdivisions (a) and (b) or communications by “participants” protected by section 1119, subdivision (c).
Huh?????? Because separate caucus mediation communications between attorney and client about the sum the client is willing to settle the case for are not communicated to the mediator or the opposing party during the mediation (especially if the attorney fails to communicate the client's expressed wishes?) they cannot be considered "communications made 'for the purpose of . . . a mediation consultation"??
This is perhaps the most convoluted reasoning of any appellate opinion in memory. I'd prefer a decision that just came right out and said something along the lines of - sure the communication falls squarely within the language of the confidentiality statute, but we don't think it ought to apply where a client is suing his attorney for duress in the course of a mediation proceeding. The Court is justifiably worried about saying that because the Supreme Court has repeatedly cautioned the lower courts not to make court-crafted exceptions to mediation confidentiality. (See Simmons v. Ghaderi)
Intellectual dishonesty never got any court anywhere near the goal of justice. This might just have been the case that made the Supreme Court relent and say, "o.k., in this extremely narrow circumstance, we'll permit an exception to the statutory provision." If the Supreme Court refused to budge, this case just might have persuaded the California legislature to make a few necessary exceptions to mediation confidentiality. Now, unless the appellate court reconsiders and follows the wisdom of the dissenter, Californians won't be given the opportunity the common law creates to "course correct" the law-making process to meet the challenges of unintended legislative consequences.
As the dissent correctly observes:
In the end, the majority‟s analysis of section 1119, subdivision (a), seems to be founded primarily on its concern that protecting private communications between a client and his or her lawyer under the rubric of mediation confidentiality may shield unscrupulous lawyers from well-founded malpractice actions without furthering the fundamental policies favoring mediation. That may well be true; but, respectfully, it is not our role to make that determination. Rather, it is for the Legislature to balance competing public policies and to create an exception to the statutory scheme governing mediation confidentiality where it finds it appropriate to do so.
For those more interested in Prejean than in mediation confidentiality, here's an analysis of the Prejean/King dust-up with the Prejean money quote: "I don't see anywhere in the Bible where it says you shouldn't get breast implants."
And if you think mediation can't be as dramatic as courtroom "gotcha" moments, here's the proof that anything at all can and does happen in those "confidential" rooms:
It was reported by TMZ.com, who broke the story of the lawyers' gambit, that the lawsuit was settled within seconds of the sex tape being shown to Prejean. Just to make the episode even more embarrassing for the 22-year-old, her mother was also attending the meeting at which the tape was shown.
Do remember that California law only precludes parties from: (a) introducing confidential mediation communications into evidence; and, (b) obtaining evidence of those communications in discovery. Although sub-section (c) of section 1119 broadly provides that mediation communications "shall remain confidential," no one to date has suggested that disclosure of those communications gives rise to a cause of action in favor of any party opposing their disclosure to the general public.
Patrick Deane of Nestlé is senior counsel to the largest food company in the world, and the disputes he runs into involve distributors, retailers, suppliers and consumers in every part of the globe. His ideal mediator combines logic and intuition; a concern for detail; and the knack of an epatheic listener. He noted that commercial disputes — even financial ones — are seldom dry, but instead involve personalities, risk of loss of face, and other human attributes just as much as more personal claims do. The question of subject-matter expertise was of little importance to Deane, compared to these essential qualities in a mediator who must be expert in a process that, at heart, is aimed at cost effectiveness. “A lack of industry expertise has never caused a failure of the mediation process.
Here's my opinion (as if you didn't already know). As Colin Powell says, the most important knowledge to have in international negotiations is the other guy's decision cycle. I imagine the great predictor, the political scientist and Hoover Institute Fellow Bruce Bueno de Mesquitas would say something along the same lines (see TED lecture below). See also the NYT piece, Can Game Theory Predict When Iran Will Get the Bomb?
What is the "other guy's" decision cycle? It is comprised of every interest he must satisfy and every person he is accountable to for the foreseeable (and probable unintended) consequences of that decision. Personal injury attorneys turned mediators are well acquainted with the decision cycles of both Plaintiff and Defense counsel as well as with the interests, needs, and desires of injured Plaintiffs, on the one hand, and insurance adjusters and their supervisors on the other. Employment attorneys turned mediators are also deeply knowledgeable about the decision cycles of counsel on both sides of the table (one usually specializing in employees and the other in employers) as well as with the interests, needs and desires of terminated, demoted, or harassed employees on the one hand and of employers - both large and small - who often feel as if the Plaintiff is little better than a highway robber. Judges turned mediators are better acquainted than anyone else of the decision cycles of juries -- a jury verdict being the alternative to a negotiated resolution.
You knew I'd come to my own "specialty" knowledge. Some of it is industry specific -- insurance and financial institutions, for instance, and the garment, manufacturing, health care, commercial real estate, construction, and technology industries. Though my experience in these fields adds some value to my commercial mediation practice, what I'm most skilled at is knowing the decision cycles of commercial litigators and their business clients. I understand, for instance, the clients' reporting relationships; the metrics against which their performance and that of their corporate superiors are measured; the impact of SEC reporting requirements in "bet the company" litigation; and, the effect settlements in nine or ten figures might have on upcoming plans for mergers or acquisitions.
I can read a financial statement.
At a minimum, I can ask the questions necessary to obtain the knowledge required to ascertain the interests that must be satisfied by both parties to transform the litigation into an opportunity to make a business deal. And I know how to make the commercial clients happy with their attorneys' final resolution of the business problem burdened with the justice issue that brought the case into court in the first instance.
I am also schooled in the "field" of conflict resolution. I understand at depth the cognitive biases -- universal tendencies in the way we think -- that inhibit rational decision making. I know how conflict escalates and, more importantly, how it can be deescalated. I understand the role emotion plays in decision making (particularly the emotion most common among business litigation clients - anger); the gentle (and not so gentle) art of persuasion and, perhaps most importantly, the optimal negotiation strategies and tactics for the business problem at hand.
And, I know in the knuckles of my spine what keeps commercial litigators awake at night, worrying about the next strategic, tactical, legal or extra-legal move to make; how to explain to the client that the case has suddenly gone south; and, how to deliver that bad news to the client in a way he or she can hear it and successfully report it to the GC, the CEO, the Board of Directors or e ven the shareholders.
I know this sounds like a lot of boastful self-promotion (it is). Please don't take my word for it. Anyone charged with finding, retaining and hiring a mediator to assist the parties in resolving a piece of hard-fought, sophisticated, complex commercial litigation would do well to check with his or her peers on any mediator's boastful self-appraisals.
This is what I recall of mediator-hunting, however. I'd send out a list to my colleagues. I'd invariably get back opinions that were all over the board. He/she is great with clients but usually ends up splitting the baby in half. He/she talks too much and listens too little. He/she marginalized the client and made me look bad. He/she charges $15,000 per day and is one of the go-to mediators for this type of case but I was unimpressed, as was the client. This guy/gal can settle anything. Brilliant. Magical.
So what's a beleaguered litigator to do? Ask people you respect both inside and outside your law firm. Ask how the mediator handles the "process dimensions" of the mediation. Does he/she simply carry numbers and rationales back and forth between separate caucus rooms. Can she give bad news to both sides. Can he go beyond positional, zero-sum bargaining and into interest-based negotiated resolutions? Is the client happy with the result and with the process? After you've done this basic research, call the mediator yourself and ask him/her about the way in which she/he might handle the mediation of the particular matter you need to have resolved. You should not only have the best information possible in making your choice, you should get a fair amount of terrific free advice and external brain-storming along the way.
I really just meant to cite the Business Conflict Blog and get back to revising The ABC's of Conflict Resolution - my second draft due on October 30.
So what's my answer to the question whether the mediator should have industry knowledge? That answer lies, as most legal problems do, in the gray zone. Industry knowledge helps. But every commercial litigator knows that we can learn any industry if we have a basic understanding of how commercial enterprises work. That's what I know -- commercial litigation -- and it is the reason I don't mediate personal injury or employment disputes with anyone below the rank of senior executive. I don't know the right questions to ask and I don't know -- at depth -- the parties' or counsel's decision cycles.
