On or immediately after May 1, 2018, the South Carolina General Assembly will most probably have approved the South Carolina Supreme Court’s Order of January 31, 2018, making substantive and impactful revisions to Rule 8 of the South Carolina Alternative Dispute Resolution Rules (SCADR); and I believe, at least from my perspective, that the South Carolina family court practitioners should be aware that there may be certain “unintended consequences” resulting from these Rule 8 revisions.
SCADR Rule 8 is, and has been from its inception, the Rule governing the confidentiality of the mediation process. Currently, Rule 8 begins by stating that “(C)ommunications during a mediation settlement conference shall be confidential”; and then the Rule moves forward from there.
The genesis for the “revised Rule 8” most probably came from the fairly recent case of Huck v. Avtex Commercial Properties, Op. No. 5500 (S.C. Ct.App. refiled on March 28, 2018), where one of the appellate issues focused on the appellant’s effort to disclose and introduce at trial a purported agreement which had been reached by the parties during their mediation; and in addressing that particular issue, the South Carolina Court of Appeals stated the following, in pertinent part:
“We find the trial court erred in denying Avtex’s motion to disclose settlement. The documents referred to in Rule 8 are designed to protect any documents prepared for use by the mediator and the parties to the mediation itself. Once the parties reach a settlement, documents prepared in conjunction with the settlement and release are not for the purpose of, or in the course of, mediation. Rather, they are documents prepared in connection with the litigation and to bring the litigation to a close. Rule 8 is designed to protect the communications made during the mediation itself and to protect the process. The parties’ mediation agreement reinforces the rule and simply incorporates the same language. The request for production of the settlement documents does not disclose confidential information from the mediation (i.e., it does not disclose or discuss information the parties utilized to reach the settlement). Further, any confidential matters the parties do not want disclosed can be protected through court proceedings including confidential provisions.” (Emphasis added)
Our Supreme Court’s ordered revisions to SCADR Rule 8 are intended to offer more clarity (1) as to parameters of “confidentiality” during the “course of the mediation proceeding”, and (2) as to what can, will – or might – fall outside these “confidentiality parameters”. And so with that stated, I would like to try and breakdown, section-by-section, the revisions to Rule 8 which will now govern the mediation process beginning around May 1, 2018, and I have tried to emphasize in bold lettering the “new revisions” from the current SCADR Rule 8, and then provide some brief “comments” regarding each of these revisions:
Rule 8 – Confidentiality – (a) Confidentiality. Any mediation communication disclosed during a mediation, including, but not limited to, oral, documentary, or electronic information [See: Comment #1, below], shall be confidential, and shall not be divulged by anyone in attendance at the mediation or participating in the mediation, except as permitted under this rule or by statute. [See: Comment #2, below] Additionally, the parties, their attorneys and any other person present or participating in the mediation [See Comment #3, below] must execute an Agreement to Mediate that protects the confidentiality of the process. The parties and any other person present or participating shall maintain the confidentiality of the mediation and shall not rely on, or introduce as evidence in any arbitral, judicial or other proceeding, any mediation communication disclosed in the course of a mediation, which shall include, but not be limited to: (1) Views expressed or suggestions made by another party or any other person present with respect to a possible settlement of the dispute; (2) Admissions made in the course of the mediation proceeding by another party or any other person present; (3) Proposals made or views expressed by the mediator; (4) The fact that another party had or had not indicated willingness to accept a proposal for settlement made by the mediator; and (5) All records, reports or other documents created solely for use in the mediation or received by a mediator while serving as a mediator [note: See Comment #7, below].
[Comment #1: In moving forward, it might become easier for the reader to visualize a “mediation proceeding” as occurring within a two-sided frame, such that, the mediation proceeding formally starts or commences when the mediator says it “starts”, and it formally “ends” when the mediator says it has ended. Consequently, within the “visualized frame”, the first sentence in the revised Rule 8 more specifically identifies a “mediation communication” to include “oral, documentary, or electronic information” which has been shared among, and utilized by, the parties and the mediator during the mediation proceeding. And all of those “mediation communications” – which have been shared, occurred, or transpired, within the mediator’s time-frame – are strictly confidential.]
[Comment #2: The revised Rule 8 has now specifically identified those mediation “participants” who (a) are required to execute the mediator’s “Agreement to Mediate” and (b) are strictly governed by the confidentiality of the mediation proceeding – i.e., “the parties, their attorneys and any other person in attendance or participating” in the mediation. This should now require the mediator to make certain that anyone inside the mediation conference rooms from the “start-to-the-end” of the mediation – i.e., the parties, their attorneys, any of the parties’ relatives/friends, the attorneys’ paralegals and/or administrative assistants, and any guardians ad litem – ALL sign the Agreement to Mediate.]
[Comment #3: The revised Rule 8 has now created a new, expanded “class” of persons who are included within the “cone of confidentiality”; for example, any individual who might be “participating” in the mediation proceeding shall be required to maintain the confidentiality of any of the mediation communications. And to this point, let’s assume that your court-appointed Guardian ad Litem (GAL) has either been “invited” by the attorneys to attend the mediation or simply decides to attend the mediation and is not otherwise “banned” by your mediator from the mediation proceeding; let’s further assume that during the course of the mediation, one of the parties reveals some “facts” – whether alarming or not – which were otherwise unknown to your GAL, but which the GAL now regards as highly relevant within the case moving forward. Under the revised Rule 8, as a “participating party” to the mediation, your GAL would now be completely precluded from relying upon, including in a report, or in any manner using any of the party’s “new revelations” in the event the mediation ended in an impasse and the case proceeded to trial.]
