By Abby Tolchinsky and Ellie Wertheim
September 7, 2007
It comes as no surprise to practitioners that, in a great
many areas of the law, litigation has been overwhelming the courts'
dockets. Mediation programs have proved an effective way to provide relief.
These run the gamut from court-mandated programs such as in the U.S. District
Court for the Eastern District of New York to programs such as Judicial
Arbitration and Mediation Services Inc. (JAMS). The mediators themselves may be
court employees such as magistrates, paid attorneys or retired judges, all of
whom have significant experience and training in a given area of the law.
Since the majority of the mediators providing services in the various mediation
programs are attorneys, a variety of issues arise out of the interplay between
these dual roles.
Neutral Mediator Shifting Roles
This article will address the circumstances under which a neutral mediator may
shift roles and then serve as an advocate for one of the parties to the
mediation, as well as when an attorney can also serve as a neutral mediator.
Shifting between these two roles necessarily raises questions surrounding
confidentiality in mediation. Specifically, how does information ascertained
through mediation advantage or burden each of the
parties when their advocate shifts to serve as their mediator, or vice versa?
Openness and freedom to express one's interests and concerns are the very
linchpins of communication in the mediation process. It is standard practice
that what transpires during a mediation, regardless of
the setting, and regardless of any subsequent action, remains confidential. Any
violation of this near-religious prohibition on disclosing information revealed
in mediation is subject to sanctions.
Bernard v. Galen Group,
involves an application for a preliminary injunction in federal court in a
patent, copyright and trademarks case. Defendants' counsel requested sanctions,
alleging that the plaintiffs violated the confidentiality of the court-ordered
mediation sessions. In granting sanctions, the judge relied on a previous U.S.
Court of Appeals for the Second Circuit decision discussing the importance of
confidentiality provisions:
If participants
cannot rely on the confidential treatment of everything that transpires during
[mediations] then counsel of necessity will feel constrained to conduct
themselves in a cautious, tight-lipped, noncommittal manner more suitable to
poker players in a high-stakes game than to adversaries attempting to arrive at
a just resolution of a civil dispute.1
The Administrative Dispute Resolution Act (ADRA), 5
USCA 574 (1996), mirrors this theory of openness and confidentiality in
mediation, while including a section outlining its protections and the
limitations. The intent behind this section illuminates the extent to which
confidentiality in the mediation process, while essential, must be balanced
against the need for fair and open discovery should any subsequent litigation
be necessary. Otherwise, confidential information garnered in mediation may be
obtained through the regular channels of discovery. The legislative history, at
S. Rep. 101-543, S. Rep. No. 543, at 3941, 101st Cong., 2nd Sess.
1990, provides that:
These protections are
created to enable parties to ADR proceedings to be forthcoming and candid,
without fear that frank statements may later be used against them . . . . At
the same time, these confidentiality provisions are not intended to frustrate
normal discovery in legal proceedings.
Statute: 'Can't Switch Hats'
The effect of this statute in practical terms is that once you have served two
parties to a dispute, as their neutral mediator, you cannot then switch hats
and serve as an advocate for one side. Indeed, the Code of Professional
Responsibility E.C. 5-20 (McK.Consol. Laws, Book 29
App, 2007), specifically proscribes the switch: "A lawyer who has undertaken
to act as an impartial arbitrator or mediator should not thereafter represent
in the dispute any of the parties involved." Having witnessed open
negotiations between the parties, having facilitated discussions and assisted
in analyzing a range of relevant data and documents, it is presumed that the
mediator's vast range of knowledge as to the strengths and weaknesses of each
side's case must remain confidential and cannot then be used as a sword against
one side.
In cases where switching roles from mediator to lawyer have been tested, courts
have consistently issued sanctions or disqualified counsel, generally noting
the necessity of protecting confidentiality during the mediation process. For
example, in Fields-D'Arpino v. Restaurant
Associations Inc., 39 FSupp2nd 412 (SDNY 1999), the court held that a law
firm and a particular lawyer who previously mediated a dispute between the
parties are disqualified from representing one of the parties to the mediation
in a subsequent court proceeding where the attorney attempted to use
information learned in the mediation as testimony against the other party.
