Breach of Mediation Privilege

Leads to Conflict and Discipline

A lawyer was disciplined subsequent to breaching the Florida Mediation Confidentiality and Privilege Act (F.S. 44.401-406). He attached a confidential proposed settlement agreement from a mediation to a civil complaint filed in federal court. The lawyer represented homeowners’ associations as plaintiffs, on a contingency basis, against mobile home park owners. The breach of the mediation privilege led to a cascading course of conduct and errors resulting in discipline.

As a result of the breach, the presiding district court imposed a $9,700.00 joint and several sanctions against the lawyer and his client. Additionally, the court dismissed the case and awarded $37,927.43 in fees to be paid by the client.

The lawyer stated that the client wished to refile the claim in state court, but would not do so if the client had to pay the fees and sanction awarded by the district court. The lawyer then negotiated a new fee agreement whereby he paid the awarded fees and the sanction for breach of the mediation privilege. These payments facilitated the refiling of the case in state court. It was agreed that the lawyer would be reimbursed out of any award in the state court case.

It was the lawyer’s conduct in relation to procurement of the new fee agreement subsequent to the breach of the mediation privilege that caused a conflict of interest in violation of Rule 4-1.7 (Conflict – Current Clients). This conflict was, in part, the basis for the imposition of a sanction of a 60-day suspension in the consolidated disciplinary cases SC22-391 and SC22-1097.

The referee explained the basis of the conflict and observed that the new “agreement did not explain joint and several liability, or state that respondent could be solely liable for the payment of the $9,700.00 mediation sanction regardless of any future suit filed in state court or any agreement to repay him.” The agreement did not disclose that the opposing counsel had already been requesting payment of the $9,700.00 from the lawyer. The client was not informed and did not understand that the lawyer could be solely liable for payment of the sanction.

The referee found that “The repayment agreement… amounted to a conflict of interest between respondent's personal interest and his client's interest since the mediation sanction debt, once paid by respondent, would be satisfied, and owed by no one.” The referee further found that there was no informed written consent by the client. Informed consent requires a lawyer to communicate “adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct.”

The refiled state case resolved with no recovery and the lawyer was not reimbursed for payment of the fees or sanction. The client suffered no financial harm. Although the lawyer engaged in additional misconduct, discipline for this conflict gives emphasis to the importance of the obligation of a lawyer to make full and complete disclosure of relevant circumstances, risks and potential conflict to a client, even when the lawyer is attempting to provide extraordinary assistance.