This blog post provides my opinion on what is an attorney’s duty to his or her client regarding mediation.
What is mediation? The term “mediation” is generally defined as the “process in which a neutral person or persons facilitate communication between the disputants to assist them in reaching a mutually acceptable agreement.” (Cal. Rule of Court 3.852(1).) In other words, “mediation” is a fancy word to describe a “settlement conference.” (The procedural mechanics of mediation are beyond the scope of this article – please contact us for further information, firstname.lastname@example.org.)
The key elements of a mediation:
- It is voluntary.
- It is non-binding.
- It is 100% confidential
“Mediation” is not “arbitration.” By definition, “arbitration” is having a third-party resolve a dispute. Most arbitrations are not voluntary and all are binding. In contrast, the parties to a mediation are free to leave at any time.
Why mediation? Our Country has an incredible civil justice system, but it is generally not efficient. Thus, over 90% of the civil lawsuits filed settle before they reach trial, mostly because of cost and uncertainty of civil litigation. Most parties to a lawsuit, whether as being a plaintiff or defendant, and whether being an individual or business, want the dispute resolved as cost effectively as possible.
Mediation is generally the most effective way to try to resolve a lawsuit. Over 85% of all mediations result in a settlement.
Why does mediation work to resolve 85% of the disputes:
- the parties/attorney select the mediator, who is usually either a retired judge or attorney with considerable training and experience in being a mediator. The mediator acts very differently than a judge in court. A good mediator will work very hard and creatively with the parties in exploring alternatives.
- potential substantial savings in legal fees and other litigation expenses;
- promptness of resolution;
- creative, business-driven solutions generally better for both parties than a solution available in court;
- maintaining control over the outcome of the dispute;
- preservation of business relationships;
- privacy and essential confidentiality;
- direct engagement by all parties in the negotiation of the settlement.
- provides an important opportunity for a client to vet their case with a neutral third party before a final and possibly binding decision is rendered.
Attorney’s duty regarding mediation:
An attorney’s main obligation to his or her client is to provide sound legal advice. Thus, an attorney’s duty of care includes to at least advise the client about possible settlement options and procedures, which includes mediation in most cases. Therefore, suggesting mediation to an angry client, bent on vindication, is not a sign of weakness.
Furthermore, an attorney should notify his or her client if the opposing party to a dispute has requested or suggested mediation. An attorney is required by both statute and the California Rules of Professional Conduct to “promptly communicate” to the client the terms and conditions of any written offer to settle made by the opposing party. (Bus. & Prof. Code §6103.5; Cal. Prof Conduct Rules, Rule 3-510.) That duty could arguably apply to a written request for mediation.
As to whether the attorney has an affirmative obligation to recommend mediation if the opposing party has requested it, it is safe to assume that if the case turns out badly for the client, the client will easily be able to find an expert witness for the subsequent legal malpractice case. The expert witness will opine that counsel should have more fully advised the client about the benefits of at least trying mediation.
Assuming opposing counsel refuses to voluntarily go to mediation, an attorney who still believes that mediation may be in the client’s best interest does have some potential judicial remedies.
California law only allows a judge to order mediation in cases in which the amount in controversy does not exceed $50,000 for each plaintiff, without regard to questions of liability, defenses or comparative negligence. Code of Civil Procedure §§1775.3, 1775.5; Cal. Rule of Court 3.891(a)(1).
California law does not presently provide that a judge can order the parties to mediation in cases in which the amount in controversy exceeds $50,000, but a judge can order the parties to participate in a mandatory settlement conference. “On the court’s own motion or at the request of any party, the court may set one or more mandatory settlement conferences.” Cal. Rule of Court 3.1380(a). When faced with a mandatory settlement conference, some attorneys who initially resisted mediation may be more willing to participate, rather than be subject to a settlement conference before the assigned judge or another judge in the same courthouse. Although a judge can order the parties to participate at a settlement conference, many do not.
One fundamental problem with either the mediation or mandatory settlement conference is that there is no way to ensure that the other side participates in good faith. In Vidrio v. Hernandez (2009) 172 Cal.App.4th 1443, the court of appeal reversed a trial court’s order imposing sanctions on a non-party insurer for failure to negotiate in good faith. As the court stated: “the failure to increase a settlement offer or to otherwise participate meaningfully in settlement negotiations violates no rule of court and is not a proper basis for an award of sanctions.” Id. at 1460. However, a court can impose sanctions if a party does not appear, or if the party’s representative does not have settlement authority. Having the person with actual authority to settle a case present at a mediation or settlement conference is an important requirement that is generally not enforced.
If an attorney believes that opposing counsel, but not the opposing party, is really the person refusing mediation, one commentator noted that a party can directly contract their opposing party to essentially try to bypass the apparently reluctant opposing counsel. However, although the Rules of Professional Conduct do not apply to the parties negotiating directly, a State Bar opinion cautions attorneys about using clients as agents or intermediaries to negotiate behind opposing counsel’s back.
If all else fails, counsel should probably at least write a letter in a positive tone to opposing counsel confirming that the opposing counsel has refused to participate in mediation. At the end of the case, the opposing counsel’s client will probably be asking why the case did not settle earlier. Rarely do further depositions or another round of written discovery change the value of a client’s claim.
“For example, about 98 percent of civil cases in the United States federal courts are resolved without a trial.” See http://en.wikipedia.org/wiki/Lawsuit.
M. Roberts, III, Why Mediation Works. See http://www.mediate.com/articles/roberts.cfm.
Mutuelles Unies v. Kroll & Linstrom, 957 F.2d 707, 711 (9th Cir. 1992) (citing Lysick v. Walcom(1968) 258 Cal.App.2d 136).
N. Barry III, MEDIATION: Getting Your Client and the Other Side to the Table. See http://www.mediates.com/drsprcnb.html.
Legal Process Reform, Reduce the Pressure toward Lawsuit Settlement. See http://www.legalreform- now.org/menu3_4.htm.
“Mandatory Mediation in Italy? Mamma Mia!” Wall Street Journal, March 14, 2011.
11 Cal. State Bar Form.Opn. 1993–131.