Cassel v. Superior Court
Today the California Supreme Court reversed the Court of Appeal in the case of Cassel v. Superior Court, holding that communications between an attorney and client “in the course of a mediation” are confidential and privileged, and thus cannot be used later when a client attempts to sue his lawyer for malpractice.
The California Supreme Court read Evidence Code § 1119 literally. And it read it wrong.
Here are the facts of Cassel, straight from the California Supreme Court’s opinion:
Petitioner Michael Cassel agreed in mediation to the settlement of business litigation to which he was a party. He then sued his attorneys for malpractice, breach of fiduciary duty, fraud, and breach of contract. His complaint alleged that by bad advice, deception, and coercion, the attorneys, who had a conflict of interest, induced him to settle for a lower amount than he had told them he would accept, and for less than the case was worth.
Prior to trial, the defendant attorneys moved, under the statutes governing mediation confidentiality, to exclude all evidence of private attorney-client discussions immediately preceding, and during, the mediation concerning mediation settlement strategies and defendants’ efforts to persuade petitioner to reach a settlement in the mediation.
Evidence Code § 1119 states:
With specified statutory exceptions, neither “evidence of anything said,” nor any “writing,” is discoverable or admissible “in any arbitration, administrative adjudication, civil action, or other noncriminal proceeding in which . . . testimony can be compelled to be given,” if the statement was made, or the writing was prepared, “for the purpose of, in the course of, or pursuant to, a mediation . . . .” (Evid. Code, § 1119, subds. (a), (b).) 1 “All communications, negotiations, or settlement discussions by and between participants in the course of a mediation . . . shall remain confidential.” (Id., subd. (c).)
The purpose of Evidence Code § 1119 is to facilitate dialogue between parties (i.e., “participants”) in a mediation. It is difficult to say how effective mediations would be without this type of confidentiality, but needless to say it would be almost impossible to have any type of productive dialogue or negotiation without this broad confidentiality provision.
Conversely, an attorney always has a fiduciary duty to his client, meaning the attorney’s duty to put the client’s interests ahead of the attorney’s interests is absolute. At the same time, the client has the duty and obligation, whether moral, ethical, or contractual, to be honest and forthright with the attorney. So both the attorney and client have duties and responsibilities to the other, regardless of the context, 100% of the time.
Or, should I say, had.
The Cassel ruling potentially hurts both parties to a dispute and their attorneys. In Cassel, the client, who alleged malpractice as a result of communications made by his lawyer to him in the course of a mediation (defined as prior to, during, or following the mediation itself), is precluded from offering into evidence any verbal communications and/or writings memorializing such advice. Similarly, if the attorney advises the client to accept offer A (or make offer A), and explains the hazards of not accepting offer A, and then memorializes those hazards in a post-mediation communication, the client hypothetically could later testify that he/she was never advised to accept offer A, nor was he/she advised on the hazards of accepting offer A. (While this may sound dubious or unlikely, I have colleagues who were sued (successfully!) under this exact scenario.) Therefore, an attorney can fulfill his/her fiduciary responsibility to the client and can later introduce no evidence in court that he/she competently and conscientiously fulfilled his/her obligations, duties and responsibilities.
Here is the strongest argument the Cassel court can make in support of its ruling:
Moreover, as real parties observe, the Legislature might reasonably believe that protecting attorney-client conversations in this context facilitates the use of mediation as a means of dispute resolution by allowing frank discussions between a mediation disputant and the disputant’s counsel about the strengths and weaknesses of the case, the progress of negotiations, and the terms of a fair settlement, without concern that the things said by either the client or the lawyers will become the subjects of later litigation against either. The Legislature also could rationally decide that it would not be fair to allow a client to support a malpractice claim with excerpts from private discussions with counsel concerning the mediation, while barring the attorneys from placing such discussions in context by citing communications within the mediation proceedings themselves.
This would be a legitimate concern only if the underlying case had failed to resolve at the time the malpractice action was filed (leading to the possibility that attorney-client privileged communications, including the strengths and weaknesses of a case and settlement value, were fair game in open court), or if the matter had resolved subject to a confidentiality clause. In the former case, concerns about privileged communications being prematurely revealed would require a stay of the malpractice action pending the outcome of the underlying action (assuming that a malpractice action would even be ripe before the conclusion of the underlying matter). In the latter situation, confidentiality clauses generally provide for the discovery of the settlement terms in certain circumstances, one of which is if compelled by a court in a subsequent proceeding. Therefore, one party could refuse to reveal documents and/or testimony, citing the confidentiality clause, and the court could then compel that party to provide this extremely relevant and necessary testimony.
As a mediator, I do not see this affecting my practice in any way. Cassel could arguably have required a mediator to testify as what he/she heard in the course of a mediation between an attorney and client, but does not address the issue. And, in fact, Cassel explicitly states, “The only question presented is whether certain attorney-client communications [that occurred outside the presence or hearing of the mediator or any other mediation participant] were “for the purpose of, in the course of, or pursuant to,” that mediation.”
As a litigator, I cannot conduct myself or my practice any differently in spite of Cassel. I have a duty to my client to explain the risks and rewards, the upsides and downsides, of any prospective resolution regardless of the setting or context. It is my practice to memorialize these discussions in writing for two reasons: (1) it oftentimes helps the client to see the pros and cons in writing; and (2) I was taught early in my career that there are certain communications that must be memorialized if for no other reason than to CYA. In the end, Cassel is wrong because at best it excludes the best evidence of attorney-client communications prior, during, and subsequent to mediations that are unquestionably relevant to the issue of attorney malpractice or misconduct (or another such admission of same by the client) and, at worst, encourages dishonesty in a subsequent proceeding.
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