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Clients to Get Notice of Limits on Evidence That Can be Used Against Lawyers in Malpractice Claims

December 29, 2018

Posted in Civil Litigation

Starting in 2019 those represented by attorneys in mediations will be given a state mandated disclosure form to sign. It’s a reminder that if the client decides to sue his or her attorney for malpractice evidence related to the mediation can’t be used. This exclusion isn’t new, but the notice is. This protection for attorneys is meant to protect mediation proceedings which can be a useful and effective means for parties to resolve their differences without going to trial.

What is mediation? Why is it helpful?

Mediation is the use of a neutral third party to help parties involved in a dispute reach a resolution to their disagreements. To encourage a free and open discussion any admissions made during mediation are kept confidential and can’t be used against the party making them in case mediation fails and the issue proceeds to litigation.

Attorneys need to provide the disclosure form prior to mediation or if the attorney is retained during the mediation process, give it to the client as soon as possible.

There have been cases where clients believed they were the victim of malpractice by their own attorneys. Plaintiffs sought to use evidence of what was said and done during mediation, but courts have ruled that can’t be used either. Courts have held it’s good public policy to protect and encourage mediation so to provide certainty to the process, potential evidence of malpractice during mediation can’t be used.

Mediation confidentiality form needs to be provided to clients

At the start of 2019 before mediation starts attorneys will be required to provide a client with a printed acknowledgment for his or her signature that states the client has read and understands these confidentiality restrictions. The bill which created this new, mandatory form was in response to the legislature’s belief that attorneys’ clients weren’t aware of confidentiality restrictions concerning mediation, specifically concerning communications, admissions and written material related to mediation that could be used in a potential malpractice action the attorney.

The new law adds Section 1129 to the state’s Evidence Code…  If a lawyer fails to comply with the disclosure requirement it can’t be a basis to set aside an agreement reached during mediation.  (Sec. 1129(e)).

The printed disclosure needs to be separate from other material and use at least twelve point font in the client’s preferred language. The sample disclosure statement in Section 1129 states,

I, _____________ [Name of Client], understand that, unless all participants agree otherwise, no oral or written communication made during a mediation, or in preparation for a mediation, including communications between me and my attorney, can be used as evidence in any subsequent noncriminal legal action including an action against my attorney for malpractice or an ethical violation.

If lawyer doesn’t comply with the new disclosure requirement he or she could face potential discipline from the State Bar. The material that can’t be used for a legal malpractice case could be used in a disciplinary proceeding investigating whether the attorney failed to comply with the disclosure requirement. If a client refuses to sign the disclosure the new law doesn’t provide for any sanctions and won’t open the door to use of communications, admissions and written material related to mediation for a malpractice claim.

Changes in mediation confidentiality considered but rejected

The new law is seen as a response to a recent trend of courts and legislatures to closely examine and limit confidentiality provisions and non-disclosure agreements in sexual harassment and misconduct settlements. This is the legislature’s way of reminding clients of the need for rules about confidentiality in the mediation setting.

Voluntary settlement of legal disputes has been California public policy for many years. The state legislature amended the Labor and Evidence Codes to promote and protect candid, off-the-record mediation discussions. Over time appellate court decisions chipped away at these protections.

In the mid-1990’s the current Evidence Code chapter providing mediation confidentiality was drafted and sponsored by the Law Revision Commission. The new chapter was adopted in 1998 and largely unchanged since.

A 2011 California Supreme Court decision stated mediation communications were not admissible when a client sued their lawyer for alleged malpractice. The following year the Legislature directed the Law Revision Commission to study the balance between mediation confidentiality and attorney accountability.

After five years of work and public input, the Commission made its final recommendation and proposed legislation in late 2017. It would have significantly weakened confidentiality protections by permitting mediation communications to be subpoenaed and used as evidence by lawyers and clients in later cases where lawyers were accused of misconduct or over-billing related to mediation efforts.

The proposal would’ve created a basis to subpoena all mediation participants for copies of confidential briefs, offers, emails and other written communications with the mediator. Those involved might also need to repeat, under oath and subject to cross-examination, communications made verbally during mediation sessions.

The Commission’s proposal met with overwhelming opposition during a public comment period. Organizations representing attorneys who serve plaintiffs and defendants objected, claiming that confidentiality was needed to encourage candor and openness, which are needed to make mediation attempts successful. Critics also stated there wasn’t evidence of enough malpractice during mediations to justify changing the law and the underlying mediation rules.

Ultimately the efforts to loosen confidentiality in cases of alleged legal malpractice failed. A committee reviewing the proposed changes for the state’s Judicial Council voiced its opposition and no one in the Legislature agreed to carry the Commission’s proposed bill in the 2017-2018 session. Instead of changing the law as it concerned mediation confidentiality, the Legislature decided to require attorneys to clearly make it known to their clients.

If you have questions or concerns about the use of mediation, contact our office at 714-415-2007 so we can discuss your situation and set up a consultation to talk about how mediation works and how it might help prevent a dispute from becoming a trial.