TX: Underlying mediation
Facts: The client hired attorney to represent her in litigation against a contractor. The suit settled at mediation where the parties entered into a settlement agreement. All claims between client and the contractor were settled with the exception of attorney’s fees and costs in the underlying litigation. Attorney’s fees and costs were left to the trial court to determine. The client sued attorney for malpractice after the court ruled that the parties would be responsible for its own costs and attorney’s fees. The client alleges malpractice for the failure to disclose the risks and benefits of settlement, including that the trial court could deny attorney’s fees. The attorney claims that the client was fully disclosed the risks and benefits of settlement, including the risk that the court could deny attorney’s fees. The attorney claims that the only people privy to the discussion and disclosure were attorney, client and the mediator. The court did not allow the mediator to testify on the basis of the confidentiality provisions contained in the statute governing mediations.
Issue: Whether the mediator should have been allowed to testify to the substance of the disclosure made during mediation between attorney and client?
Ruling: The policy of this state is to encourage peaceful resolution of disputes through mediation and confidentiality is critical to the success of the mediation process. One cannot search relief in court on the basis of privilege and deny a party the benefit of evidence that would materially weaken or defeat claims against her. Before a party may be found to have waived an asserted privilege the court must determine that: the party asserting privilege is seeking relief from the court, the privileged information sought is all likely outcome determinative of the suit, and disclosure of the confidential information is the only means by which the aggrieved party may obtain evidence. The client sought relief in the form of a money judgment from the attorney. The mediator’s testimony in this case would be crucial in establishing the advice rendered, or not rendered, by attorney to client. Finally, due to the fact that only those three were present, the mediator’s testimony is the only means attorney can obtain and present unbiased and critical information to the court. It is only fair to require the client either to abandon her claim of confidentiality or abandon her claim of legal malpractice.
Lesson: The confidentiality privilege in mediation may be waived where the testimony is outcome determinative and the only means opposing party may obtain evidence.