A Pocket Guide to Mediation Ethics
A black letter summary of an attorney’s and a mediator’s ethical duties at a mediation
LACBA Update, November 2006

By Michael D. Marcus, mediator and arbitrator with ADR Services, Inc. in Los Angeles, and former chair and current member of LACBA’s Professional Responsibility and Ethics Committee. The opinions expressed are his own.

The Lawyer’s Duties

All participants, including insurance representatives, must appear personally at the mediation. Parties and not just their counsel, including an insurance representative of a covered party, have an obligation to appear at a court-ordered mediation. (California Rule of Court 1634; Los Angeles Superior Court Local Rule 12.15.) Defendants, however, are not required to appear where they are covered fully under an insurance policy that gives the insurer the right to settle without the insured’s consent. (Fiege v. Cooke, et al. (2005) 125 Cal.App.4th 1350.)

Ex parte communications with the mediator are permitted. Since mediations are based substantially on ex parte communications between one party and the mediator, neither Rule of Professional Conduct 5-300(B) nor California Rule of Court 379 applies.

Conflicts of interest with multiple clients must be avoided. An attorney at mediation who represents more than one party in the matter must be careful to comply with California Rule of Professional Conduct 3-310(C).

The attorney must provide the client with competent representation. “A lawyer must provide a client with competent representation in negotiating a settlement.” (ABA Guidelines 2.2; see also Rule of Professional Conduct 3-110(A), which provides that “A member shall not intentionally, recklessly, or repeatedly fail to perform legal services with competence.”)

Notwithstanding the status of the law, counsel should not misrepresent the facts or the law to the mediator. While an attorney cannot mislead a judicial officer (Business and Professions Code Sec. 6068(d); Rule of Professional Conduct 5-200(B)) and should not make misleading statements to opposing counsel (In the Matter of Katz (1995) 3 Cal. State Bar Ct. Rptr. 430, 435), and an attorney was disciplined in part for intentionally misleading a settlement judge about the facts of the case (In the Matter of Jeffers (1994) 3 Cal. State Bar Ct. Rptr. 211), misrepresentations to mediators are neither sanctionable nor disciplinable. The analysis starts and ends with Foxgate Homeowners’ Association, Inc. v. Bramalea California, Inc. (2001) 26 Cal.4th 1, which states that a mediator, pursuant to Evidence Code Sections 1119 and 1121, may not report a participating attorney’s misconduct to the judge who has the case on his or her calendar. See, in particular, fn. 13 at page 17, which provides that “[t]he conflict between the policy of preserving confidentiality of mediation in order to encourage resolution of disputes and the interest of the state in enforcing professional responsibility to protect the integrity of the judiciary and to protect the public against incompetent and/or unscrupulous attorneys has not gone unrecognized. (Citations omitted.) As noted, however, any resolution of the competing policies is a matter for legislative, not judicial, action.”

The attorney must consult with the client during the mediation. “A lawyer must reasonably consult with the client respecting the means of negotiation of settlement, including whether and how to present or request specific terms.” (ABA Guidelines 3.1.3; see also Business and Professions Code Sec. 6060(m) and Rule of Professional Conduct 3-500, which require lawyers to keep clients reasonably informed of significant developments relating to the representation.)

Multiple clients must consent to aggregate settlements. An attorney who represents more than one party may not, pursuant to California Rule of Professional Conduct 3-310(D), enter into an aggregate settlement of a claim without the informed written consent of each client.

The final settlement terms are within the client’s control. “A lawyer can exercise broad general authority from a client to pursue a settlement if the client grants such authority, but a lawyer must not enter into a final settlement agreement unless either (a) all of the agreement’s terms unquestionably fall within the scope of that authority, or (b) the client specifically consents to the agreement.” (ABA Guidelines 3.2.1; on the other hand, the defendant client need not be consulted about the settlement or its terms if the client is covered fully under an insurance policy that gives the insurer the right to settle the matter without the insured’s consent. [Fiege, 125 Cal.App.4th 1350].)

Agreements not to report misconduct are unenforceable. “A lawyer must not agree to refrain from reporting opposing counsel’s misconduct as a condition of a settlement in contravention of the lawyer’s reporting obligation under the applicable ethics rules.” (ABA Guidelines 4.2.3)

The terms of the settlement may be confidential. “Except where forbidden by law or disciplinary rule, a lawyer may negotiate and be bound by an agreement to keep settlement terms and other information relating to the litigation confidential.” (ABA Guidelines 4.2.6.)

The Mediator’s Duties

A mediator must be impartial. “A mediator must maintain impartiality toward all participants in the mediation process at all times.” (California Rule of Court 1620.5(a); [all the Rules of Court concerning mediations apply only to court-ordered mediations].) Mediators should not have any substantial personal or business relationships with any of the parties and have a continuing duty to disclose potential areas of conflict that might affect their impartiality. (Rule of Court 1620.5(b).)

A mediator must not accept any gift that might raise a question concerning his or her impartiality. (Rule of Court 1620.9(d).)

A mediator does not represent the participants. “A mediator must inform all participants, at or before the outset of the first mediation session, that during the mediation he or she will not represent any participant as a lawyer or perform professional services in any capacity other than as an impartial mediator.” (Rule of Court 1620.7(d).) Note, too, regarding possible settlement options and terms, that “[a] mediator may also assist the parties in preparing a written settlement agreement, provided that in doing so the mediator confines the assistance to stating the settlement as determined by the parties.” (Rule of Court 1620.7(h).)

A mediator must disclose the receipt of compensation. “Before commencing the mediation, the mediator must disclose to the parties in writing any fees, costs or charges to be paid to the mediator by the parties. A mediator must abide by any agreement that is reached concerning compensation.” (Rule of Court 1620.9(b).)

The mediator’s fee cannot be contingent on the outcome of the mediation. (Rule of Court 1620.9(c).)

A mediator must self-assess his or her competence to conduct a mediation. Mediators must decline to serve in a mediation if they do not have the level of skill, knowledge or ability necessary to conduct the mediation effectively. (Rule of Court 1620.6(d).)

The mediation must be conducted in a procedurally fair manner. “‘Procedural fairness’ means a balanced process in which each party is given an opportunity to participate and make uncoerced decisions.” (Rule of Court 1620.7(b).) Note, however, that “[a] mediator is not obligated to ensure the substantive fairness of an agreement reached by the parties.” (Rule of Court 1620.7(b).)

A mediator should not combine a mediation and arbitration without the consent of the parties. (Rule of Court 1620.7(g).)

A mediator must advise about and comply with laws concerning confidentiality. Principles of confidentiality include advising the “participants with a general explanation of the confidentiality of the mediation process,” discussing the mediator’s practice regarding confidentiality for separate communications with the participants, and not disclosing information revealed by one party in confidence to another party unless authorized to do so by the revealing party. (Rule of Court 1620.4(b) and (c).) Further, “[a] mediator must not use information that is acquired in confidence in the course of a mediation outside the mediation or for personal gain.” (Rule of Court 1620.4(d).)

Joint Duties of the Mediator and the Lawyer

Confidentiality of mediations. Evidence Code Sections 1119, 1120, 1121 and 1122, as well as Foxgate Homeowners’ Association, Inc., 26 Cal.4th 1, and Rojas v. Superior Court (2004) 33 Cal.4th 403, provide confidentiality with few exceptions to the communications made at and exhibits prepared for and used in mediations.