Here's a place for us to collect and discuss a particular possible "fix" to the Foreclosure Fairness Act: how to provide for mediator privilege from testimony?

(Here's a different discussion to discuss ideas about mediator immunity from liability.)

What are your ideas on how this might be done?

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Here's a draft providing for mediator privilege by reincorporating the Uniform Mediation Act (Chapter 7.07 RCW) and providing certain exceptions from the UMA's privilege protections. The basic structure is taken from RCW 26.09.015, the first statutory exception to the UMA:

(1) Mediation proceedings under this section shall be governed in all respects by chapter 7.07 RCW, except the following mediation communications are admissible in subsequent proceedings pertaining to a foreclosure action between the parties:

(a) Any written notice, waiver, document, information or certification required under this section
(b) mediation communications of any party or non-party participant

(2) None of the exceptions under this subsection shall subject a mediator to compulsory process to testify.

(3) If a mediation communication is not privileged under this subsection only the portion of the communication necessary for the application of the exception may be admitted and such admission of evidence shall not render any other mediation communication discoverable or admissible except as may be provided in chapter 7.07 RCW.

Paragraph (1)(b) is designed to allow any of the parties to testify or compel testimony about their own communications in the mediation, but not the mediator's. I've put it in here because I understand the proponents of the original bill really wanted the parties to be able to talk about what happened in the mediation to support (or attack) a finding of lack of good faith. If I'm mistaken, I would consider it an ADR best practice to remove this exception and for their mediation communications to be privileged as well.

There is the related issue of permitting under the UMA the various disclosures required of the mediator by the FFA. RCW 7.07.060 prohibits all such disclosures except for certain permitted exceptions. The Title 26 privilege exceptions don't appear to deal with this at all. Question whether the exception should be in the UMA or in the FFA? I'm checking to see if Professor Kirtley has a suggestion.

No comments, and I've not heard back from Professor Kirtley, so here's a redraft to address the "permitted disclosure" question I had left open:

(1) Mediation proceedings under this section shall be governed in all respects by chapter 7.07 RCW, with the following exceptions:

(a) Any notice, waiver, document, information or certification that is required to be in writing under this section is admissible in subsequent proceedings pertaining to a foreclosure action between the parties;
(b) Mediation communications of any party or non-party participant are admissible in subsequent proceedings pertaining to a foreclosure action between the parties;
(c) a mediator may disclose the certification as required under this section.

(2) None of the exceptions under this subsection shall subject a mediator to compulsory process to testify.

(3) If a mediation communication is not privileged under this subsection only the portion of the communication necessary for the application of the exception may be admitted and such admission of evidence shall not render any other mediation communication discoverable or admissible except as may be provided in chapter 7.07 RCW.

Jeff,

 

I've had a chance to look at your Sep 20 draft below and it looks good to me! 

 

I'm pretty sure that the WSBA Legislative Committee will want to know why the State Legislature and bill sponsors did not apply these provisions of UMA to the FFA when it was originally drafted.  (Do we know this?)

 

Additionally, the WSBA Legislative Committee will want to know whether we have vetted our set of  proposed amendment(s) with affected parties and received feedback, and what that feedback is.  If we haven't notified all key stakeholders and received their input, it's likely the Committee will table it until we do so.  Is Kathryn Leathers or DOC helping you with this?   

 

Thank you for your work on this.

No good intel on why UMA was excluded, other than the prime movers, borrower's advocates, said  the lenders' community wanted it. My take is they saw how much of the FFA mediation process that needs to be able to be disclosed and not privileged, and instead of listening to Professor Kirtley (who testified, but late in the process) they just threw-out mediator privilege with the whole UMA-bathwater.

When I put together this draft it was based on Professor Kirtley's suggestion to look at the work they did, when adopting the UMA originally, in Title 26 RCW, and to use those exclusions as a model.

As for vetting, we are definitely heading toward an all-hands stakeholder meeting, including Commerce. Kathryn Leathers is shepherding it and very much involved and leading the process and providing us with direction.

So we're somewhat in a cart-before-the-horse situation here, where we've been told we need to reduce our proposals to actual amending language and get Executive Committee approval of it, before any of those discussions with others outside of WSBA happens.

Alan's comments, with some formatting changes for clarity, and the comments regarding Immunity have been moved to that discussion here. - Ed.

Dear Jeff,

Below are some revisions to the draft legislation for your group’s consideration.   Please review them with this in mind.  While I’m quite familiar with the UMA, that cannot be said for the Foreclosure Fairness Act.  I hope to, but have not yet, received the mediator training.  That said, here are my suggestions and comments:

****************************

(1) Mediation proceedings under this section shall be governed in all respects by chapter 7.07 RCW, except the following mediation communications1 are admissible in a subsequent proceedings pertaining to a foreclosure action between the parties for the limited purpose of proving whether the beneficiary failed to act in good faith2 in a mediation conducted pursuant to this Act:

(a) Any written notice, waiver, document, information or certification required under this Act section3; or

(b) “Mmediation communications of any party or non-party participant,” as defined by chapter 7.07 RCW4.

