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Mediation confidentiality sinks malpractice lawsuit

Breach of confidentiality often plays a key role in legal malpractice claims. In a recent post, we discussed the link between violations of attorney-client confidentiality and legal malpractice.

Today, we explore how another sort of confidentiality worked against a client, preventing him from advancing a legal malpractice claim against his former attorneys.

The client in this case was involved in a business-related lawsuit. His attorneys represented him through two mediation sessions, which ended with a settlement agreement. Later, the client filed a malpractice suit claiming that his attorneys failed to negotiate more favorable terms in the agreement. He also alleged that they failed to advise him of certain unfavorable terms.

The attorneys raised a defense based on the confidentiality of mediation. They argued that neither side could produce any evidence — whether in support of or against the malpractice allegations — because the advice at issue took place during mediation.

In a recent ruling, a California Court of Appeals agreed. It noted that California law takes a strict stance on protecting the confidentiality of mediation. The parties are not even allowed to make inferences about what happened during mediation.

What does this mean for clients? Many cases are resolved through mediation, and attorneys play a key role in advising their clients throughout the mediation process. Strict confidentiality essentially shields lawyers from malpractice claims involving mistakes they may have made during mediation. The Court of Appeals recognized as much when it observed that, by choosing to participate in mediation, clients essentially give up their ability to later bring malpractice claims against their attorneys based on what happened during mediation.

It remains to be seen whether the California legislature will loosen the grip of mediation confidentiality in this important context.