Bricker & Eckler LLP: The Uniform Mediation Act

The Uniform Mediation Act

Reprinted from November 2003 ohioconstructionlaw.com

Mediation law in Ohio could soon change if the General Assembly passes a bill now pending before it. On October 16, 2003, Rep. W. Scott Oelslager introduced Ohio H.B. 303, which seeks the adoption of the Uniform Mediation Act, called the UMA for short. The UMA is the result of a joint effort by the National Conference of Commissioners on Uniform State Laws and the American Bar Association.

Representatives from Ohio who served on the drafting committee for the Act include the Honorable Thomas Moyer, Chief Justice of the Supreme Court of Ohio, and Dean Nancy Rogers of The Ohio State University Moritz College of Law.

If adopted, the UMA will establish a privilege of confidentiality for mediators and parties to mediation. What does that mean to parties considering mediation as a way to resolve their disputes?

The Importance of Confidentiality. A legal privilege of confidentiality protects statements of parties and mediators, and other forms of “communication” within the privilege, from being used in later proceedings. One of the Ohio Rules of Evidence, Rule 501, provides that the General Assembly and the courts control what is to be privileged and what is not:

The privilege of a witness, person, state or political subdivision thereof shall be governed by statute enacted by the General Assembly or by principles of common law as interpreted by the courts of this state in the light of reason and experience.

In the mediation context, what this means is that statements made during mediation may be deemed confidential and inadmissible as evidence in court if such statements fall within a privilege established by a statute or created by court decision.

When parties who are involved in construction find themselves unable to negotiate a resolution to their disputes, they often turn to mediation as the next step in an effort to avoid arbitration or litigation. Why is mediation so popular? Why are parties willing to sit down with a stranger and work through their problems? These are reasonable questions, and there are some answers.

First of all, mediation has become popular because it works. Except in some court-administered programs, it is a voluntary process. Being a voluntary process, to be successful, mediation depends heavily on trust and credibility. In order to provide this trust and lend credibility to mediation, many states, including Ohio, have rules of evidence and laws that provide a measure of protection to the parties should they choose to mediate their dispute. These rules and laws allow the parties to speak freely during mediation without fear that what they say will be used against them later.

As an example, Rule 408 of the Ohio Rules of Evidence provides as follows:

Evidence of (1) furnishing or offering or promising to furnish, or (2) accepting or offering or promising to accept, a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount. Evidence of conduct or statements made in compromise negotiations is likewise not admissible. This rule does not require the exclusion of any evidence otherwise discoverable merely because it is presented in the course of compromise negotiations. This rule also does not require exclusion when the evidence is offered for another purpose, such as proving bias or prejudice of a witness, negativing a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution.

While this section may protect the parties to mediation to some degree, as we can see, there are many holes in the protection, and a creative lawyer will surely find the way through them when possible. It has been my experience, however, that a court will be reluctant to listen to any previous statements made in the course of negotiating a compromised settlement of a disputed claim. With busy court dockets, most courts encourage settlement discussions (including mediation), and only on rare occasions will they consider any statement made in furtherance of a settlement.

However, recognizing the need to promote mediation as a viable alternative to litigation, in 1997 the General Assembly enacted R.C. 2317.023. This statute provides specific protection for mediating parties sothat their discussions will remain confidential. In substance, here is what the statute provides:

(B) A mediation communication is confidential. Except as provided in division (C) of this section, no person shall disclose a mediation communication in a civil proceeding or in an administrative proceeding.

As you would imagine, division (C) lists several exceptions allowing the use of discussions or other communications that occur during mediation, e.g., consent, duty to report certain crimes, public records under certain circumstances, or if the need for disclosure outweighs the manifest injustice that would result from nondisclosure. The last exception is interrelated with Rule 408 of the Rules of Evidence, quoted above, and requires a court hearing and determination before disclosure can occur.

Soon after its enactment, the Supreme Court of Ohio reviewed R.C. 2317.023. The court put its stamp of approval on what it described as plain and unambiguous language that communications during mediation shall be kept confidential. In State ex rel. Schneider v. Kreiner (1998), 83 Ohio St.3d 203, the Court noted the importance of confidentiality as a “means to encourage the use of mediation and frankness within mediation sessions.” Based on the intent of the General Assembly as reflected in the “clear words of the statute,” the Court refused to permit disclosure.

So with Rule 408 and R.C. 2317.023 protecting the parties’ discussions during mediation from being used against them in a later court action, and the Supreme Court’s recognition of the importance of keeping mediation discussions confidential, why is the General Assembly now being asked to adopt the UMA?

What the UMA Would Add. To begin with, R.C. 2317.023 contains vague language, as it protects against disclosure or admissibility only in “civil proceedings” or “administrative proceedings.” The UMA, on the other hand, defines a “proceeding” more broadly:

“Proceeding” means a legislative hearing or similar process, or a judicial, administrative, arbitral, or other adjudicative process, including related pre-hearing and post-hearing motions, conferences, and discovery.

This definition applies to a far broader spectrum of post-mediation proceedings, including arbitration or other processes that might dispose of the parties’ dispute. In support of the UMA, one would argue that parties contemplating mediation under it should have more comfort in disclosing information important to reaching resolution without fear that such disclosure will haunt them in a later proceeding. Providing this additional “comfort” helps to “encourage the use of mediation and frankness within mediation sessions.” This is particularly important in construction cases because many claims proceed to arbitration if not resolved through mediation. The current system does not address the disclosure of discussions during mediation in the context of arbitration, whereas the UMA does.

The exceptions to disclosure are limited under the UMA as well. Under the UMA, disclosure of communications made during mediation is permissible only for these purposes:

proving threats of bodily harm,
reporting abuse and neglect,
establishing that a mediation was used as a pretext to further a crime, or
proving in court either that a mediated settlement agreement was induced by fraud or duress, or that the mediator engaged in professional malpractice or misconduct.

While these exceptions may encroach on the goal of fostering full disclosure and frank discussions during mediation, their reasonableness, according to some, is self-evident.

The UMA has other features worthy of comment, but complete coverage is beyond the scope of this article. Perhaps the most important feature to the construction industry is the protection that it offers in the context of arbitration.

Although the AAA’s Construction Industry Arbitration Rules preclude the use of “confidential information” disclosed to a mediator during mediation, these Rules only apply to a AAA arbitration and do not have the force of law. The term “confidential information” is not well defined either. Moreover, if someone other than the AAA conducted the preceding mediation, the rules protecting “confidential information” disclosed to the mediator would not bind the AAA arbitrator. AAA arbitrators are also not bound by the rules of evidence (R-32 of the AAA Rules), but they are required to take into account applicable principles of legal privilege.

Because the UMA makes communications during mediation confidential and creates a statutory legal privilege, it seems that, if nothing else, the UMA would fill the gap left open by R.C. 2317.023. The UMA would protect the parties to a mediation from disclosure of privileged information generated as the result of mediation.

Note: The Uniform Mediation Act was signed into Ohio law by the Governor on January 28, 2005 and became effective on April 29, 2005. Full text of H.B. 303.