Senate Bill 954, which took effect January 1, 2019, requires attorneys, before participating in mediation, to provide written disclosures to their clients explaining mediation confidentiality and obtain written consent from their clients indicating that they understand the breadth and impact of mediation confidentiality.
For decades, California courts, and public policy, have favored voluntary resolution. To prompt this option as an alternative to trial, or even arbitration, in the mid-nineties, the California Legislature approved the codification of mediation confidentiality in Evidence Code sections 1115 – 1128. Subsequent to the enactment of this legislation, the California Supreme Court upheld several challenges to the statute. The fifth, and last, decision provided the motivation for the Legislature passing S.B. 954. In Cassel v. Superior Court, the Court addressed the “effect of mediation confidentiality statutes on private discussions between a mediating client and attorneys who represent him in the mediation.” The Court acknowledged that some policies could justify limiting the scope of mediation confidentiality to permit client recourse against an attorney in the context of a malpractice claim by the client, but the Court found that the plain meaning of the mediation statutes clearly conveyed the Legislature’s intent to exclude all such communications unless expressly waived by the client.
In short, in an effort to accommodate client rights and to directly address the concerns of consumer advocates seeking an exemption to mediation confidentiality, S.B. 954 effectuates a new requirement that attorneys enhance their efforts to inform clients of their rights. So, while there is no real change in the mechanics of the mediation process (including the concept of confidentiality), and the new law doesn’t really expand clients’ rights, the new law does impose an additional obligation of the attorney to provide to the client a written disclosure and obtain a signed acknowledgement from the client regarding the extent and impact of mediation confidentiality.
As a favor to attorneys (or their paralegals) involved in mediations, the Legislature also included in the newly revised Section 1129 language that is deemed compliant with the law for inclusion in the written disclosure and acknowledgment form. Explicitly, the suggested language stated in the disclosure alerts the client to the fact that by mediating, the client is not prevented from suing for malpractice, but will not be able to offer the communications covered by mediation confidentiality as evidence in support of that claim. Finally, the new law amending the mediation statutes provides that failure to comply is “not a basis to set aside an agreement prepared in the course of, or pursuant to, a mediation.” But an attorney who fails to comply, is subject to a disciplinary proceeding pursuant to updated Evidence Code section 1122(a)(3).
In short, this new law, imposing new requirements, encourages – with little consequence for non-compliance – more clarity for clients with regard to mediation. And, another base for attorneys to tag while heading toward the “home base” of mediation. It’s a win – win!