From preparation to closing, some of L.A.'s most prominent mediators reveal the secrets of getting the best deal available for your clients.
Read former CAALA Trial Lawyer of the year Sandy Gage's article on Getting the Best Results in Mediation and AIM founder, mediator and trainer Lee Jay Berman'sTwelve Ways to Make Your Mediator Work Harder for You.
My ADR Services, Inc. colleagues Jan Schau, Michael Diliberto, Joan Kessler (the brains behind the entire issue!) and Leonard Levy round out the issue with Telling Lies, Telling Secrets (Schau); Opening Offers: Who's on First (Diliberto); The Defense Reveals Mistakes that Could Cost Your Client Money; and Kessler's incisive executive summary of them all.
Oh, yes, I'm here too with one of my mediation narratives, We Tell Ourselves Stories in Order to Live.
The online Advocate can be read like a magazine, complete with turning pages. It's a pretty cool online journal format in addition to being a great contribution to the growing literature on best mediation practices.
Dive in! The water is warm and the natives are friendly.
This opinion -- Palmer v. State Farm - is wrong on so many levels that it's no surprise the appellate court ordered that it not be published. The opinion therefore controls only the fate of the parties to the case and cannot be cited as authority. The no-publication order does not, however, diminish my distress about the mediator's decision to file a declaration in support of State Farm's motion to enforce a formal settlement agreement that its insured refused to sign as contrary to the handwritten agreement drafted by the mediator during the mediation proceedings.
The appellate court affirmed the trial court's enforcement of the post-mediation settlement agreement based, in large part, on the mediator's sworn declaration that State Farm's formal agreement accurately represented the one signed by the parties during the mediation -- a matter that, if true, should have appeared on the face of both documents. See HANDWRITTEN SETTLEMENT SHOWS PARTIES' INTENT, CALIF. COURT FINDS
for a summary of the Court's decision.
What's wrong with this opinion? Let me count the ways.
In California, a mediator is presumed incompetent to testify under Evidence Code section 703.5. A good thing, too, since mediators are bound by the confidentiality provisions contained in Evidence Code section 1115 et seq. /1
Mediators are also required to be -- ahem -- NEUTRAL. Why was this mediator providing a sworn declaration to support State Farm's case against the policy holder? And does his drafting of the handwritten agreement at the mediation give him a personal or professional stake in its enforcement, thus further undermining his neutrality.
I'm not going to mince words about this. I believe it falls below the standard of care for a mediator to voluntarily provide a Declaration to the Court concerning anything anyone said during the mediation, including his opinion about what the parties an meant to say when they entered into a settlement agreement (an intuition that could only be based upon confidential communications). I also believe that its below the standard of care for a mediator to voluntarily provide a declaration to one party in support of a motion against another party to the mediation.The fact that the mediator provided a declaration in support of State Farm (and not the policyholder) is even more troubling when you consider the fact that insurance carriers are repeat players in ADR circles and hence a better source of business for mediators than single-player plaintiffs.
On the confidentiality issue, it is notable that the mediator-drafted agreement stipulated that:
The parties waive the provisions of [the] California Evidence Code relating to mediation confidentiality, rendering this agreement enforceable pursuant to . . . section 664.6.”(Italics added.)
The language used suggests to me that the purpose of the clause was to render the written agreement admissible in evidence to prove its existence -- "waive . . . mediation confidentiality [to] render this agreement enforceable." I know it doesn't say that. It says that the parties are waiving confidentiality PERIOD. It would surprise me if that's what the parties meant to do, i.e., open up to judicial scrutiny every communication uttered in the course of the mediation - in separate caucus and joint session. Would a mediator be liable for an ambiguously drafted agreement that leads to the loss of mediation confidentiality for the parties? I don't have an answer to the question but mediators might want to ask themselves whether they should be drafting the parties' agreements if they want their malpractice premiums to remain as low as they are today.
John Richardson, that worthy and thoughtful New York mediator, has brought to our attention a decision by Hon. Mr. Justice Ramsey of the Royal Courts of Justice in England that seems to render unenforceable the commonplace contractual provisions immunizing mediators from testifying as to the conduct of the mediation.
In Farm Assist Limited vs. DEFRA, dated May 19, 2009, claimant sought to set aside a settlement agreement obtained after a mediation that took place in 2003, on the ground that it was entered into under economic duress. Defendant requested that the mediator, Jane Andrewartha, be compelled to give evidence as to what happened at the mediation. Claimant did not object. The court ordered that, in the first instance, she produce her files and, eventually, that she give a witness statement.
If you take the time to read the opinion, you'll see that the confidentiality protections at risk here do not arise solely from the parties' contract, but also from the case law. Not good news for U.K. mediation practice.
As every mediation advocate must know by now, the California Supreme Court has locked down mediation confidences from attack at every turn. There can be no implied waiver of Evidence Code section 1119's protections and you cannot be estopped to assert it (Simmons v. Ghaderi) (.pdf of the opinion here).
Your client may have been coerced into signing off on the agreement; may not have understood what she was signing; or her assent could have been induced by your opponent's material misrepresentations of fact. Your client's insurance carrier may be guilty of actionable bad faith during the course of the mediation. Too bad. The mediation proceeding is given greater protection than given to penitents in a confessional.
But you can inadvertently expressly waive the protections of mediation confidentiality if you've carelessly crafted your own confidentiality agreement.
California's Second District Court of Appeal held in Thottam (.pdf of opinion here) that a party's confidentiality agreement did just that -- waived the protection -- permitting one party to introduce an otherwise inadmissible draft agreement into evidence for the purpose of enforcing an otherwise unenforceable mediated settlement agreement.
As the Court in Thottam held, Section 1123(c)'s requirement that all parties to a mediated settlement agreement "expressly agree in writing . . . to its disclosure," may be satisfied by terms contained in a writing other than the alleged settlement agreement itself, including a writing executed before a settlement agreement has purportedly been entered into. Because the "draft agreement" at issue in Thottam did not contain 1123's "magic" enforcement language and because the term sheet drawn up during the mediation was not sufficiently certain to enforce in any event, one party to the subject probate proceeding objected to its introduction into evidence and to the admission of testimony concerning otherwise confidential statements made during the mediation.
Had there been no confidentiality agreement, the issue would have been controlled by Evidence Code sections 1115 et seq.; the "agreement" would have been excluded from evidence as non-compliant with section 1123; and, no evidence of statements made during the mediation would have been admitted into evidence.
Here's the danger of drafting your own confidentiality agreements in an attempt to expand the scope of mediation confidentiality.
According to the appellate court opinion, because the parties expanded the scope of confidentiality beyond that provided by the statute, the exception to the protection ("except as may be necessary to enforce any agreements from the Meeting") was broader than the enforcement exception contained in section 1123. As one blogger cogently put it at the time, "the big print giveth and the small print taketh away."
I think it's safe to say that this result was pretty much completely unpredictable and that it was within the standard of care for counsel to expand the protections contained in section 1119 (for an example of the problems created by its relatively narrow confines, see mediator Debra Healy'scomments and my response about the scope of mediation confidentiality in an earlier post in this series).
Post-Thottam, however, counsel must be extremely careful in drafting confidentiality agreements lest they inadvertently take away the protections the legislature created and the Supreme Court has so assiduously enforced.
In short, don't get fancy. Just stick with the language of section 1119
That's not a summons and complaint for malpractice, is it? Because of something you didn't know about ADR advocacy?
C'mon! ADR is all about avoiding litigation, not creating it, right? The good news is that there hasn't yet been an ADR malpractice suit of note. The bad news is, I see ADR negligence at least once a month and am holding my breath against the day lawsuits began a'poppin.
