Hot Topics for Trial Lawyers
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Mediation and Confidentiality Agreements
Posted 5/9/08 Randy Johnston, Johnston ~ TobeyYou’re in a mediation and towards the end of the day, the defendant and plaintiff appear to be getting ready to settle. Both sides know that there is probably going to be an agreement on the money - which is the hard part, right? Then right at the end of the negotiations, the defendant inserts a new issue in the negotiations and asks for a confidentiality provision. Usually, the plaintiff is willing to give it. The plaintiff just wants the money, right? The plaintiff’s lawyer, however, objects: she wants to take out a full page ad in Texas Lawyer and tell everyone who will listen about the good result she got for her client.
Where are the ethical boundaries to help a lawyer when the client wants to close the settlement and the lawyer wants to publicize the result?
Rule 1.05 of the Texas Disciplinary Rules of Professional Conduct provides our basic guidance in this situation. The key to this rule is in the first paragraph, in the definition of ”Confidential Information.” Confidential Information includes both privileged information and “unprivileged” information. Most lawyers have a good feel for what constitutes privileged, attorney-client information (information that is shared only with the lawyer by a client seeking legal services, with the expectation that it be kept secret). Yet, many lawyers think, wrongly, that the only limitation on their right to talk about their client’s case is the obligation not to disclose privileged, attorney/client information. However, Rule 105 makes it clear that a lawyer’s obligation of confidentiality extends far beyond the narrow doctrine of privileged attorney-client communications.
Rule 105 states that Confidential Information also includes unprivileged client information and defines this unprivileged, but nevertheless confidential, information as “all information relating to a client or furnished by a client during the course of or by reason of the representation of the client.” Put another way, everything you learn “during the course of or by reason of” your representation of your client is confidential, whether it is privileged or not.
The Rule goes on to prohibit lawyers from disclosing confidential information (whether privileged or not) except in certain circumstances. A lawyer can, for example, disclose confidential information when it is necessary to prevent the client from committing a crime or when it is necessary to defend the lawyer against a claim of wrongful conduct. The only time a lawyer is required to disclose confidential information is when information clearly establishes that a client is likely to commit a crime or fraudulent act that would result in death or substantial bodily harm or when . . .
Now, letˇ¦s apply lessons of Rule 1.05 to the mediation hypothetical. Is this settlement related to the client? Of course it is. Was the information acquired by the lawyer during the course of or by reason of the representation of the client? Again, the answer is obvious. Under the plain and simple reading of Rule 1.05, this settlement is already confidential information for the lawyer and the lawyer cannot disclose it without the client’s permission.
I am no fan of confidentiality provisions, although I recognize they serve a useful purpose in some cases. I also recognize, however, that the confidentiality provision negotiated in mediation is not what binds me to confidentiality: the confidentiality provision binds my client, but I am bound to keep settlement information confidential even in the absence of the defendantˇ¦s request for a confidentiality provision, unless my client consents.
There are many good and valid reasons to resist a confidentiality provision, and a lawyer in mediation has the duty to advise the client properly before the client agrees to confidentiality. If, however, the lawyer is putting her own selfish interests above the interests of the client, because of the lawyer’s desire to use the settlement in advertisements, something is wrong.
Lawyers who resist confidentiality provisions for their own personal economic benefit and, in the process, jeopardize their clients’ settlements, should recognize they do so at their own peril.