 

(2) Neither None of the exceptions under this subsection (1) shall subject a mediator discovery5 or to compulsory process to testify.

(3) If a mediation communication is not privileged under this subsection (1) only the portion of the communication necessary for the application of the exception may be admitted and such admission of evidence shall not render any other mediation communication discoverable or admissible except as may be provided in chapter 7.07 RCW.

(Alan's Footnotes:)

1.  This deletion is appropriate only if some of the items listed in (1)(a) are not “mediation communications” per se. 

2.  The purpose of this addition is to further narrow the proposed exception to the mediation privilege.

3.  This change is appropriate only if any of these documents are required in another section of the Act.

4.  These changes, using UMA definitions,  are to clarify and narrow what information may be disclosed and which mediation participants may be compelled to testify. 

5.  Perhaps overkill, but this change is made to remove any concern that a mediator will be subject to discovery requests.   

See my other comments within your message below in red (in italicized block quotes).

Alan Kirtley

Associate Professor of Law


From: Jeff Bean [mailto:jeff@beyondthecourthouse.com]
Sent: Thursday, September 29, 2011 12:39 PM
To: Alan Kirtley
Cc: Paul McVicker
Subject: Re: WSBA ADR Section, The Uniform Mediation Act and the Foreclosure Fairness Act

Alan,

Just to bring you up to speed. Our drafting efforts continue. In fact, they've come to a head.

We just learned that we need to run specific language by the ADR Section Executive Committee for approval to satisfy internal WSBA requirements before we can sit down with the other stakeholders. It will likely be discussed over the weekend, during the committee's retreat.

So here's where you can see the drafting efforts on the issue of the mediator privilege and reincorporating the UMA. As you can see there, we used your suggestion to look to the Title 26 exceptions as a model and cobbled from that directly.

I want to address the comment you made earlier about party and non-party participants' privilege. We do know that it was integral to the structure of the FFA that the parties be able to contest and present evidence regarding the mediator's certification regarding good faith. They can't do that if the parties and non-parties' have a privilege over their mediation communications. So from the perspective of the main stakeholders - borrowers' advocates and lenders community - they want to be able to fight about what happened in the mediation. By reestablishing the mediator's privilege we are making sure that at least we mediators aren't in the middle of it!

Alan's Comment:  As long as the exception is limited to the issue of beneficiary good faith, in the draft above, I have no quarrel with this approach.  To do otherwise would gut the good faith requirement which plays a vital role in this legislation.  However enforcing “good faith” raises the question of what is required for the parties to participate “in the mediation in good faith” under the FFA.   It may be it is in the act, but I did not see a definition of “good faith” mediating.

The enforcement of “good faith” mediation is a long standing issue in the mediation community and a lot of ink has been spilled in academic journals on the subject.    For the benefit of all concerned it may make sense to add a definition of “good faith” to the FFA. The general accepted view for mediator reports to a court is found in the UMA, RCW 7.07.060; namely that a mediator should only be required to report objective data: did the mediation occur; what settlement reached; attendance and [a WA specific addition] efforts to schedule.  Other objective requirements for FFA mediation parties could be added.  This approach will avoid litigation over the correctness of a mediator’s subjective judgment as to whether a beneficiary acted in “good faith.”

***

(See this discussion for Alan's comments re immunity from liability for .... - Ed.)

***

This isn't the last time we'll be dealing with specific language. And we're not the legislature, of course. Yet I'd really love to have your thoughts on this if you have the time and inclination.


Jeff Bean
www.Beyond the Courthouse.com
Seattle 206 794 5585

 

Alan, thanks so much for weighing-in! Good improvements. I think I can provide a little background on the FFA and provide some response to your other comments and questions.

Footnote 1: It had been my assumption all things were mediation communications, but I'm not certain of that. The specificity isn't crucial and so your more general language does just as well. I'd like to use your change.

The unannotated deletion between footnotes 1 and 2: "proceedings pertaining to a". That language comes straight from the relevant section of the FFA that allows the certification to be admissible in "proceedings pertaining to foreclosure action between the parties." So that language is used verbatim to tie directly to that section and to not create any ambiguity. So I'd leave in the phrase you deleted.

Footnote 2: I don't mind making it explicit that the exception is for a limited purpose. I think it makes a certain amount of sense. Yet I can imagine that either or both borrower's/beneficiaries' might have a problem with it. So I'd be fine with leaving your addition in yet, if we get push-back, I'd let it go because it's not a central issue we're hearing from the mediation community.