To help you avoid ADR malpractice, here is just one of ten pitfalls to be covered in this series that can make you a malpractice magnet for disgruntled clients.
write up a "term" sheet reflecting your mediated settlement agreement without including the "magic language" of Evidence Code section 1123
absent this language, a party with buyer's remorse can resist the enforcement of a "term sheet" if he feels he was was coerced into signing it; entered into it based upon a misrepresentation of material fact made during the mediation; or, that it simply does not accurately reflect the terms the parties' orally agreed upon during the mediation
use the magic language of Evidence Code section 1123 and your "term sheet" should be enforced and your client's bargaining partner precluded from introducing into evidence (pursuant to section 1119) any statement made by anyone during the course of the mediation, including allegedly coercive, misleading, or, fraudulent statements of fact allegedly inducing his consent.
the cure (from Caplan again) is the following "belt and suspenders" clause:
The parties intend this Agreement to be admissible, binding and enforceable, and subject to disclosure within the meaning of those terms in California Evidence Code § 1123 (a), (b) and (c), and this Agreement is expressly not privileged from disclosure under California Evidence Code § 1119. In addition, if the formal Settlement and Mutual Release Agreement contemplated hereinabove is [e.g., not executed within ten (10) days of the date of this Agreement] this Agreement may be enforced by motion under California Civil Code § 664.6 and the court shall retain jurisdiction over this Agreement until performance in full of the settlement terms herein.
Below is an Orange County Superior Court form that satisfies the requirements of section 664.6 (providing an expedited enforcement mechanism for the settlement agreement) but which fails to recite all of the magic words including admissible, enforceable, and subject to disclosure. So please don't trust any form other than your own!! Even forms issued by the Courts. The fact that you are entitled to an expedited hearing under 664.6 to enforce your mediated settlement agreement does not mean that you will be permitted to enforce the agreement against your opponent's will.
Of course the best way to avoid claims arising from buyer's remorse is to create a durable settlement that all parties will want to enforce. That means avoiding agreements that your client enters into when he or she is hungry, angry, lonely (i.e., sidelined) or tired (HALT). It also includes agreements that feel coerced by an overly aggressive mediator preying on the weaker of the two (or three or four) parties. And yes, Virginia, there is always a more vulnerable party; all mediators recognize who that is; and, too many mediators make a beeline for that party's soft under-belly.
Another way to avoid challenges to the mediated settlement agreement include:
bringing a fillable template settlement agreement (and these days, also a Stipulation for the Entry of Judgment in the event of default on a payment plan) that is a complete, final and binding agreement that contains the "magic language" of section 1123 that all parties execute before they leave the mediation session (no matter how tired everyone is and how much everybody wants to just go home and deal with the inevitable nit-picking over the relatively inconsequential terms of the agreement tomorrow).
not letting your fear that the "details" might blow up the "deal" you've spent so many hours negotiating.You know how these deals go off the rails the following morning when your opponent begins to nit pick terms, often as a face-saving mechanism. Let the mediator help you close the deal right there and now, assisting the parties in resolving the minor terms that can blow up in your face if left until tomorrow.
And speaking of tomorrow, I'll have Tip No. 2 for avoiding malpractice litigation arising from mediated settlement agreements. Stay tuned!
For more posts on confidentiality in both California state and 9th Circuit district courts, click here.
The subjects covered in this issue include the chaotic state of federal mediation confidentiality protections [by Phyllis G. Pollack]; the dangers of [mediator] class action fairness declarations [by Jay McCauley and Jeff Kichaven] and the difficulties inherent in applying federal conflict of interest laws developed with attorney advocates in mind to attorney neutrals and their law firms [by Robert J. Rose].
Though these issues are of critical importance to daily practice in our federal courts, very few advocates are aware that these problems exist, let alone how they might be fixed. The Resolver’s first mission is to make available to FBA members the highest level of scholarship and best practices in federal mediation and arbitration practice. The second—and perhaps the most important— mission of The Resolver, is to commence a robust and sophisticated conversation among federal lawyers, on the one hand, and district and circuit court mediators on the other, about the means by which we can more efficiently, effectively, and durably help our clients resolve their litigated disputes.
(from the Letter from the Editor by yours truly)
You'll also want to read the Message from the [ADR] Section Chair, Simeon H. Baum, whose energetic leadership is making the ADR Section of the Federal Bar Association a dynamic new force in the ADR field.
As Baum's message notes, we have great things in store for the work of the FBA's ADR Section. Simeon writes:
For those of you who are interested in what you encounter in The Resolver, we welcome you to participate actively in the FBA. Become a liaison to the section on behalf of your local chapter. If you have thoughts on pending or possible legislation that affects the dispute resolution field . . . please feel free to share them with us—publish your piece in the next issue of The Resolver.
Or, reach out to the section and your chapter and look to put your cause at the forefront of the FBA’s legislative agenda. We can take advantage of Bruce Moyer and the FBA Governmental Relations Council to cultivate the best in the ADR field through national legislation, where appropriate.
If you have a CLE program on ADR that you would like to promote, please let us know through the ADR Section, and the section can collaborate with your local chapter [Board member Jeff Kichaven is the CLE Chair this year and you can reach him at the link above].
Along these lines, the section is hoping that FBA chapters will host fireside chats or roundtable discussions featuring the circuit mediator for that area [and local Board members will be reaching out to those chapters to initiate those roundtables.
These CLE events—perhaps accompanied by a breakfast, lunch, or cocktail reception—can provide an excellent opportunity not only to enhance the use of those ADR forums, but also to meet with likeminded neutrals and representatives.
With this first issue of The Resolver at hand—thanks to the efforts of editor Vickie Pynchon, our generous contributors, and FBA sections and divisions manager Adrienne Woolley (email@example.com), we invite you to join us in the unending way of creative service to your clients, the bar, and society via the path of resolution.
I spent the day at an advanced mediation training session at the U.S. District Court in Los Angeles where I serve as a settlement officer. I came away troubled by the wide array of responses to questions concerning the mediator's "right" or "desire" or "need" to use deception in separate caucus mediation - the primary form mediation takes in Southern California litigated cases.
[C]onsensual deception is the essence of caucused mediation. This statement should not come as a shock to the reader when it is considered in the context of the nature and purpose of caucusing. Actually, it is quite rare that caucused mediation, a type of informational game, occurs without the use of deception by the parties, by their lawyers, and/or by the mediator in some form. This is so for several reasons.
First, a basic groundrule of the information system operating in any mediated case in which there is caucusing is that confidential information conveyed to the mediator by any party cannot be disclosed by the mediator to anyone (with narrowly limited exceptions). This means that: (1) each party in mediation rarely, if ever, knows whether another party has disclosed confidential information to the mediator; and (2) if confidential information has been disclosed, the nondisclosing party never knows the specific content of that confidential information and whether and/or to what extent that confidential information has colored or otherwise affected communications coming to the nondisclosing party from the mediator. In this respect, each party in a mediation is an actual or potential victim of constant deception regarding confidential information — granted, agreed deception — but nonetheless deception. This is the central paradox of the caucused mediation process. The parties, and indeed even the mediator, agree to be deceived as a condition of participating in it in order to find a solution that the parties will find "valid" for their purposes.
Second, mediation rarely occurs absent deception because the parties (and their counsel) are normally engaged in the strategies and tactics of competitive bargaining during all or part of the mediation conference, and the goal of each party is to get the best deal for himself or herself.
These competitive bargaining strategies and tactics are layered and interlaced with the mediator’s own strategies and tactics to get the best resolution possible for the parties — or at least a resolution that they can accept. The confluence of these, initially anyway, unaligned strategies, tactics, and goals creates an environment rich in gamesmanship and intrigue, naturally conducive to the use of deceptive behaviors by the parties and their counsel, and yes, even by mediators. Actually, even more so by mediators because they are the conductors — the orchestrators — of an information system specially designed for each dispute, a system with ambiguously defined or, in some situations, undefined disclosure rules in which the mediator is the Chief Information Officer who has near-absolute control over what nonconfidential information, critical or otherwise, is developed, what is withheld, what is disclosed, and when it is disclosed. As mediation pioneer Christopher Moore has noted: "The ability to control, manipulate, suppress, or enhance data, or to initiate entirely new information, gives the mediator an inordinate level of influence over the parties."
