Mediation Communications Inadmissible in Attorney Malpractice Suit
By Pamela Sakowicz Menaker, Litigation News Contributing Editor – March 16, 2016

Mediation communications are privileged and may not be introduced to prosecute or defend against a professional malpractice claim, according to Grubaugh v. Blomo. In Gubaugh, an appellate court held that an attorney could not rely upon privileged mediation communications in support of her defense, and dismissed the former client's malpractice claims based upon those communications. The case highlights an existing jurisdictional split between states that allow an exception to mediation confidentiality laws with respect to malpractice claims and those that do not.

Application of Arizona's Mediation Privilege Statute
In Grubaugh, a client sued her former attorney for allegedly substandard advice provided during a family court mediation. The attorney sought to introduce attorney-client communications with her client and the mediator during and after the mediation and filed a motion to deem the mediation privilege waived by plaintiff's filing of the malpractice suit. Alternatively, the attorney moved strike the plaintiff's allegations based upon the mediation.

Mediation communications are privileged under Arizona Revised Statute Sect. 12-2238(B). The Arizona statute provides that the mediation process is confidential and that the communications made during a mediation are confidential unless all of the parties agree to the disclosure or the communication is relevant to a claim or defense made by a party to the mediation against the mediator or mediation program. Additionally, the statute specifies that a mediator may not be compelled to testify or provide testimony relating to mediation proceedings.

The trial court granted the attorney's motion, finding the mediation privilege waived as to all communications between the parties and the mediator, and between the former client and his former attorney. The trial court reasoned that Arizona's statute did not directly address the issue presented, and analogized the circumstance to the implied waiver of the attorney-client privilege by filing a malpractice suit.

No Implied Waiver of Mediation Privilege by Filing Malpractice Suit
The appellate court reversed and remanded, ruling there was no waiver of the mediation privilege because none of the statutory exceptions applied. It refused to find an implied waiver, explaining that "[b]y expressly shielding the entire mediation process, other than when an exception provided by the statute applies, [the statute] 'occupies the entire field' of methods by which the mediation process privilege might be waived." The appellate court also rejected comparisons to the implied waiver of the attorney-client privilege, because Arizona's attorney-client privilege law expressly contains a provision consistent with the implied waivers allowed under common law. The appellate court observed that its decision furthered public policy encouraging settlement, and protected the other party to the mediation, who had not waived the privilege.

The appellate court further held that the plaintiff's mediation-based claims should be stricken. The appellate court explained that "[t]o hold otherwise would allow a plaintiff to proceed with a claim, largely upon the strength of confidential communications, while denying the defendant the ability to fully discover and present evidence crucial to the defense of that claim." In so holding, the appellate court mainly relied upon the California Supreme Court's ruling in Cassel v. Superior Court, which construed a substantially similar mediation privilege statute. The Cassel court granted the defendant attorney's motion to exclude all evidence related to the mediation because California's statute precluded an implied waiver of the mediation privilege, even if that effectively defeated the former client's claim.

Split over Waiver of Mediation Privilege and Implications for Practitioners
Highlighting a jurisdictional split, the appellate court in Grubaugh stated that the Arizona legislature could have exempted mediation proceedings where used to prosecute or defend claims of professional malpractice arising out of the mediation as have other states but elected not do so. According to a 2014 memorandum issued by the California Law Revision Commission, nineteen states and the District of Columbia have exceptions to their mediation privilege laws where “alleged attorney misdeeds or alleged professional misdeeds more generally.”

ABA Section of Litigation leaders agree that the appellate court in Grubaugh interpreted the statute correctly and reached the right result. Due to the prevalence of mediation, however, Section of Litigation leaders believe that those states that do not presently provide an exception for malpractice claims may want to reconsider their position. By excluding mediation communications, “both the client and the lawyer are forced to litigate with an incomplete record, often making the claim and the defense impossible,” explains Hon. Bruce E. Meyerson (ret.), Phoenix, AZ, member of the ABA House of Delegates and a former chair of the Section of Dispute Resolution.

“This case was the result of strict statutory construction,” agrees Don W. Bivens, Phoenix, AZ, former chair of the Section of Litigation. “The legislature, in its wisdom, passed a statute that left the court with no viable option. The legislature may want to take a second look.”

Additionally, the Arizona statute may be inconsistent with Rule 1.6(b)(5) of the Model Rules of Professional Conduct, according to John M. Barkett, Miami, FL, cochair of the Section’s Professional Development Committee. Arizona, which has adopted the Model Rules, states in its Rule 1.6(d)(4): “A lawyer may reveal such information relating to the representation of a client to the extent the lawyer reasonably believes necessary: . . . (4) to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client . . . or to respond to allegations in any proceeding concerning the lawyer’s representation of the client.”

Until there is legislative reform in states that do not allow waiver of the mediation privilege to defend malpractice claims, practitioners in those states will be limited to introducing evidence of discussions prior to or after mediation unless there is an agreement to waive mediation confidentiality, notes Meyerson.

Keywords: mediation privilege, attorney-client privilege, confidentiality, malpractice

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