Nix Your Mediator's Prospective Waiver of Liability*
October 2008
Excellence in mediation requires considerable
skill. It also requires that the mediator use those skills in service of values
consistent with the values of clients. When selecting, reviewing, or comparing
mediators, it's important to pay equal attention to the mediators' values as
well as their skills.
by Jeff Kichaven
Professional Mediation
& Arbitration
How should an IRMI subscriber go about selecting a mediator? Sure, there
are some stock questions about a mediator's prior experience and training. A
mediator has to have a track record and demonstrated skill. We all know that.
But for the IRMI reader, there are some other, and special, inquiries as well.
You want a mediator who shares your basic values. Fortunately, there are some
easy ways to tell.
Prospective Waiver of Liability
A good start is the mediator's "confidentiality agreement." The forms used
by many mediators across the country are pretty similar, having been borrowed
back and forth from each other. And they contain some surprising statements
that have nothing to do with confidentiality. Most particularly, look out for
this sentence:
All parties agree that the mediator has no liability for any act or omission
in connection with the mediation.
This statement—a "prospective waiver of liability"—demonstrates that the
mediator does not share the IRMI subscriber's basic values. Let's be clear about
exactly what this sentence means. Unvarnished, here it is:
Dear Mediation Participants:
In the unlikely event that I commit malpractice that causes you financial
damage—and even though I carry malpractice insurance so that you can be
compensated without causing me to suffer financial ruin—it is personally
important to me that you do not receive
that compensation.
IRMI subscribers, and most Americans for that matter, believe that nobody
is above the law. The bedrock role of this value in American society is well-summarized
in this Wikipedia entry:
The
Rule of Law, in its most basic form, is the principle that no
one is above the law.
Thomas Paine stated in his pamphlet
Common Sense (1776): 'For as in absolute governments the king is law,
so in free countries the law ought to be king; and there ought to be no
other.'
Even Paris Hilton gets it. Consider her
comments during her 2007 imprisonment/probation debacle:
No one is above the law. I surely am not. I do not expect to be treated
better than anyone else who violated probation. However, my hope is that
I will not be treated worse.
Yet a mediator's "prospective waiver of liability" is precisely the mediator's
effort to place herself above the law if her conduct falls below the standard
of care and proximately causes damage. If that happens—unlikely though it may
be—why should the mediator not be held accountable? If anything goes that far
amiss during the mediation, you want a mediator you can hold accountable and
from whom (or whose insurer) you can receive compensation.
Liability Waivers and Professional and Public Policy
If an IRMI subscriber who practices law in California tried to impose a "prospective
waiver of liability" on his clients, that lawyer would be subject to professional
discipline by the State Bar for unethical conduct. Rule 3-400 (A) of the California
Rules of Professional Conduct provides:
3-400. Limiting Liability to Client.
A
member shall not:
(A) Contract with a client prospectively limiting the
member's liability to the client for the member's professional malpractice;
…
Elsewhere in the country, lawyers' attempts to impose prospective waivers
of liability on clients are disfavored. Compare, Rule 1.8(h)(1), ABA Model Rules
of Professional Conduct:
A lawyer shall not make an agreement prospectively limiting the lawyer's
liability to the client unless the client is independently represented in
making the agreement.
In our society's other great learned profession—medicine—public policy prohibits
physicians and hospitals from seeking prospective waivers of liability as a
condition of treatment. Tunkl v. Regents of the University
of California, 60 Cal. 2d 92 (1963).
These prohibitions reflect what the California Supreme Court just last year
called "(t)he traditional skepticism concerning agreements designed to release
liability for future torts." City of Santa Barbara v.
Superior Court, 41 Cal. 4th 747 (2007), slip op. at 8. Rather, the "public
policies underlying our tort system" require that:
as a general matter, we seek to maintain or reinforce a reasonable standard
of care in community life and require wrongdoers—not the community at large—to
provide appropriate recompense to injured parties.
Id., slip op. at 7.
This is consistent with the important national public policies that have
always been behind tort litigation:
Negligence rules both regulate misconduct and protect against harm caused
by that misconduct. For example, tort liability for negligence has the effect,
and to a degree the purpose, of regulating a defendant's future conduct.
It is a policy of negligence law to allow a person to recover for an injury
that was proximately caused by another's duty of reasonable care.
Observation: The policy reason supporting a cause of action for negligence
is to discourage or encourage specific types of behavior by one party for
the benefit of another party....
[57A Am. Jur. 2d, Negligence section 1.]
Worse, most mediators are lawyers, and many are still active members of their
respective state bars. If practicing law in California, Rule 3-400(A) would
bar them from imposing prospective waivers of liability on their law-practice
clients. Of course, when mediating rather than practicing law, 3-400(A) does
not apply to their conduct. But, by imposing such waivers when mediating, these
lawyers are announcing to the world that they have voluntarily lowered their
own ethical standards when they change hats from law practice to mediation practice.
And, by agreeing to such waivers, litigators are announcing that they have just
settled for a professional who adheres to ethical standards less stringent than
their own.
Still worse, many mediators' prospective waivers of liability are flat-out
unlawful. They purport to release responsibility for "any act or omission,"
the intentional as well as the negligent. California Civil Code section 1668—unchanged
since its adoption in 1872—does not allow this overreaching:
All contracts which have for their object, directly or indirectly, to exempt
any one from responsibility for his [or her] own fraud, or willful injury
to the person or property of another, or violation of the law, whether willful
or negligent, are against the policy of the law.
Finally, many of these prospective waivers of liability are preceded by a
statement that they are imposed "in order to promote communication among the
parties and the mediator and to facilitate settlement of the dispute…." In fact,
just the opposite should be true. Much of the success of mediation depends on
confidential, caucus communications between counsel and the mediator. The effectiveness
of the communication is said to depend on its candor, and its candor is said
to depend on its confidentiality. What policy best promotes that confidentiality?
A policy that lets the mediator know that there are consequences if the confidentiality
is breached—the very antithesis of the result of a prospective waiver of liability.
The prospective waiver of liability is a misguided effort at risk management
by mediators. It lets mediators off the hook from performing ethically and even
competently. It is doubly insensitive in light of the reach of the mediation
confidentiality statutes such as the California Evidence Code section 1115
et seq., which precludes introduction of
evidence of malpractice that takes place in a mediation, and thus functions
as the equivalent of an immunity statute. Compare, Wimsatt
v. Superior Court, 152 Cal. App. 4th 137 (2007) and especially Justice
Aldrich's critique of the statute, slip op. at 30-32. Regrettably, mediators
may not even need a prospective waiver of liability to let themselves off of
the hook of competence.
Conclusion
On superficial review, a prospective waiver of liability looks like a pretty
good thing to have, so it has survived, reflexively but not thoughtfully, from
generation to generation of mediators' form documents. This should not be allowed
to continue. Insurers—who employ both litigators and mediators—could stop tolerating
prospective waivers of liability from mediators, just as, I am sure, they do
not grant prospective waivers of liability to law firms.
Hold your mediators to the same standards as you hold your lawyers, and let
the litigators who serve you know of this insistence.& When you require mediators
to stand behind the quality of their work, the quality of the services you receive
from mediators can only improve.
*A previous version of this article appeared in "Advocate:
The Journal of Consumer Attorney Associations for Southern California."
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