Third, the information system manipulated by the mediator in any dispute context is itself imperfect. Parties, rarely, if ever, share with the mediator all the information relevant, or even necessary, to the achievement of the mediator’s goal — an agreed resolution of conflict. The parties’ deceptive behavior in this regard — jointly understood by the parties and the mediator in any mediation to fall within the agreed "rules of the game" — sometimes causes mediations to fail or prevents optimal solutions from being achieved.
Thus, if agreed deception is a central ingredient in caucused mediation, the question then becomes what types of deception should be considered constructive, within the rules of the mediation game, and ethically acceptable and what types should be considered destructive, beyond the bounds of fair play, and ethically unacceptable. Or, perhaps more simply, in the words of mediator Robert Benjamin, in mediation what are the characteristics of the "noble lie" — deception "designed to shift and reconfigure the thinking of disputing parties, especially in the conflict and confusion, and to foster and further their cooperation, tolerance, and survival"? Because formal mediation is generally viewed as "nothing more than a three-party or multiple-party negotiation," we can begin to formulate an answer to this question by examining the current limits of acceptable deception as employed by lawyer-negotiators.
Mediators can assist parties in reaching a zone of possible agreement by making limited and heavily filtered disclosures of the parties’ private concessions that the parties disclose in caucus sessions (Brown and Ayres call this “noisy” communication).
I urge all my readers to comment, but particularly litigators like my husband who may not know what many mediators have apparently known for quite some time -- that they are making "filtered disclosures of the parties' private concessions" after promising to keep all separate caucus communications strictly confidential.
My husband assured me on the way home tonight that he will henceforth require all of the mediators he retains to guarantee him that they will not "signal" his negotiating positions, tactics or strategies to his bargaining partners.
NB: All names and situations altered to protect my own and my "opponents'" anonymity and to honor the confidential nature of the mediation.
This experience is going to take a while to digest. First let me tell you what was GREAT about my recent mediation experience.
I hired an attorney who was a full-time, highly experienced mediator.
Because the mediation concerned a long-term contractual relationship with an emotional breach and immediate cessation of business, I choose a community mediator because I wanted someone skilled not simply in pressing the parties for compromise, but in "transformative" (whole dispute) mediation (about which more later).
With two talented community co-mediators, I experienced the freedom of expression in joint session that confidentiality provides.
I learned how much courage it takes for all parties to face one another and talk about their own part in causing the dispute-creating series of events.
I experienced the nearly invisible but critical support and encouragement provided by an "audience" (lawyers, mediators, insurance representatives) "schooled" "on the spot" in respectful listening.
Though the unguarded nature of my conflict-narrative and the pain caused by listening to my former partners' account initially felt like walking a tight rope without a net, as my story proceeded without interruption or apparent contempt from my "opponents" a great sense of comfort and freedom came over me. I'm an old hand myself at creating an atmosphere of hope and safety so I didn't think that "trick" would work on me. I found, however, that the mediators' ability to assure me of the confidential nature of the process and the benefits of frank discussion, enabled me to tell my truth, in as multi-dimensional, textured and admittedly fallible manner possible. It amazed me -- as the client -- that so subtle shift in the atmosphere of the room would permit me to say, in all sincerity, that "though our experiences of the same series of events diverge wildly, I don't believe either of us is lying. We've simply strung the facts together in a different way from opposing points of view."
The opportunity the co-mediators gave me to apologize for "my part in the dispute" while still asserting the strength of my "position" that I would not be blackmailed, bullied or defeated, left me ready to settle or proceed without feelings of fear, shame, or anger.
To the extent I'll be able to tell this story (and I'm not certain I'll be able to until many years after its final resolution) the readers of this blog will be the first to know.
It's not magic. It does, however, rest upon the mediators' wholehearted belief that human beings desire reconciliation as much or more than they desire money or the "stuff" that money provides. It is premised on the elementary principle that the disputants would rather be happy than right.
Best advice to arise out of this session: when you're mediating, hire an attorney-mediator to represent you just as you'd hire an insurance attorney if you had a dispute with your carrier. One of the smartest decisions I've ever made.
Good resources for transformative mediation practice:
[T]he fact that the settlement was reached during mediation to which Evidence Code section 1119 applies does not eliminate the court’s obligation to evaluate the terms of the settlement and to ensure that they are fair, adequate and reasonable. If some relevant information is subject to a privilege that the court must respect, other data must be provided that will enable the court to make an independent assessment of the adequacy of the settlement terms.
[T]he fact that communications were made during the mediation and writings prepared for use in the mediation that are inadmissible and not subject to compulsory production does not mean that the underlying data, not otherwise privileged, is also immune from production. (Evid. Code, § 1120 [“Evidence otherwise admissible or subject to discovery outside of a mediation . . . shall not be or become inadmissible or protected from disclosure solely by reason of its introduction or use in a mediation . . .]; Rojas v. Superior Court (2004) 33 Cal.4th 407, 417; Wimsatt v. Superior Court(2007) 152 Cal.App.4th 137, 157-158.)
Foot Locker’s payroll records, for example, if relevant to the quantification of the claims being settled, are subject to discovery and may be introduced in opposition to the settlement even if they were disclosed to class counsel during the mediation, and even if class counsel was shown only a summary or analysis of those records that is not itself subject to production because prepared for use in the mediation.
* * *
Following the opportunity for limited discovery, the trial court should redetermine whether the proposed settlement is fair, adequate and reasonable. The court may and undoubtedly should continue to place reliance on the competence and integrity of counsel, the involvement of a qualified mediator, and the paucity of objectors to the settlement. But the court must also receive and consider enough information about the nature and magnitude of the claims being settled, as well as the impediments to recovery, to make an independent assessment of the reasonableness of the terms to which the parties have agreed.
We do not suggest that the court should attempt to decide the merits of the case or to substitute its evaluation of the most appropriate settlement for that of the attorneys. However, as the court does when it approves a settlement as in good faith under Code of Civil Procedure section 877.6, the court must at least satisfy itself that the class settlement is within the “ballpark” of reasonableness. (See Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488, 499-500.)
While the court is not to try the case, it is “ ‘called upon to consider and weigh the nature of the claim, the possible defenses, the situation of the parties, and the exercise of business judgment in determining whether the proposed settlement is reasonable.’ ” (City of Detroit v. Grinnell Corp., supra, 495 F.2d at p. 462, italics added.) This the court cannot do if it is not provided with basic information about the nature and magnitude of the claims in question and the basis for concluding that the consideration being paid for the release of those claims represents a reasonable compromise.
By remanding we do not suggest that the proposed settlement ultimately may not pass muster. We hold only that the trial court may not finally approve the settlement agreement until provided with sufficient information to assure itself that the terms of the agreement are indeed fair, adequate and reasonable.
The mediation of litigated cases involving personal or economic injury should mainly be about money. Unless the issues of law and fact have been fully fleshed out, mediation sessions get bogged down in contentions about ultimate facts and conclusions of law that neither side can "win."
Let’s take a drug case in which the drug causes a signature disease that only has 3-4 causal connections. Until the defendant knows my client’s medical history and definitively understands that the only causal connection present in my client’s case is the drug at issue, the defendant cannot fully appreciate the strengths of the plaintiff's case, leading to an unbridgeable divergence in the two sides' valuation. On the other hand, if I’ve not yet conducted adequate discovery to learn that the drug didn’t contain the offending agent until after my client quit taking the drug, then I’m going to waste my time – and everyone else’s – by asking for 7 figures.
If the attorneys are making arguments that sound like summary judgment motions during a mediation, both parties are wasting their time. No one should proceed to mediate before they know what they agree on and what they disagree. Ideally, the parties should agree upon as many facts and legal issues as possible before sitting down to negotiate settlement.
