Client Alerts

Communications Between Attorneys and Clients During Mediation Held Admissible

Typically, anything said “in the course of mediation” is inadmissible in a civil action under Evidence Code Section 1119(a).  That’s because courts have recognized the importance of promoting a candid and informal exchange during both the mediation and settlement stages.  Presumably, parties will be more willing to speak freely and openly if they know what is said can’t be used to their detriment later on in a proceeding.  However, a recent decision from the California Court of Appeals held that this protection doesn’t extend to communications between attorney and client.

In Porter v. Wyner, a fee dispute arose between plaintiffs and their former attorneys.  During the underlying lawsuit, the attorneys represented plaintiffs at a private mediation with a retired judge.  All parties signed a standard mediation confidentiality agreement.  The mediation resulted in an settlement through which plaintiffs were to receive over $5,000,000 in “damages,” including attorneys’ fees.  The attorneys and plaintiffs also agreed to apportion $1,650,000 of the settlement proceeds to attorneys’ fees and costs.   The fee dispute arose, in part, over the attorneys’ alleged failure to reimburse their plaintiffs for the attorneys’ fees their clients had already paid them prior to the mediation and settlement.

During trial, the court admitted communications between plaintiffs and their attorneys from a mediation in the initial lawsuit.  The jury returned a verdict in favor of plaintiffs.  When a new case came down from the California Supreme Court supporting the attorneys’ contention that the mediation evidence was introduced improperly, however, the trial court granted the attorney’s motion for a new trial.  Plaintiffs then appealed the trial court’s ruling, arguing that there was an insufficient basis for granting the motion for a new trial, and the evidence was properly admitted.

On appeal, the Court held that the mediation confidentiality did not shield the attorney-client communications at issue for a number of reasons.  First, Evidence Code Section 958 prevents an attorney from claiming a privilege for communications relevant to an issue of breach of an attorney-client duty.  An attorney can’t use the protections of attorney-client privilege as a way to fraudulently avoid liability for breach of a duty. The Court also noted the significance of the phrase “in the course of mediation.”  It is well understood that “in the course of mediation” applies to communications between opposing parties.  But the Court reasoned that to extend the scope of this definition to include communications between attorneys and clients occur “in the course of mediation” could extend to virtually every communication the attorney and client had ever had.  Not only would this make the protections already afforded to attorney-client privileges redundant, but it would effectively prevent a client from pursuing any remedy against their attorney for professional deficiencies.