(b) Waiver of Confidentiality. Upon the signing by the parties of an agreement reached during mediation, confidentiality is waived as to the terms of the agreement, unless otherwise agreed to by the parties. [See Comment #4, immediately below]
[Comment #4: The “Waiver of Confidentiality” provision is new…and, for the family law attorneys, it will most probably create a potentially nightmarish array of future “unintended consequences”, and here is why I truly believe that: for the family law attorneys who have been dealing with difficult and complex family court cases, along with difficult and demanding clients, and confronting difficult and unreasonable opposing attorneys, there is a heightened sense of urgency – where there has been an “agreement” reached at the mediation – to have everyone sign, while still at the mediation, either a “stipulation of agreement” (a “stip sheet”) or some type of written document which sets out the “bullet points of an agreement”. I personally cannot begin to count the number of times that I have heard the attorneys tell me at the mediation that “we need to get these people to sign something before they leave the mediation and change their minds”. I would urge the family law attorneys to be very careful in leaving your mediation while relying only on a document which, in some way, merely highlights just the “points of agreement”. Re-read over and over again the “waiver of confidentiality” revision, above; because if one of the parties believes that the executed document formed an “agreement reached during mediation”, while the other party, after post-mediation reflection, realizes that this document failed to fully contain and include everything the “reflecting party” understood to be the parties’ “agreement”, at least one of these attorneys, if not both attorneys, will be facing some significant professional jeopardy. This Rule 8 revision – as supported by the Huck v. Avtex Commercial case – clearly allows for this document “of agreement” to be offered to your family court judge, either in an effort to have the court approve it as written, or for the offering attorney to argue for an award of attorney’s fees against the “repudiating party”. Please let me remind you that it is your clients’ families and fortunes being affected by settlement agreements, and any settlement agreement being presented to a family court judge for approval should always be as exceptionally clear and thorough as possible in addressing every aspect of the parties’ agreement. Please be very careful here not to be lured by “the siren song of settlement”.]
(c) Limited Exceptions to Confidentiality. There is no confidentiality attached to information that is disclosed during a mediation: (1) for which the confidentiality against disclosure has been waived or stipulated to by all parties; (2) that is used to plan a crime, commit or attempt to commit a crime, conceal ongoing criminal activity, or threaten violence; (3) offered to report, prove, or disprove professional malpractice occurring during the mediation, solely for the purpose of the professional malpractice proceeding; (4) offered for the limited purpose in judicial proceedings of establishing, refuting, approving, voiding, or reforming a settlement agreement reached during a mediation; (5) offered to report, prove, or disprove professional misconduct occurring during the mediation; or (6) in a report to or an inquiry from the Chief Judge for Administrative Purposes regarding a possible violation of these rules. [See Comment #5, immediately below]
[Comment #5: The highlighted-in bold provisions represent the new revisions; however, there is nothing necessarily unusual about these “exceptions to confidentiality” except for (1) opening the door ever wider for participating attorneys who thoroughly dislike one another from reporting the opposing attorney’s “professional malpractice occurring during the medation”, and (2) the “exception” providing for an attorney’s use during the litigation of an “agreement reached during a mediation” as a legal weapon of sorts against a “repudiating party” – see also “Comment #4, above.]
(d) Limited disclosures. A mediation communication disclosed under subsections (c)(3), (c)(4), (c)(5), or (c)(6) remains confidential and is not discoverable or admissible for any other purpose, unless otherwise permitted by this rule or by statute. [See Comment #6, immediately below]
[Comment #6: The “limited disclosures” revision should be self-explanatory.]
(e) Private Consultation/Confidentiality. The mediator may meet and consult individually with any party or parties or their counsel during a mediation conference. The mediator without consent shall not divulge confidential information disclosed to a mediator in the course of a private consultation.
(f) No Waiver of Privilege. No communication by a party or attorney to the mediator in private session shall operate to waive any attorney client privilege.
(g) Mediator Not to be Called as Witness. The mediator shall not be compelled by subpoena or otherwise to divulge any records or to testify in regard to the mediation in any adversary proceeding or judicial forum. All records, reports and other documents received by the mediator while serving in that capacity shall be confidential.
(h) Admissible information. Information that would be admissible or subject to discovery does not become inadmissible or protected from discovery by reason of its disclosure or use in a mediation. [See Comment #7, immediately below]
[Comment #7: For the family law attorneys, it would appear that the “admissible information” revision was intended to make certain that an attorney would not be permitted to circumvent or violate the open discovery in our family courts created by the current Rule 25 of the South Carolina Rules of Family Court, to the extent that an attorney was purposely and intentionally sharing documents or materials – electronic or otherwise – with the mediator during the mediation conference, for the purpose of later declaring that this “shared information” was now confidential and no longer discoverable under the Rule 25.]
I’ll stop here, with my continuing hope for our entire family court bar that I am prematurely and unnecessarily sounding the “alarm of unintended consequences”, and that we will all be able to practice family law safe from all of those professional “unknowns” out there.