Is there a reason you made it unilateral, only applying to beneficiaries? I can certainly see them having a problem with that. Can we make it bilateral? With that refinement, I'd use your change.

(Again, in this session we're heading toward a uncontested bill that addresses our main issues - not to get into a fight between the borrowers' and lenders' communities on the substantive policy aspects of Act.)

Footnote 3: All the mediation provisions are in one section, but I see no downside making the reference broader to include the whole act. I'd like to use your change.

Footnote 4: This is all great! I'd like to use it.

Footnote 5: Maybe "Belt & Suspenders," but I'm okay with your upgrade and would use it.

Response to Alan's Comment about Mediator's Finding of Good Faith: "Good faith" is extensively defined in the FFA with enumerated factors, so I think you can be comfortable not being concerned about that here.

I'm not a fan of any process that's called "mediation" having any fact-finding by the neutral, but unless we want to make a play to have the Legislature call it something else, I don't see a solution.

I hear your concern about limiting any mediator fact-finding to "objective" factors. And unfortunately, although the FFA's enumerated factors of good faith are objective factors, they are introduced with "may include," making the determination whether the constitute a lack of good faith to be very subjective, including the possibility that a mediator may find a lack of good faith based on a factor that is not even enumerated. Yet that's a substantive policy issue that is also likely to attract opposition, and we're trying to get to an all-agreed fix-it bill on our most important issues during this short legislative session.

Over the weekend Paris Kallas pointed out that while adding the more complete mediator privilege of the UMA, we should to revise the FFA's current language that limits testimony - Section 7(4)(b) - the weak exclusion only of the mediator as a "live" witness:

(b) Prior to scheduling a mediation session, the mediator shall require that both parties sign a waiver stating that neither party may call the mediator as a live witness in any litigation pertaining to a foreclosure action between the parties. However, the mediator's certification may be deemed admissible evidence, subject to court rules, in any litigation pertaining to a foreclosure action between the parties.

So, how best to do that?

First, FYI, I believe Commerce's version of the bill will reflect the significant conversations and work they've had with the DRCs (ResWA) on the mediation agreement they want to have. So I think Commerce will propose revising this paragraph's language to turn the waiver into mediation agreement. I'm poking around to see if I can learn anything on specific on that - but I probably won't hear back before we need to move through this first approval process.

We could make specific reference to the mediation being subject to the UMA and subject to the specific FFA exceptions. But I'm thinking it could be more simple than that - just strike out the word "live:" neither party may call the mediator as a live witness in any litigation ... ."

Too simple? Something else needed?

And to be clear, this is in addition to the following addition to that sentence: "and that the mediator is immune from suit in any civil action based on any proceedings or other official acts performed in his or her capacity as a mediator under this section, except in cases of willful or wanton misconduct."

Here's a version incorporating Professor Kirtley's upgrades. This'll be the one we'll ask the Executive Committee consider for approval. Again, this isn't the final word - this just gets us in the door for the first meetings. And when language comes out of those meetings, things may  happen fast, but I'll be working hard to get them to come to LegComm for consideration before they go to Exec again.

New Paragraph to Section 7:

(1) Mediation proceedings under this section shall be governed in all respects by chapter 7.07 RCW, with the following exceptions:

(a) Any notice, waiver, document, information or certification that is required to be in writing under this Act, and mediation communications" of any "party" or "non-party participant" as defined by chapter 7.07 RCW, are admissible in subsequent proceedings pertaining to a foreclosure action between the parties for the limited purpose of proving whether a party failed to act in good faith in a mediation conducted pursuant to this Act;
(b) a mediator may disclose the certification as required under this Act.

(2) None of the exceptions under [paragraph 1 above] shall subject a mediator to discovery or compulsory process to testify.

(3) If a mediation communication is not privileged under [paragraph 1 above] only the portion of the communication necessary for the application of the exception may be admitted and such admission of evidence shall not render any other mediation communication discoverable or admissible except as may be provided in chapter 7.07 RCW.

Amend Section 7(4)(b):

(b) Prior to scheduling a mediation session, the mediator shall require that both parties sign a waiver stating that neither party may call the mediator as a live witness in any litigation pertaining to a foreclosure action between the parties and that the mediator is immune from suit in any civil action based on any proceedings or other official acts performed in his or her capacity as a mediator under this Act , except in cases of willful or wanton misconduct. However, the mediator's certification may be deemed admissible evidence, subject to court rules, in any litigation pertaining to a foreclosure action between the parties.

Click here to download the language that was unanimously adopted by the ADR Section Executive Committee.

There will still likely be more work on this when we start talking to other stakeholders, most likely a tee-up to another approval by the Executive Committee. So we're not done by a long shot. But this is a great first step.

Thanks, folks!

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