Not long ago, a federal court in Oregon gratned summary judgment for the defendants in a legal malpractice claim.  The case highlights the stakes involved in expansive mediation privileges.  Or put differently, the case highlights the tradeoffs of having limited exceptions to a mediation privilege.  For anyone looking for a good set of modern facts to use in a Mediation class on confidentiality, this one will probably serve you well.

Fehr v. Kennedy, 2009 WL 2244193 (D.Or.).

Roughly speaking, the Fehrs were defendants in an action brought by ASH, an LLC of which they were a part.  ASH alleged that the Fehrs breached their fiduciary duties to the LLC, engaged in fraud, and in a civil conspiracy.  The case went to mediation, and no settlement resulted.  The case then went to a bench trial, and the court awarded ASH a judgment in excess of $300,000 against the Fehrs.

The Fehrs then brought suit against John Kennedy, the attorney who represented them in the ASH v Fehr lawsuit.  The Fehrs alleged that Kennedy had “failed to advise them of the risk of going to trial and specifically discounted and contradicted the mediator’s assessment of the likelihood of success of ASH’s claims and the consequences of a loss at trial.”

Kennedy filed a motion for summary judgment, arguing that “the Fehrs cannot prove their malpractice claim without disclosing and admitting into evidence communications that occurred during the mediation.”  Kennedy then went on to cite Oregon’s state mediation confidentiality statute, which contains no explicit exception for allegations of professional malpractice. Because  the mediator and the plaintiffs in the original action did not consent to waive their privilege, the court granted Kennedy’s motion for summary judgment.

Compare that outomce with one in a state that has adopted UMA section 6(a)(6), and you’ve got a pretty good class session all neatly prepared.

Michael Moffitt