Friday, January 28, 2011

Maryland’s Circuit Court Mediation Program: Changes to Rule 17

Title 17 of the Maryland Rules is currently the basis for the State Circuit Courts mediation programs. It defines various Alternative Dispute Resolution (ADR) processes, establishes general procedures for all court-annexed ADR procedures in Maryland, establishes minimum qualifications for ADR practitioners in court-annexed programs and establishes confidentiality protections for court-annexed ADR proceedings, among other provisions.

The ADR Subcommittee of the Maryland Conference of Circuit Court Judges is currently considering changes to Maryland Title 17 so it is timely and useful to take a look at experience in other states.

F. Peter Phillips, a commercial arbitrator and mediator and former Senior Vice President of the International Institute for Conflict Prevention and Resolution (CPR Institute), has written an interesting blog about New Jersey’s experience with its court-annexed mediation program. In many important aspects the New Jersey program and the Maryland programs are similar, so the lessons in New Jersey can and should inform the deliberations in Maryland.

According to Phillips, there are many problems with the New Jersey program including:

· A low rate of resolution and docket-clearing (around 30%);

· Failure to receive mediator reports within the time limits;

· Excessive time spent by court administrators filing paperwork, tracking down delinquent mediators, granting extensions of time and preparing OSCs for relatively small fee amounts;

· Other demands on court administration in support of a program that, in a time of resource constraints, is less mission-critical than other court operations;

· The court mediation programs constrain the growth of a quality-driven market in the State;

· Both good and poor mediators can have the same number of assignments, resulting in many parties and counsel having poor experiences in mediation (”The last mediator I had just wanted to split the baby.”); and

· As a consequence, mediation is considered “do-gooder” volunteer work for retirees and wanna-bes, not requiring professional skills (”So what do you do for a living, Mr. Mediator?”)

The bottom line, according to Phillips, is a program that:

on its face, looks like it would promote mediation and result in a deep pool of highly experienced mediators, while reducing judicial caseloads, actually has resulted in increased administrative burden to the courts; no demonstrable increase in rate of settlement (99% of civil cases in New Jersey settle whether or not they are mediated) and a derisive attitude towards mediation by the litigation bar.

Does this sound familiar to Maryland practitioners?

Now is the time for Maryland to change its court-annexed ADR program so that it works for the parties, for the courts and for the mediators. As Phillips suggests, court-annexed mediation should be designed so the parties – not the courts – chose the mediators (if they cannot agree, mediators should be drawn from a select and pre-approved roster based on their experience in the type of case), and paid by the parties at market rates for their professional services.

As Phillips succinctly states:

Mediators who overcharge are dealt like mechanics who overcharge — they don’t get re-hired. Settlement rates are higher; the process is taken more seriously because the participants are paying for it; mediator reputations are subject to a robust, quality-driven professional market; and the court doesn’t involve itself in anything other than receiving a yes/no report at the end.

The Maryland Conference of Circuit Court Judges should pay close attention to how the Maryland program is designed, including how mediators are selected and compensated. Proper incentives and program design will make a major difference in whether court-annexed mediation in Maryland works for the parties or not. Currently many attorneys see the Maryland program as a joke.

Thursday, January 20, 2011

Unintended Consequences of Strict Mediation Confidentiality Statutes

The California Supreme Court has recently held that private communications between an attorney and client taking place in connection with a mediation remain confidential even when the disclosure is by the client to show alleged malpractice by the attorney.

Michael Cassel sued the lawyers who represented him during mediation for malpractice, breach of fiduciary duty, fraud and breach of contract, alleging that his lawyers improperly induced him to settle for less than he wanted and less than the case was worth. The lawyers moved to exclude all evidence of private attorney-client communications, even though, being the client’s privilege, such communications could be disclosed by the client.

Because the communication occurred during mediation, the California Supreme Court in Cassel v. Superior Court, No. S178914, (Cal. Jan. 13, 2011), interpreted the plain language of Section 1119 of the California Evidence Code and refused to order disclosure stating “[w]e have repeatedly said that these confidentiality provisions are clear and absolute. Except in rare circumstances, they must be strictly applied and do not permit judicially crafted exceptions or limitations, even where competing public policies may be affected… .” (Id. at p. 3)

This is a perverse and unjust result dictated by the overly broad and prescriptive language of the statute.

I agree with the concurring opinion:

The court holds today that private communications between an attorney and a client related to mediation remain confidential even in a lawsuit between the two. This holding will effectively shield an attorney’s actions during mediation, including advising the client, from a malpractice action even if those actions are incompetent or even deceptive. (See maj. opn., ante, at p. 28, fn. 11.)…. This is a high price to pay to preserve total confidentiality in the mediation process.

While the Court may have been right to apply the language of the statute as written, I believe this is an example of the Legislature paying attention to only one concern – the benefits of confidential mediation communications – and overlooking possible circumstances when confidentially should NOT be protected. There are better ways to balance the competing interests of protecting mediation confidentiality rather than simply providing that statements made during mediation can never be disclosed.

The Uniform Mediation Act does a better job of balancing the various interests involved. Section 6(a)(6) of the Act specifically exempts information “…sought or offered to prove or disprove a claim or complaint of professional misconduct or malpractice filed against a mediation party, nonparty participant, or representative of a party based on conduct occurring during a mediation….”

Similarly, if mediation is really a profession (it is), then mediators must be liable for their own misconduct. The UMA recognizes this in Section 6(a)(5) which, as in subsection (6), excludes from protection information “sought or offered to prove or disprove a claim or complaint of professional misconduct or malpractice filed against a mediator….”

California’s strict confidentiality approach should not be followed for at least two good reasons. First, as in Cassel, it can and has produced unjust and unfair results. Second, over time such unjust results will result in a backlash giving support to those who would abolish mediation confidentiality entirely.

Tuesday, January 11, 2011

Should Attorneys Be Required to Inform Clients of the Availability of Mediation as an Alternative to Litigation?

There has been some controversy about whether attorneys should ethically be required to inform clients about the availability of mediation as an alternative to litigation. Many state ethical codes recommend that lawyers advise clients about mediation (and other appropriate ADR options). See, for example, the Maryland Lawyer’s Rules of Professional Conduct, specifically the comment to Rule 2.1 “…when a matter is likely to involve litigation, it may be necessary under Rule 1.4 to inform the client of forms of dispute resolution that might constitute reasonable alternatives to litigation.” (Emphasis added).

Other states, such as Virginia, require lawyers to advise clients about the appropriateness and availability of ADR. See Virginia State Bar Professional Guidelines, Rule 1.2 Comment on Scope of Representation.

Recently the New York State Bar Association entered the debate over the expanding role of ADR; it referred back to the committee for further work and discussion, a proposal that would require lawyers to notify their clients of mediation as an alternative to litigation. The proposal was supported by the Bar Association’s Dispute Resolution Section, whose complete report is available here.

In my opinion, client interests generally are served best if the attorney provides advice on the full range of options. But is it malpractice or an ethical violation if they fail to do so?

What do you think? Should attorneys be required to advise clients about alternatives to litigation?