Make Sure The Money Person Is There
I will no longer attend a mediation unless the individual authorized to write the settlement check is present. None of this, “We have to get on the phone and see what corporate says” for me. You do not want to mediate with defense counsel only. It’s much easier for an adjuster or other money person to hold tight at a number when he/she doesn’t have a plane to catch. In fact, one of the first things I ask the corporate representative at a mediation is, What time is your flight? This information usually tells me volumes.
Make Sure The Mediator Knows Who to Talk to Before the Mediation Begins
Assuming there’s only one plaintiff and one defendant, there are no less than four parties that the mediator may need to direct his/her attention to: (1) defense counsel (2) the corporate representative of the defendant (3) plaintiff’s counsel and (4) the plaintiff. In any given litigation, one or more of these parties could be the source of impasse. Usually my clients are very well-oriented on where we need to be money-wise heading into mediation. The occasion does arise, however, when I need the mediator to help me help my client understand that his or her expectations of recovery are unrealistic. On those occasions, I instruct the mediator confidentially that my client needs a little reality testing if the case is going to settle.
All of us sometimes have unrealistic expectations. I certainly can, as can defense counsel or the corporate representatives. The point is the mediator needs to know who needs to be talked to a little more than the others. I encourage any mediator with whom I work to accept confidential settlement letters. In these letters, I mention which parties I think might be barriers to settlement.
If you have a mediator who only talks to the lawyers, you’re probably in for a long and unsuccessful day. Or, given the situation, it may be the clients who are being hard-headed. In these instances, the mediator needs to talk right past the lawyers and speak directly to the clients. As a plaintiff’s lawyer, I won’t deal with a mediator who won’t talk directly to my client or the corporate representative.
The lawyers' job is to represent their clients and the mediators job is to bring the lawyers together. If the lawyers are in the way, the mediator needs to ignore them for a while and deal directly with the clients. Ensure that the mediator you’ve agreed to will do this.
Before The Mediation Set A Time Limit For Real Progress
This last point is something that I’ve only started employing in the last few years, and it’s worked wonders. In a courteous and professional tone, I inform defense counsel that if we’ve not made sufficient progress by a certain time or within a certain number of hours – usually 2-3 – then I will leave. What constitutes “sufficient progress” is case-specific, and you’ll know it when you see it. I give this caveat to defense counsel so that there’s no misunderstanding at the mediation. If, by all reasonable measures, my case is worth 7 figures, I’m not going to spend 6 hours trying to get to 6 figures. I simply will not let that happen to me anymore.
By informing defense counsel ahead of time that I won’t stay more than a couple of hours unless I see real progress, I’ve managed to avoid many of the lowball offers that usually start the defense side of the mediation. Or, if I get a lowball offer, the numbers start increasing once I remind the mediator and defense counsel that I will leave if substantial progress isn’t made.
Of course, this point applies equally to plaintiff’s counsel. I can’t start off at $10 billion dollars like Dr. Evil with a law degree. I make sure that my offers are within reason so that I can be justifiably indignant if defense counsel starts playing games with the offers.
One Size Does Not Fit All
As I said at the beginning, there is no foolproof way for the plaintiff lawyer to approach mediation. There are numerous approaches and many depend on the parties involved. These are some of the broad categorical approaches that I take and they’ve worked for me. I hope that you find them useful as well. Happy mediating.
About The Author
Brian Herrington is the founding partner of Herrington Law, PA in Jackson, Mississippi. Licensed in Mississippi and Tennessee, Brian litigates consumer class actions, cases involving defective drugs and medical devices, and personal injury cases all over the country.
First, I note that much of Professor Murray's article focuses on arbitration agreements that are forced down the throats of consumers -- an injustice that is so far removed from one that might arise in a mediated settlement conference that I'd like to address it separately on another day.
Second, I am not without criticism of court-annexed mediation practices -- those criticisms populate this blog in great number. Nor am I naive or inexperienced enough to pretend that mediators do not effect party decisions even when they are represented by attorneys who are presumably mediation- and mediator-savvy.
Nevertheless, re-reading Professor Murray's criticisms of mediation this morning, I am once again stuck by the number of untested assumptions upon which he bases his pretty radical suggestion that mediated settlement agreements be vetted by judicial officers. The major and minor premises of Professor Murray's accusation that mediation corrupts justice include the following:
there is only one set of "powerful repeat players" -- insurance companies -- who choose and use the services of mediators;
the other set of repeat players -- plaintiffs' personal injury and employment counsel -- are more or less universally poorly equipped to either influence the mediator or to protect their clients from mediator bias;
the easily influenced plaintiffs' bar, if not protected from mediator bias, will counsel their clients to voluntarily enter into sub-optimal settlement agreements that favor the interests of insurance carriers over those of their own clients';
there is such a thing as an "objectively bad settlement" that a judicial officer would be equipped to detect and remedy;
money paid to a "neutral" is the only pernicious influence on dispute outcome, as opposed to, say, racial, nationality, gender, and/or any other socio-economic differences between a judicial officer and a litigant or between the jury and a litigant; and,
judicial officers are not subject to the influence of the repeat attorney-players who appear before them and socialize with them at Bar Association and other events.
Of all of the assumptions requiring testing before we impose a supervisory judiciary upon mediators, the premise that an objective, measureably "reasonable" settlement of any dispute exists is the one that most requires addressing.
Because I could write a book on this topic, let me just highlight some of the factors that would make third-party vetting of mediated settlement agreements difficult to impossible.
money is not the only reason people file suit nor the only basis for their decision to settle it;
whether the litigation at issue is a $2500 slip and fall action between a local grocery store and its customer; or a billion dollar insurance coverage dispute between an insurance carrier and an oil company, the people and commercial players involved are at least as -- if not more -- concerned with injustices that the law does not address as they are with those that it can address;
though mediated settlement agreements are partially based upon the cost of further litigation and trial, on the one hand, and the probability of victory times the potential jury verdict on the other hand, they are also based on party needs, desires and fears that have nothing whatsoever to do with legal causes of action such as:
a corporation's fear that it will not be able to overcome jury bias against commercial enterprises, particularly if that enterprise is engaged in providing liability and/or property damage insurance to its customers;
the fear of individuals that they will not be able to overcome jury bias against any marker of their marginalization from the dominant culture such as color, gender, nationality, sexuality or religion;
the desire that one's opponent acknowledge responsibility for the role he/she/it played in the events giving rise to the dispute and for the actions taken to resolve it, many of which further inflame the parties' experience of injustice;
party desires for revenge; and,
party tendencies to "read" and "spin" the dispute in a way that is favorable to him/her/it in all particulars -- misperceptions that are often corrected in the course of joint sessions between the parties who actually experienced the injury-causing event.
Examples of ways in which parties are able to resolve conflict in the context of their highly individual interests rather than the little buckets of rights and remedies into which we pour the facts of their dispute?
a physician gives his consent to settle a malpractice action when he realizes that the Plaintiff is not attempting to "hold him up" but genuinely experienced the breast examination he gave her as an assault;
the creditor agrees to settle for pennies on the dollar when convinced by evidence proffered during a confidential mediation session that the debtor would be bankrupted by any payment in excess of the offer (evidence not discoverable in litigation because it is not "relevant" to the causes of action alleged);
garment manufacturers settle acrimonious copyright infringement litigation after their counsel allow them to have a confidential mediation conversation which cannot be used in court against them during which they learn that they have more in common -- and more ways to advantage one another economically -- than they have to fight about;
a claims adjuster is brought to tears -- and seeks greater settlement authority -- by a father's frank confession in a confidential mediation conversation of the guilt he carries for the loss of his child in an automobile accident caused by the high speed blow-out of an allegedly defective tire; and,
family members not only settle their lawsuit but reconcile after years of self-imposed exile when they realize the "family" asset they've been fighting over is worth less to them than their love for one another.
What I'd like Professor Murray and everyone who reads his article to understand is that we all share this justice problem. The adjudication system is not working well for the people it was designed to serve. The ADR options we've put in place to smooth out the rough edges of 18th century adversarial theory and practice are themselves insufficient to efficiently and fairly resolve 21st century conflicts.
