Legal and Ethical Issues in Mediation

Legal and Ethical Issues in Mediation

• An Important Preface
• Confidentiality
• Mandatory Mediation
• Mediators
• Attorney Advocates
Lesson Three defined mediation, listed some of the most common mediation strategies, and described the five stages of mediation. In Lesson Four, we will discuss some of the contemporary legal and ethical issues surrounding the selection and use of mediation as a dispute resolution tool, including challenges with confidentiality, mandatory mediation, and the duties of mediators and attorney-advocates in mediation proceedings.
An Important Preface
One important thing to note at the onset of this discussion is that rules and principles regarding the ethical practice of mediation are still in a relatively early state of evolution. Few mediation parameters are codified by law (neither statutory nor common), and there is hardly precise consistency between court systems on many of these issues. Thus, it is important that HR professionals keep in mind while reading the following lesson material that many of the issues addressed are amorphous and ambiguous, and the actual legality of one practice versus another may largely depend on the jurisdiction and the degree of talent borne by the advocates on each side of the argument. As a distinguished Florida A&M University law professor frequently tells his new law school students, “Welcome to the law!”

Confidentiality can be a very nebulous subject in any alternative dispute resolution context, not least of which in mediation. The reality of many mediation situations is that disputants either are ready to sue or already have sued and are engaged in mediation under court order. In a typical litigation process, the discovery stage involves vigorous fact-finding by both sides in hopes of gathering useful evidence for use at trial, so it is easy to understand why parties attending mediation might be apprehensive about disclosing any information in the accompanying dialogue which might otherwise be protected by the formal rules of evidence in a court system. However, mediation isn’t likely to be effective if the disputants are more concerned with secrecy and their own defense than they are with reaching a mutually acceptable compromise. As a result, the federal court system and many state jurisdictions have adopted rules of evidence.
Rules of evidence provide that any discussions held in furtherance of negotiation or settlement (a category in which all mediation proceedings clearly fall) cannot be used in a court of law, should such negotiations fail and the matter subsequently go to trial.

