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The Never Ending Story: Mediation Confidentiality

From the Blog of Phyllis G. Pollack.

       On October 23, 2006, I wrote a blog entitled “When Public Policies Collide: Something to Think About” in which I discussed the appellate decision in Simmons v. Ghaderi.  That  court determined that the lack of consent by Dr. Ghaderi was more important than honoring and upholding mediation confidentiality. It held that California Evidence Code §1119 (providing for confidentiality in mediations) should not be applied such that the trial court could take evidence of what occurred during the mediation to determine if an enforceable oral settlement had, indeed, been reached.

       Based on the prior decisions of the California Supreme Court, upholding mediation confidentiality to the fullest and broadest extent possible, one might speculate that California’s high court would reverse. And, this is, indeed, what happened. On July 21, 2008, the California Supreme Court (Case No. S147848) reversed the appellate court, concluding that the lower court, “. . .improperly relied on the doctrine of estoppel to create a judicial exception to the comprehensive statutory scheme of mediation confidentiality and that the evidence relating to the mediation proceedings should not have been admitted at trial.” (Id. at 2).

        The facts are simple: In this wrongful death action, the plaintiffs, representing the deceased, attended a  mediation with defendant Lida Ghaderi, M.D. and her malpractice insurer. At the beginning of the mediation, Dr. Ghaderi provided her insurer with a written consent to compromise the matter for a sum not exceeding $125,000. The Honorable Robert T. Altman, retired, was the mediator and obtained plaintiff’s agreement  to settle for $125,000. Upon being told that plaintiff agreed to settle, Dr. Ghaderi orally reneged on her consent and left the mediation. The issue: was there an enforceable oral settlement?

       As in its prior decisions, the Court discussed the legislative history of the mediation confidentiality statutes in California and the public policy and the thinking of the California Law Revision Commission behind these statutes. It concluded that based on these statutes, the written agreement drafted at the end of the mediation is not admissible “. . . under [California Evidence Code] §§1119, 1122 and 1123 as there was no express agreement that it could be disclosed, and it was not signed by defendant or her attorneys.” (Id. at 13). The Court further noted that the parties agreed that the oral settlement agreement was not admissible as it did not meet the requirements of the Evidence Code sections at issue. (Id.).

      The Court then discussed the appellate court’s application of the estoppel doctrine to hold that the trial court could determine if a settlement did, indeed, occur. Noting that in its previous decisions, it has held that “mediation confidentiality is to be strictly enforced” (Id. at 14), the Court was unwilling to create a judicial exception. It found that the facts in this matter did not implicate constitutional guarantees such as due process or the right to confrontation nor were there any express waivers of confidentiality signed by the parties. (Id.  at  15). Rather, here the facts implicated only the policy choice by the legislature that some bad faith actions by one or more parties to a mediation may go unpunished due to the cloak of confidentiality. Consequently, the Court was not inclined to agree with the appellate court that the judicially crafted exception of estoppel should be applied to mediation confidentiality.

       For many of the same reasons, the Court rejected the application of an implied waiver exception:

      “The Legislature chose to promote mediation by ensuring confidentiality rather than adopt a scheme to ensure good behavior in the mediation and litigation process. The mediation statutes provide clear and comprehensive rules reflecting that policy choice.” (Id. at 22).

       In the end, the Court reversed and remanded for further proceedings consistent with its decision.

       So. . . once again mediation confidentiality wins out. . . and like that commercial about Las Vegas. . . what goes on in mediation, stays in mediation.

       . . . Just something to think about.     


Phyllis Pollack

Phyllis Pollack with PGP Mediation uses a facilitative, interest-based approach. Her preferred mediation style is facilitative in the belief that the best and most durable resolutions are those achieved by the parties themselves. The parties generally know the business issues and priorities, personalities and obstacles to a successful resolution as… MORE >

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