In the last edition of this newsletter, Ed Schnitzer provided us with an excellent summary of the how and when a mediator may determine the absence of good faith. With an eye on topics of interest, Don Swanson republished Ed’s article on his weekly blog with an invitation for comment. I did just that and my response elicited further comment from many colleagues. Judi Fitzgerald has invited me to restate my concerns in this brief article to stimulate further inquiry and discussion on this important topic.
First, I would like to thank Ed for his efforts in presenting the good-faith issue in a neutral, informative way. I agree with the entirety of his presentation and with his conclusion that a mediator does have significant discretion in determining good faith in those jurisdictions where such a determination is permitted or required by local rule. My concern is not with Ed’s presentation; rather, it is with the notion that a mediator may be empowered to determine an absence of good faith under any set of circumstances. My guess is that rules permitting or imposing a duty of determining good faith upon a mediator arise from the inclusion of mediation as a tool in a court’s case-resolution scheme. To make the scheme work (i.e., achieve a coerced “voluntary” settlement), enforcement procedures were built in and the mediator was given reporting responsibilities and the discretion or duty to make the judicial determination of good faith. But an absence of good faith is not a simple reportable event, like a failure to appear. It is a conclusion of law that should be based on admissible evidence. Mediation is not an extension of judicial case resolution, and mediators — including judges acting as mediators — are not judicial officers or deputy judges. If bad conduct occurs in the course of a mediation and an impasse results, the mediator should declare an impasse and report it to the court without further comment. In such an instance, the court could determine an absence of good faith on its own motion or the motion of an aggrieved party, on notice and an opportunity to be heard. I recognize that this procedure is cumbersome, and that confidentiality may pose difficulties for a court in making such a determination, but preserving confidentiality may be more important than nailing the occasional bad actor. A charge of bad faith should never be a “get out of confidentiality free card.” If we don’t want threats of bad faith to invade the mediation process and erode confidentiality, we should abandon the entire matter of good faith and go straight to a fast-track judicial determination on the merits when there is an impasse.
Of course, those who think of mediation as a cost-effective extension of the judicial process would argue that the implementation of this suggestion would undermine the purpose of mandatory mediation. Not so. The use of mandatory mediation to resolve consumer cases, clear post-confirmation avoidance actions or anything else is a wise way to conserve judicial resources. But mandatory mediation does not imply mandatory settlement. Some cases just won’t settle, and a failure to settle does not establish bad faith on the part of a participant, even when the reasonableness of an opposing participant’s offer is apparent to the mediator. The judge should be the only actor empowered to determine an absence of good faith.