What Does A Court Mean When Litigants Are Ordered To "Mediate In Good Faith?"

Two recent non-NJ courts have taken a look at what constitutes “good faith” by a party ordered into mediation, with different outcomes hinging on weather the court viewed the actions of the mediator in reporting a party’s conduct in mediation as a breach of confidentiality.

Anthony vs. Andrews, 2009-Ohio-6378 – In this Ohio medical malpractice case, defense counsel told the mediator that her client would not give her consent to settle the matter and had never done so. The mediator, in his report back to the court, told the court the case did not settle and what defense counsel had stated. The court — sua sponte — issued an Order to Show Cause to determine if the defendant was in contempt of court for violating the order to mediate in good faith. The trial court found the defendant in contempt and ordered defendant to pay plaintiff’s attorney fees, lost wages and costs of attending the mediation session. On appeal, the trial court was reversed. The appellate court found that the mediator’s report to the court violated the confidentiality of the mediation. Costs of the appeal were taxed to the plaintiff.

In re A.T. Reynolds and Sons Inc., Case No. 08-37739 – In this case, the bankruptcy court in the Southern District of New York also looked at good faith participation by a party ordered to mediation. In a detailed opinion, the court wrote:

The issue is whether mere attendance at court-ordered mediation, without active participation in the mediation process, satisfies the requirement to participate in good faith. The Court holds that attendance without active participation is insufficient to constitute good-faith participation in mediation.

The court also looked at what mediation is:

Mediation entails a process, and requires parties to hear each other’s points of view and proposed resolutions to the issue underlying the mediation. Passive attendance at mediation cannot be found to satisfy the meaning of participation in mediation, because mediation requires listening, discussion and analysis among the parties and their counsel. Adherence to a predetermined resolution, without further discussion or other participation, is irreconcilable with risk analysis, a fundamental practice in mediation. While it goes without saying that a court may not order parties to settle, this Court has authority to order the parties to participate in the process of mediation, which entails discussion and risk analysis.

Addressing confidentiality, the court held as follows:

To ensure good faith participation, the mediators are required to report failures to participate in good faith, and they are relieved from rules of confidentiality to the extent necessary to do so.

The court ultimately issued sanctions against Wells Fargo and their counsel for civil contempt and ordered them to pay for all of the costs of the mediation, including the mediator and costs for the other parties to attend.