That's why I'm calling for a LegalTED Conference. And if Professor Murray will forgive the snippiness of yesterday's post, I'd like him to be one of the members of the Steering Committee.
I've recently been covering mediation confidentiality from an attorney's point of view. Because my statistics page reminds me that clients also read this blog, I sometimes direct posts to the people with the problem -- clients.
This morning I notice that someone landed on my site seekingan answer to this question:
What can you do if your HOA Board member breaks the mediation confidentiality agreement.
The lawyerlike answer to this question is -- "it depends upon what the agreement says."
But let's assume the question is covered by California law.
The Scope and Effect of Mediation Confidentiality in the Hands of Clients
Nearly every mediator begins every mediation session by explaining how and why information exchanged in mediations is confidential. I know from my community mediation work that the people usually want to know something lawyers rarely ask -- whether they'll be able to discuss what happened in the mediation with friends or family.
In the absence of a more restrictive agreement among the parties, under California law today, the answer is "yes, they can."
What's confidential? The California Evidence Code (section 1119) says that everythng said or done during a mediation is confidential
cannot be "discovered," i.e., you cannot be compelled to disclose those communications in answers to interrogatories, in deposition testimony and the like.
Those are the only restrictions on the disclosure of confidences exchanged in a mediation held in California in the absence of a more restrictive agreement. Unless a California court broadens the scope of mediation confidentiality, an HOA Board Member who runs around the complex or neighborhood talking about who said what during a mediation is not "breaking" (breaching) the California's protections for mediation confidences.
The Parties Can and Do, However, Agree to Limit the Communication of Mediation Confidences to the Participants in the Mediation.
A contract is an agreement that creates private law governing the parties' relationship with one another. If you enter into a Confidentiality Agreement in mediation, you should understand that you are creating obligations that bind you as well as rights that protect you. A google search turned up Confidentiality Agreements that provide remedies for their breach. This one for instance provides two poential consequences for breach:
any party to the agreement is entitled to ask the court to stop (enjoin) any other party from disclosing confidential communications; and,
the party who wrongfully discloses mediation confidences will be liable in damages (including the expense hiring attorneys) for any damages caused by his or her breach of the confidentiality agreement.
The California-based ADR Services has a similar term in its Confidentiality Agreement (here).
Failure to obey an Injunction can be enforced by contempt, but this remedy is expensive, would require multiple trips to the courthouse, is difficult to obtain and would not likely make up for the harm caused by disclosure. The second remedy - damages -- would require you to file a lawsuit and your monetary losses are highly unlikely to be worth the expense of litigation.
disclos[ing confidential information] to anyone [who is] not involved in any existing litigation, or any litigation that may arise, concerning the subject matter of this mediation session . . . .
The term "involved in . . . litigation . . . concerning the subject matter of this mediation" is broad and ill-defined. All homeowners might be said to be "involved in" the litigation subject of the mediation. If you read the contract language broadly, you might convince your HOA Board member that talking about the medaition around the condominium complex or in the neighborhood violates the Confidentiality Agreement.
There's nothing in this agreement, however, that states what the consequences of breach might be. Nevertheless, if you suffered monetary harm as the result of the breach, you might well be able to file suit for damages in a breach of contract action. Off the top of my head, I can't think of any harm that might flow from the Board Member's indiscretions that would cause sufficient economic harm to justify the cost of a lawsuit.
The commercial ADR panel on which I serve, Judicate West, makes a form Confidentiality Agreement available to the parties (here) which merely restates the controlling principles of confidentiality law in the State of California. In light of the recent Thottam opinion in California, I would hesitate before asking parties to sign any agreement that:
expands the scope of confidentiality beyond that provided by the Evidence Code, while at the same time,
carves out an exception for the enforcement of the agreement.
For my analysis of that opinion and the problems it creates for mediators drafting confidentiality agreements, click here and here.
If You Know the Case Law, Litigation Doesn't Have to be Robotic
By Victoria Pynchon
Here in California, there's no stronger rule of confidentiality than that applied to a mediation. It cannot be impliedly waived like most privileges, including the near-sacred attorney-client privilege. Simmons v. Ghaderi, 2008 DJDAR 11107. You cannot be estopped from relying on it. Eisendrath v. Superior Court, 109 Cal.App.4th 351 (2003). And if you want your mediated settlement agreement enforced, you must strictly comply with the requirements of Evidence Code Section 1123. Fair v. Bakhtiari, 40 Cal.4th 189 (2006).
Insurance policy-holder counsel Kirk Pasich of Dickstein Shapiro has criticized nearly all recent interpretations of mediation confidentiality by the California Supreme Court on the ground that they permit insurance carriers to use mediation proceedings to engage in acts of bad faith.
"Why should a carrier get a license to act in bad faith in mediation," Pasich asked, adding, "Cases settled, and still settle, in mandatory settlement conferences without that same shield. I don't think a process should exist that encourages, rather than discourages, a party from acting in bad faith."
If you do not understand the differences between settlement conferences and mediations, you are not alone. My informal surveys indicate that litigators believe there's no difference whatsoever between the two and few mediators are able to distinguish between them despite their training in the field. Nor have California's courts been of any real assistance.
What's in a name? Here, plenty. The application of California's Rules of Evidence to mediations has such significant potential economic consequences that mediator and litigator malpractice actions are surely looming on the horizon.
What type of misbehavior can occur in a mediation? Here are just a few examples: One party can make a misrepresentation of material fact on which the other relies in entering into a settlement agreement; as Pasich notes, an insurance carrier can act in bad faith; one mediating party could tortiously interfere with a third party's contract or prospective economic advantage; or the mediating parties can enter into a collusive settlement agreement, depriving the settling parties' co-defendants from learning facts necessary to challenge the settlement in a "good faith" hearing.
Even if all parties have expressed complete agreement during the mediation, which they then memorialize in a term sheet, absent strict compliance with the requirements of Evidence Code Section 1123, no evidence probative of that agreement will be admissible in a California court.
If the mediating parties are engaged in a settlement conference, none of this potentially bad behavior would be protected.
Given the potentially significant adverse economic consequences that can flow from a mediation, California's courts have clarified the differences between the two procedures, right?
Before further discussing the problems created by the Thottam holding,I'm providing a "brief" of the case about which I ranted and raved earlier here today.
A mediation confidentiality agreement entered into by the parties in Thottam provided that “all matters discussed, agreed to, admitted to, or resulting from ... [the mediation meeting]...
"shall be kept confidential and not disclosed to any outside person . . . ;
"shall not be used in any current or future litigation between us (except as may be necessary to enforce any agreements resulting from the Meeting), and,
"shall be considered privileged and, as a settlement conference, non-admissible under the California Evidence Code in any current or future litigation between us.”
One of the parties contended that a chart drawn up and signed by the parties during the mediation,
was sufficiently certain to be enforced according to its terms; and,
was admissble into evidence under section 1123(c) despite its failure to satisfy any of 1123(c)'s requirements.
Evidence Code section 1123(c) provides that a "written settlement agreement prepared in the course of, or pursuant to, a mediation, is not made inadmissible, or protected from disclosure . . . if
"the agreement is signed by the settling parties and any of the following conditions are satisfied . . .
"(c) all parties to the agreement expressly agree in writing . . . to its disclosure."Id. (emphasis added).
PROCEEDINGS IN THE TRIAL COURT
Without finding that the settlement "chart" constituted a "written settlement agreement" under section 1123, the Thottam trial court required one of the parties to testify about otherwise confidential mediation communications because the Confidentiality Agreement required the disclosure of mediation confidences "necessary to enforce any agreements resulting from the [mediation.]"
Apparently before Elizabeth could testify, the civil action to enforce the alleged settlement agreement was consolidated with other proceedings in the Probate Court,
at the trial of the consolidated matters, the Probate Judge refused to accept the settlement chart into evidence because it did not comply with the provisions of section 1123(c).