The prohibition against revealing information learned in mediation, however, is
not without limitations. The ADRA incorporates an exception, allowing for
instances in which parties may draft mediation agreements that deviate from the
statutory requirements of near-absolute protection of information learned in
mediation, so long as the neutral mediator is informed of the agreement prior
to the commencement of the mediation. Additionally, if the parties decide on
alternative confidentiality procedures after they have begun the mediation
process, that agreement does not bind the mediator.2 Essentially, before a mediator can disclose information in a
subsequent court proceeding, the mediator must provide notice to all affected
parties and nonparties. They, in turn, have the opportunity to contest lifting
the veil of confidentiality.3
Confidentiality agreements between parties to a mediation can be drawn as an
extra layer of protection, adding further limits to discoverable evidence in a
subsequent court proceeding and will likely be upheld. In DeLuca
v. Allied Domecq Quick Service Restaurants 2006 wl
2713944 (EDNY), the court held that the statement in question would not have
been excluded under the ADRA because, it reasoned, the statement made in
mediation would have been admissible as the basis for a subsequent retaliation
claim, unrelated to the initial age discrimination claim. However, the parties'
separate confidentiality agreement stated that "all matters discussed in
the mediation are confidential . . . and cannot be used as evidence in any
subsequent . . . judicial proceeding" and drew a narrow exception to
confidentiality only on the basis of imminent danger or violence.
Switching roles from mediator to attorney may, in exceptional circumstances, be
permissible. In matrimonial law, for example, mediator confidentiality may, in
part, be cast aside. While the matrimonial mediator begins the relationship
with the parties by facilitating a negotiation regarding financial and
parenting decisions, at the close of the process, in order to obtain a divorce
based on their mediated agreement, documents need to be filed in court, with
the parties assuming the roles of plaintiff and defendant. In an ethics
opinion, NY
Eth. Op. 736, 2001 WL 670915 (N.Y. St. Bar Assn. Comm. Prof. Eth.), the
Committee on Professional Ethics reasoned that "an attorney-mediator may
prepare divorce documents incorporating a mutually acceptable separation
agreement and represent both parties only in those cases where mediation has
proved entirely successful, the parties are fully informed, no contested issues
remain, and the attorney-mediator satisfies the 'disinterested lawyer' test of
DR 5-105 (C)." However, the committee also warned that, because the
"disinterested lawyer" test is a difficult one to meet, the mediator
must not presume a lack of conflict at the outset of a
mediation. Rather, the mediator may offer to serve as the filing
attorney only on a case-by-case basis depending on whether "the parties
are firmly committed to the terms arrived at in mediation, the terms are
faithful to both spouses' objectives and consistent with their legal rights, there
are no remaining points of contention, and the lawyer can competently fashion
the settlement agreement and divorce documents." Thus, even where
switching roles from mediator to attorney is permitted, the threshold is high
and the circumstances are narrowly drawn.
Questions
There is significantly less guidance from the courts as to what procedural and
ethical restrictions apply for a lawyer changing roles to serve as a neutral
mediator between his (former) client and another party. Of course, all information
gleaned in the course of his representation of his client is confidential. But
how does that impact the attorney/mediator's ability to be neutral? What is the
effect on the clients, one of whom is experiencing a shift in the relationship
from advocacy to neutrality, the other of whom is entering into a new
relationship with the mediator, knowing that the other side already divulged
confidential information?
At a minimum, there must be a conversation among the mediator and the parties
regarding the fact that there was a pre-existing attorney-client relationship.
Furthermore, a conversation about the scope of confidential information and the
use, if any, of prior disclosures, needs to be considered fully by all sides.
Finally, an agreement among the parties and the mediator must be memorialized
in a detailed waiver designed to protect the attorney/mediator from being
embroiled in potential subsequent litigation. Unlike the prohibition against
mediators subsequently serving as attorneys, the Code of Professional
Responsibility, EC 5-20, allows that "A lawyer is often asked to serve as
an impartial arbitrator or mediator in matters which involve present or former
clients. The lawyer may serve in either capacity after disclosing such present
or former relationships."
Conclusion
It is worth noting that in at least one mediation model, the caucusing model,
the mediator has ex parte conversations with each side. While these
conversations are meant to facilitate the negotiations and settlement, they
generally involve the mediator learning from each side
information such as weaknesses in their case or negotiation strategy.
The mediator, upon request of the party, maintains the confidentiality of these
ex-parte communications. In this regard, the mediator who practices under the
caucusing model faces similar circumstances to an attorney who then becomes a
neutral mediator. Both must protect confidential communications while working
to facilitate an agreement that each party considers fair and reasonable in their
view of the conflict.
Abby Tolchinsky and Ellie Wertheim are partners at
Family Mediation.
Endnotes:
1. 901 FSupp 778, 784 (SDNY 1995), quoting Lake
Utopia Paper Ltd. v. Connelly Containers, Inc., 608 F2d 928, 930 (2d Cir.
1979).
2. 5 USCA 574 (d)(1).
3. 5 USCA 574 (e).