Rudolph & St. Pierre: Anyone worried about attorney-client privilege in mediation?

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By Ross E. Rudolph and Alyson M. St. Pierre

Your client wants to bring a nonparty friend/significant other/family member to mediation, but you worry that the presence of a nonparty will allow opposing counsel access to the substance of your mediation-related communications with your client. Is this worry justified?

Indiana ADR Rule 2.11(A) provides:

“(1) Mediation sessions shall be confidential and closed to all persons other than the parties of record, their legal representatives, and persons invited or permitted by the mediator.

(2) The confidentiality of mediation may not be waived.

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(3) A mediator shall not be subject to process requiring the disclosure of any matter occurring during the mediation except in a separate matter as required by law.

(4) This Rule shall not prohibit the disclosure of information authorized or required by law.”

This language suggests that mediation is unflinchingly confidential. And Indiana’s courts have preserved nearly inviolate the confidentiality of mediation. See Horner v. Carter, 981 N.E.2d 1210, 1211-13 (Ind. 2013); Fackler v. Powell, 891 N.E.2d 1091, 1097 (Ind. 2008); R.R. Donnelley & Sons, Co. v. N. Texas Steel Co., Inc., 752 N.E.2d 112, 129-30 (Ind. Ct. App. 2001); Marchal v. Craig, 681 N.E.2d 1160, 1163 (Ind. Ct. App. 1997). But see Gast v. Hall, 858 N.E.2d 154, 161-62 (Ind. Ct. App. 2006); Bridges v. Metromedia Steakhouse Co., 807 N.E.2d 162, 166-67 (Ind. Ct. App. 2004).

But how does the stalwart confidentiality of mediation “stack up” against attorney-client privilege? Would Rule 2.11 prevent the admission of statements made in separate mediation sessions even when attorney-client privilege is otherwise waived by the presence of a third party? Stated differently, does the confidentiality afforded a mediation under Indiana ADR Rule 2.11 as to “nonparties,” “persons invited or permitted [to attend] by the mediator” and “other necessary individuals” prevent the waiver of attorney-client privilege in a later case or controversy when those nonparties remain present during separate mediation sessions?

There are many situations where an individual may want to admit into evidence statements made at mediation. The obvious situation is after mediation fails, where opposing counsel may argue that communications made at mediation in the presence of a nonparty should be admissible. Still other situations arise. For example, a legal malpractice claim arising out of events that took place at a previous mediation.

Whatever the case, a party seeking to admit statements made during a previous mediation must contemplate various situational considerations. Imagine the following scenario: an adult plaintiff attends a mediation with her mother, a nonparty. The mother participates in opening session and remains at mediation in separate sessions with the plaintiff and her attorney. The case does not settle at mediation. Attorney-client privilege is waived for any discussions between the plaintiff and her attorney because of the presence of the mother, but a question remains regarding which conversations are confidential pursuant to Rule 2.11(A).

Indiana’s ADR Rules anticipate certain situations where confidentiality might remain intact. For instance, given Rule 2.11(A), the statements delivered in the joint opening session with all parties, counsel and mediator present would remain confidential even though attorney-client privilege is waived by the presence of multiple third parties. But Indiana’s ADR Rules and caselaw have not similarly addressed the impact the presence of nonparties has on the confidentiality of statements made during separate mediation sessions that may or may not involve the mediator. To tackle that issue, practitioners must look to the law of different states, which have similar mediation confidentiality provisions.

California addressed this issue in Cassel v. Superior Court, a case involving a petitioner who sued his attorneys based on events arising out of a mediation settlement. 51 Cal. 4th 113 (2011). The petitioner argued the mediation confidentiality statutes should not apply to “private discussions between a mediating client and attorneys who represented him in the mediation.” Id. at 118. These “private discussions” took place between the petitioner, his business assistant and his attorneys outside the presence of the mediator and other mediation participants. Id. at 121.

The court reasoned that a necessarily strict construction of the confidentiality statutes only allowed for disclosure when all participants to a communication consented, due process is implicated, or literal construction would produce absurd results. Id. at 124-25. No such exception applied. Id. at 128. The court stated, “All oral or written communications are covered, if they are made ‘for the purpose of’ or ‘pursuant to’ a mediation. It follows that, absent an express statutory exception, all discussions conducted in preparation for a mediation, as well as all mediation-related communications that take place during the mediation itself, are protected from disclosure.” Id. at 128 (internal citations omitted) (citing Cal. Evid. Code § 1119); see also Cal. Evid. Code § 1122. The court concluded the private discussions were confidential and reversed the lower court’s judgment. Id. at 138 (citing Cal. Evid. Code § 1119(a)). Additionally, the court refused to apply an implied waiver theory to the mediation communications similar to an implied waiver of the attorney-client privilege. Id. at 133.

The Arizona Court of Appeals agreed where the petitioner sued her attorney for malpractice arising out of a family court mediation. Grubaugh v. Blomo, 359 P.3d 1008 (Ariz. Ct. App. 2015). The petitioner argued the mediation process privilege was waived or inapplicable when her attorney sought to use “as evidence communications between herself and [petitioner], occurring during and after mediation, which led to [petitioner’s] ultimate acceptance of the dissolution agreement,” including communications outside the presence of the mediator. Id. at 1009-10.

The Arizona court reasoned that the confidentiality statute “provides for a broad screen of protection that renders confidential all communications, including those between an attorney and her client, made as part of the mediation process.” Id. at 1011. The only exceptions to such broad protection were those enumerated in the statute, none of which applied. Id. at 1010 (citing A.R.S. § 12-2238(B)). The court held “that the mediation process privilege applies in this case and renders confidential all materials created, acts occurring, and communications made as a part of the mediation process … .” Id. at 1013.

In light of the courts’ strong tendency to preserve the confidentiality of mediation and with these cases as guideposts, Indiana’s courts would likely uphold the confidentiality of mediation-related communications regardless of who is present.

Even though Indiana courts would likely not permit a waiver of confidentiality if an opposing party sought mediation-related communications between a party and her counsel that were made in a nonparty’s presence, to ensure such communications are unattainable counsel can: (1) prevent the nonparty from participating in separate sessions [based on the mediator’s discretion under ADR Rule 2.11(A)(1)], and/or (2) execute an agreement between all persons present at mediation, which explicitly states that confidentiality applies to all communications and any nonparty participation shall not be construed as a waiver of attorney-client privilege or confidentiality.•

• Ross E. Rudolph is a partner and Alyson M. St. Pierre is an associate at Wooden McLaughlin LLP. Opinions expressed are those of the author.