There are, however, several ways in which such confidentiality privileges may be waived or otherwise overridden. If the parties consent to the release of such information, this is typically an acceptable means, although the consent must be mutual; a unilateral desire to publicize mediation information will not suffice. Additionally, some scholars might argue that mediators also have the right to object to a confidentiality waiver, on the grounds that their testimony might later be used in court as evidence to favor one disputant or the other. Whether or not mediators can legally prevent parties from waiving confidentiality is unclear, and rules vary by jurisdiction (Rosenberg, 1986).
Aside from a consensual waiver of confidentiality by the parties (and/or mediator), another important exception to normal confidentiality practice is the public policy that safety and crime deterrence take priority over such privileges. For further understanding, please read the following example.
For example, if a disputant discloses during mediation that he or she committed a crime or intends to commit a crime, this type of divulgence is usually exempt from confidentiality restrictions, the reasoning being that society values the preservation of order and public safety over an individual’s right to privacy. There are strong implications here of fifth amendment self-incrimination violations. However, given the theoretically voluntary nature of mediation, the merits of such a claim are unclear at best.
Mandatory Mediation
What about when mediation is not voluntary? There is a strong argument to be made that compulsory mediation (e.g. by way of court order or by coercion) violates an individual’s fourteenth amendment right to due process with respect to the law. Surely, court systems have legitimate reasons for wanting to compel mediation (Moberly & Moberly, 1994). Alternative dispute strategies in general dramatically reduce the pressure of overloaded court dockets as well as the public cost of legal remedial action. Additionally, studies have shown that even parties who entered mediation with the presupposition that it would be a futile effort were often pleasantly surprised by the process’s ability to inspire compromise and satisfactory settlement (Dean, 1989). However, this does not alleviate the fact that court-mandated mediation denies the disputants of their right to pursue civil litigation, if only temporarily.
Further, if mediation is inherently a non-binding effort (and it is), then must a party who has no interest in compromise still attend mediation? If they must attend, must they also participate? If they must participate, how much? And for how long? Again, these questions are not at all clearly answered in the current paradigm of mediation law and policy, and these are just scratching the surface of the complex ethical issues at hand here. Here is a quandary from an entirely different angle: if a party wishes to have his or her legal counsel attend court-mandated mediation as an attorney-advocate, and the mediation fails, should the court be responsible for the fees that the attorney charges the client for that representation? Here’s one more: think back to the issue of self-incrimination addressed in the ‘confidentiality’ section supra; if mediation is compulsory and a party incriminates him or herself therein, is he or she immune from prosecution by virtue of a fifth amendment violation?
A similar situation of mandatory mediation arises not by court order, but instead by agreement between the parties. Now, one might reflexively assert that any agreement freely made between parties should stand to bind them to all terms therein, including mandatory mediation if applicable. However, the unconscionable cases arise when the bargaining power of the parties is so grossly imbalanced that contract provisions may become coercive simply by virtue of the leverage wielded by one party over another. These types of agreements are often referred to as “adhesion contracts”, wherein one party disproportionately controls the nature of agreement terms.
Adhesion contracts are commonly used between large commercial entities and their consumers (e.g. a consumer contract between a cell phone subscriber and a multi-billion dollar cellular phone service carrier). In these cases, again, it could be argued that such consumers had a choice not to enter such agreements, and therefore should be held accountable for all promises made. However, the lack of bargaining power and other factors such as available alternatives make these types of agreements very suspect. Although adhesion contracts are not per se illegal, courts will generally closely scrutinize their terms and clauses under the doctrine of reasonable expectations, and strike any provisions that violate this rule. Thus, the legality of a contractual obligation to mediate will usually rest on whether the relevant court would find such an obligation to be reasonably expected by both parties.
Aside from the issues of confidentiality and voluntariness in mediation, there are also several ethical issues with respect to the duties of mediators and attorney-advocates in the mediation practice. Several concerns arise with respect to mediators, their fitness for service in such capacities, and their duties in the process. First, it is important to note that mediation has been distinguished from the formal practice of law by the American Bar Association. Thus, non-attorneys may technically serve in the role of mediator where credentialed and otherwise eligible. However, it is important to note that while the American Bar Association’s position as a guiding organization in the legal practice would likely be persuasive evidence in a court, it is not a regulating governmental entity, and thus their policies do not have the same weight or effect as law.
Even though mediation itself has been construed as different from practicing law, giving legal advice and/or participating in other activities commonly reserved to the role of legal counsel in a mediator capacity can easily breach the boundary of legal practice, and that can have profound repercussions. For non-attorneys, the unauthorized practice of law is illegal, and can result in civil and/or criminal liability. However, even for attorneys serving as mediators, engaging in the practice of law while functioning as a mediator may constitute a breach of an attorney’s professional responsibilities for candor and loyalty.
Assuming mediators are not engaging in legal practice while mediating, they must also be both impartial and neutralwith respect to the matter being handled. Some examples might serve to illustrate. Suppose a mediator accepts a request to mediate a dispute between two parties, but one of the parties is a former client of the mediator’s law firm. It is likely that the mediator would be unfit here, for lack of impartiality. On the other hand, changing the facts slightly, suppose the mediator has no past history or bias toward either disputant, but the dispute itself is concerning, say, a claim of disability discrimination, and the mediator is a disabled person and an activist for protections for the rights of disabled people. Here, the mediator is also likely to be unfit, but this time for lack neutrality regarding the issue itself.

Attorney Advocates
Lesson Two supra explained some of the obligations of attorneys in Alternative Dispute Resolution (ADR) generally. As discussed therein, it is not necessarily a legal obligation for attorneys to discuss ADR options with their clients, but it is typically recommended that attorneys do so in the interest of competent client advocacy. However, notwithstanding a duty to discuss ADR at all, if mediation is pursued by the attorney’s client, or if mediation is mandated by court order or contract as discussed in the ‘mandatory mediation’ section supra, then attorneys run into yet another conflict: the duty of vigorous advocacy. Commensurate with their duties attorneys also have a duty to use best efforts and zealously defend their client’s interests in pursuing the best possible outcome for the client. Mediation, however, subordinates the selfish interests of individual disputants in favor of pursuing a healthy compromise that is fair, if still less than optimal for either party. Thus, it seems that the very philosophy of mediation runs antithetical to the purpose of attorney advocacy, and so although attorneys may be asked to represent their client’s interests in mediation, their duties in some sense preclude them from accepting any compromise that is short of the calculated value of a victory which the attorney reasonably thinks he or she might be able to attain through formal litigation (Sternlight, 1998).
In this lesson, we reviewed some of the most prominent contemporary legal and ethical issues surrounding the practice of mediation, including challenges with confidentiality, mandatory mediation, and the duties of mediators and attorney-advocates in the process. In Lesson Five, we will introduce the concept of arbitration as another ADR tool.

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