On November 11, 2010, Stephen Blitch, an attorney, mediator, arbitrator, discovery referee gave a talk in East Palo Alto, CA on ethics in mediation. He mentioned that all the neutrals at ADR Services, Inc., where he worked were full time neutrals, without law practices.
Blitch said that attorneys were bound by professional conduct rules in their everyday life, including when they are in mediation. Mediation is a way for two or more parties to negotiate a settlement on a civil case, such as collections.
There is enormous growth in the mediation practice area because more cases are being settled rather than tried with juries. The justice system is becoming more private with fewer court trials and cases going on to appeal. New laws are not being made because there are not many cases going on appeal.
Blitch categorized civil cases into two categories: (1) trivial cases involving little public impact such as car accident cases, (2) public policy cases.
Blitch said being ethical and honest all the time is the best thing to do because when people start lying, they forget what they lied about, who they lied to. Lying is too much to remember.
In mediation, the California Evidence Code 1119 requires the mediation proceeding to be confidential. When someone signs up for mediation through ADR Services, Inc., there is also a contractual obligation to keep discussions and writings confidential. A mediator in a case that has already been filed with the courts can write to the judge in the case when he feels someone acts unethically during mediation. The judge might sanction an attorney for violating duties of confidentiality, candor, competence, conflicts.
Confidentiality requirements of an attorney are absolute unless there is a crime or fraud involved. Sometimes it might be best for the client to give less authority or information to an attorney so the attorney does not get into dilemmas on misrepresenting. An attorney can be liable for fraud if he makes a material fact relied on during mediation. Even when an attorney does not disclose something directly asked, there might be fraud. For example, if a creditor asked a debtor's attorney whether he had authority to settle for $500,000, the attorney might be caught in a lie if he had authority to do so, but wanted to bargain down to get the best deal for the debtor. When there is fraud, the plaintiff may seek punitive damages.
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