THE APPELLATE DECISION
the appellate court reversed the Probate Court's decision.
Section 1123(c)'s requirement that all parties to a mediated settlement agreement "expressly agree in writing . . . to its disclosure,"
may be satisfied by terms contained in a writing other than the alleged settlement agreement itself; and,
may be satisfied by terms contained in a writing executed before any alleged settlement agreement has purportedly been entered into.
Here, the Confidentiality Agreement satisfied those requirements; and,
The skeletal written settlement chart was enforceable because its material terms were, or could be made, certain.
Because the proceeding in which Appellant attempted to introduce the alleged settlement agreement was an action "to enforce what he claims is a settlement agreement reached in mediation," and,
the parties carved out of the Confidentiality Agreement any discussions that were "necessary to enforce any agreements resulting from the [mediation]"
the Confidentiality Agreement satisfied the requirements of section 1123(c); and,
the skeletal Settlement Chart was therefore admissible in evidence under that subsection.
This opinion threatens to blow a hole in sections 1119 and 1123 large enough to obliterate their protections -- protections thathave been repeatedly enforced to the letter of the law by the Supreme Court in its fairly recent Fair v. Bahktiariopinion -- holding that parties to a mediated settlement agreement must include in it an express provision that they intend to be bound thereby -- and Simmons v. Ghaderi in which the Court held that parties cannot impliedly waive confidentiality nor be estopped from asserting it.
Most Confidentiality Agreements I've seen (and used) naturally carve out an exception for the enforcement of a settlement agreement. If you sign such an agreement after Thottam, you risk the enforcement of a non-1123-compliant "settlement agreement" and risk being required to disclose otherwise confidential mediation communications on the sole ground that one of the parties alleges that the opposition entered into an enforceable settlement agreement during the mediation.
Were I attempting to resist the disclosure of mediation confidences my adversary claimed should be fair game under Thottam, I'd contend that the Thottam Confidentiality agreement, and hence its carve-out, was unusually broad and that the Court's holding should therefore be read narrowly and limited to its facts.
As California lawyers know, the Second Appellate District has jurisdiction over matters litigated in the Los Angeles Superior Court. It is therefore particularly important to take a look at the impact this decision might have upon matters mediated by the neutrals on that Court's pro bono or party pay panels. All such parties are required to sign a Confidentiality Agreement that protects from disclosure all mediation-related "written" and "oral communication[s] made by any party, attorney, neutral, or other participant in any ADR session" except "written settlement agreement[s] reached as a result of this ADR proceeding in an action to enforce that settlement."
Under Thottam, a colorable argument could be made that the mandatory Superior Court Agreement's confidentiality "carve-out" should be treated as either:
an express agreement by the parties to waive confidentiality for the purpose of enforcing "written settlement agreement[s]" even if they do not satisfy the requirements of section 1123(c); and/or,
a part of the alleged settlement agreement so that the two agreements together (confidentiality carve-out + non-compliant settlement agreement) satisfy the requirements of section 1123(c).
What to do? Don't sign any Confidentiality agreement that could possibly be interpreted in a manner similar to the one subject of Thottam unless you want to risk the disclosure of mediation confidences arising from a writing that does not comply with section 1123(c).
You can certainly refuse to sign the Superior Court's agreement in light of the Thottam holding. I don't know as a matter of Court policy whether that limits parties' ability to use the Court's pro bono or party pay mediators.
I'd have to say that this case puts confidences made in mediation sessions controlled by the Superior Court's Confidentiality Agreement at risk whenever one party is contending that the other entered into an agreement pursuant to a signed term sheet.
"What happens," asks Katz, "when a mediator is accused of breaking mediation confidentiality, the thing many mediators say is essential to their craft?"
The answer: probably nothing.
As Katz reports, the Simmons v. Ghaderi opinion that made mediation confidentiality iron-clad, arose from a mediation in which the neutral provided a sworn declaration to the Court reciting "details about [his attempt] to persuade Ghaderi to sign her consent," among other things.
Ron Kelly, an architect of the state's confidentiality statutes, opined that the Declaration filed by the mediator in the Simmons case breached "Evidence Code Section 1121, which forbids mediators, in most instances, from reporting to the courts anything that takes place in their mediations." Kelly concluded by saying,
If you were going to go after a mediator for malpractice, it seems like an open-and-shut case of violating the law would be a good start, don't you think?
Yes I do. Yet local attorneys and mediators seem unconcerned. Lucie Baron of ADR Services told Katz thather panel of neutrals had no policy on the matter because the mediators -- after all -- are attorneys and independent contractors to boot. They don't, she noted, ask her for legal advice.
Not a bad call on Baron's part. But what about the neutrals?
Their lack of attention to the spectre of "open-and-shut" malpractice litigation is perplexing. Though the Simmons mediator could colorably claim that the law of confidentiality was unsettled at the time he submitted his declaration -- or that the factual scenario before him permitted the disclosures made -- in a post-Simmons environment, neutrals cannot be so sanguine. Any disclosure of any communications during a mediation by the neutral would likely be actionable so long as it caused one of the litigants appreciable harm.
When someone is unhappy with a result -- as too many litigants of mediated settlements are /* -- they search the field for people to blame.
So far, mediators haven't been among the potential culprits.
I wouldn't count on that situation lasting much longer.
Assuming your client insists on orally memorializing the settlement reached in mediation, you must comply strictly with Evidence Code Sections 1118 and 1124. An oral agreement reached during a mediation can be proven and enforced only if (1) its terms are recited to a court reporter or recorded by a sound device in the presence of all parties and the mediator, (2) the parties expressly agree to those terms on the record, (3) the recording is reduced to writing and signed within 72 hours of its recordation and (4) all parties to the agreement expressly agree in a writing, in the sound recording or in the reported record that the signed written transcript may be disclosed.
Th[e] procedure for enforcing an oral settlement is so technical and cumbersome . . . (counsel and mediators rarely have court reporters standing by or tape recorders in their breast pockets), that we recommend against it.
We instead suggest that the parties document all settlements in writing, even if the writing contains only skeletal deal terms and even if someone has to begin drafting it at 2 a.m. The agreement should provide that the parties intend it to be enforceable or binding and that all parties expressly agree in writing to its disclosure. . . . If an action is pending between the parties, the memorandum of understanding should be made enforceable under Code of Civil Procedure Section 664.6.
See also the Supreme Court's decision in Fair v. Bhaktiari, interpreting the phrase "words to that effect" in section 1123(b) as requiring a written mediated settlement agreement to "directly express the parties’ agreement to be bound by the document they sign."
Almost right will not do. You must strictly comply with these provisions or your mediated settlement agreement will not be enforceable.
Today, the Supreme Court handed down a unanimous ruling in the long-awaited Simmons v. Ghaderi case about which I've commented on many occasions -- both on the importance of the confidentiality laws the Supreme Court held were air-tight today and on the process itself as a common example of a failed mediation proceeding.
Highlights from the opinion:
"The Legislature chose to promote mediation by ensuring confidentiality rather than adopt a scheme to ensure good behavior in the mediation and litigation process."
[T]he legislative history of the mediation confidentiality statutes as a whole reflects a desire that section 1115 et seq. be strictly followed in the interest of efficiency. By laying down clear rules, the Legislature intended to reduce litigation over the admissibility and disclosure of evidence regarding settlements and communications that occur during mediation. (citation omitted). Allowing courts to craft judicial exceptions to the statutory rules would run counter to that intent."
In Foxgate, we reasoned we "were bound to respect the Legislature’s policy choice to protect mediation confidentiality rather than create a procedure that encouraged good faith participation in mediation. Thus, we held that evidence of a party’s bad faith during the mediation may not be admitted or considered."
Here's the appellate decision that was reversed on nearly every ground raised in Justice Aldrich's compellingly well-reasoned dissent.
Thanks to Perry Itkin's Florida Mediator for linking to this Memorandum Opinion enforcing, by way of contempt proceeding, a mediation confidentiality order entered by a federal magistrate in the District of Columbia in January of this year.
We were just discussing this issue at the yearly Settlement Officer (my own S.O. profile here) "brown bag" lunch meeting with Judge Morrow of the U.S. District Court in the Central District of California. Some of those present were concerned of the the confusion that might be caused to counsel by the unsettled state of the law of mediation confidentiality in federal practice and by the Court's own "Procedures for Implementing Settlement Options," re-printed below. Notice that the Court's procedures use the terms "mediation type settlement proceedings," settlement "procedures," and, "settlement conferences" without defining any of them.
Confidentiality of Proceedings . All settlement proceedings shall be confidential. No part of a settlement proceeding shall be reported, or otherwise recorded, without the consent of the parties, except for any memorialization of a settlement and the Clerk’s minutes of the proceeding.
Procedures for Implementing Settlement Options below:
In every civil case, the parties, unless exempted by the trial judge, shall participate in one of the settlement procedures set forth in Local Rule 16-15 or as otherwise approved by the trial judge. No later than 45 days before the final Local Rule 16 pre-trial conference, the parties shall select and participate in one of the suggested settlement procedures as set forth in Local Rule 16-15 or as otherwise approved by the trial judge. Except as otherwise ordered by the Court, a Notice and Request of Settlement Procedure Selection (ADR-1), signed by counsel for both sides, shall be filed not later than 14 days after entry of the schduling order under F.R.Civ.P. 16 (b).
If Settlement Procedure No. 1 (Local Rule 16-15.4) is selected: If the assigned district judge is to conduct the settlement procedure, the parties must contact that district judge’s courtroom deputy and arrange a date and time for the settlement conference. The courtroom deputy will calendar the matter accordingly. If the assigned discovery magistrate judge is to conduct the settlement conference, the courtroom deputy shall refer the matter for settlement conference to that assigned magistrate judge. The magistrate judge’s courtroom deputy will calendar the matter accordingly. Further questions regarding this option may be referred to the courtroom deputy for the assigned district judge or assigned discovery magistrate judge, as appropriate.
If Settlement Procedure No. 2 (Local Rule 16-15.4) is selected: The parties must access the Attorney Settlement Officer Panel List available from the website. There are two panel lists on the website, one alphabetical and the other by area of law. The website also contains personal profiles of those panel members who voluntarily provided such information. The Attorney Settlement Officer Panel List is updated periodically by the Panel Coordinator. If the parties do not have the ability to access the website, the parties may contact the courtroom deputy to the assigned judge for the case. The courtroom deputy will make a photocopy of the appropriate section of the list that relates to the type of case that the parties are litigating and fax or mail that appropriate section to the requesting party. The parties shall then make a selection from the list, obtain consent from the Attorney Settlement Officer selected and file a Stipulation Regarding Selection of Attorney Settlement Officer (ADR-2).
The parties and the Attorney Settlement Officer shall arrange for an agreed upon date, time and place for a settlement conference and shall so notify the Panel Coordinator. If the parties cannot agree on an appropriate Attorney Settlement Officer from the list, they shall submit the ADR-2 requesting a random assignment of an Attorney Settlement Officer. The Panel Coordinator will perform the random assignment of an Attorney Settlement Officer from the particular area of law designated on the ADR-2 and will notify the parties by mail of the selection. Within five days after the conclusion of the settlement proceeding, the Attorney Settlement Officer shall file with the court and serve the parties and the Panel Coordinator an Attorney Settlement Officer Proceeding Report (ADR-3). Further questions regarding the Attorney Settlement Officer Panel may be referred to Dawn Osborne-Adams, Attorney Settlement Officer Panel Coordinator, at 213-894-1215.
If Settlement Procedure No. 3 (Local Rule 16-15.4) is selected: The parties shall appear before a retired judicial officer or other private or non-profit dispute resolution body for mediation-type settlement proceedings. The parties shall make any necessary arrangements in this regard and should file a notice with the court naming the person who will conduct the settlement conference and indicating the date set for the settlement conference.
If a "Notice to Parties of ADR Pilot Program" has been issued: Along with the Notice provided to plaintiff's counsel at the time of the filing of the complaint, plaintiff's counsel (or defense counsel if a removal case) will also be given an "ADR Pilot Program Questionnaire." This Questionnaire is to be completed jointly by the parties and filed concurrently with the report required under Federal Rules of Civil Procedure 26(f). After reviewing the Questionnaire, if the judge assigned to the case determines that the case is suitable for referral to the program the parties will receive an "Order/Referral to ADR Pilot Program." For further information on the program, please see General Order 07-01 which is available on the Court's website.
I often find myself explaining lawyers to their clients and clients to their attorneys. Here are some typical client complaints I hear about their litigator attorneys:
he tells me to forget about the most important losses I've suffered
she keeps editing my story
I don't understand why I can't . . . i.e., recover my attorneys' fees or cross-complain, etc.
he wouldn't let me tell the mediator everything I wanted to
she didn't let me talk to the other side
And here are the typical litigator complaints I hear about clients:
his expectations of success or recovery are commpletely unrealistic
if I tell her the weaknesses of her case, she says I've become the enemy
I've explained the limitations of the case to him, but he just doesn't seem to understand
Translating the Law into Justice -- An Explanation for Clients
The chart above and photos below are simple ways to explain to clients the gap between the law and justice. Sample explanation --
The dispute you're having exists in the world of injustice.
Picture the earth.
Now picture a grain of rice somewhere on the earth.
The grain of rice represents the injustices the law will remedy.
The earth represents the injustices the law will not.
Square Pegs in Round Holes -- An Explanation of the "Legal Story" for Clients
It feels like your attorney is "editing" or shaping or "spinning" your story of injustice because she is. The yellow square represents the facts necessary to obtain relief in court (damages, an injunction, etc.). It also represents the facts necessary to defeat your opponent's claim for relief.
The entire dispute -- everything that happened inside the green circle -- is generally what you, the client, want to resolve.
IT OFTEN INCLUDES FACTS THAT WOULD BE HARMFUL TO YOUR CASE.
That's why your attorney doesn't let you talk in the presence of the "other side" and asks you not to discuss the dispute with your opponent anymore. Because you might reveal something in the green area that's bad for proving your case in the yellow area.
THE MEDIATION ZONE -- AN EXPLANATION FOR ATTORNEYS AND THEIR CLIENTS
Mediators work in the green area. Clients almost always want to resolve all of the issues raised by the dispute, not simply the "legal" ones. Perhaps more importantly, there are many opportunities for resolution in the green mediation zone that no one has yet seriously explored because the green zone is not the focus of the legal action. Only the yellow legal zone is.
Mediation restores the dispute to the people who have it. They are the only ones who know and understand that dispute in all its detail, texture, dimension and meaning. Party interests -- their hopes, fears, desires, needs, etc. -- exist in both zones. The good news of mediation is that the party interests outside the legal zone can often be traded for concessions that are in or out of it.
When you have only one currency to negotiate with -- dollars -- you often reach impasse. Why? Because it seems so unfair to both parties that they should give in, compromise, split the baby in half, etc. just because the cost and aggravation of getting to trial is so high.
When you have more than one currency to negotiate with, however, like dollars and "face" or dollars and unexplored business opportunities or dollars and apology, or dollars and an explanation for the dispute's events that has the ring of truth, you can trump legal impasse with party interests.
Writing on a Grain of Rice
Vendors who line beach boardwalks or the sidewalks of tourist towns often include the guy who will write your name on a grain of rice. HERE!!!
Sometimes I feel as if my entire career as a litigator was written on a grain of rice -- that's how small the legal zone sometimes looks from here. It's O.K., though. Litigation isn't just a job or even just a career. It's a calling, this business of rights and remedies, of following a rule of law instead of a strong arm or the snake-oil's charm.
As the poet Lao Tzu wrote,
whether a man dispassionately
Sees to the core of life
Sees the surface,
The core and the surface
Are essentially the same,
Words make them seem different
Only to express appearance.
If name be needed, wonder names them both:
From wonder into wonder