If one party to a mediation hides a material asset and tells the lawyer-mediator to conceal it, can the mediator finish the mediation, and can the mediator tell the other party?

Plain-English summary

A lawyer-mediator is retained by two parties to mediate a domestic relations matter. During the mediation, Party A discloses assets unknown to Party B that the mediator knows are important to Party B's decision-making, then instructs the mediator to withhold those facts from Party B. The opinion asks whether the mediator may continue to mediate to conclusion (answer: no) and whether it matters that the mediator is unfamiliar with the substantive law (answer: no).

The opinion applies Oregon RPC 2.4, which governs a lawyer serving as a mediator and bars the lawyer from acting as a lawyer for any party against another in the matter. Whether or not the mediator separately represents a party, the mediator remains bound by the rules of professional conduct, including Oregon RPC 8.4(a)(3) (dishonesty, fraud, deceit, or misrepresentation), Oregon RPC 8.4(a)(4) (conduct prejudicial to the administration of justice), and Oregon RPC 3.3(a)(5). The opinion concludes a lawyer who is also a mediator cannot knowingly misrepresent or conceal a material fact, and therefore cannot complete a mediation based in whole or in part on a party's fraud. Lack of familiarity with the substantive law does not change that duty.

On disclosure, the opinion concludes the mediator must at a minimum inform Party A that the nondisclosure obligates the mediator to withdraw, and may go further by telling Party A that the mediator will inform Party B that no further reliance should be placed on prior statements (a "noisy withdrawal"). The mediator may not, however, disclose the attempted fraud itself to Party B. ORS 36.220 makes mediation communications confidential, and its exceptions (such as preventing a crime likely to cause death or substantial bodily injury) do not reach commercial or monetary fraud. The opinion reasons the mediation-privilege statute lacks the broad future-crime exception found in Oregon RPC 1.6(b)(1), and the statutory nondisclosure obligation predominates, even if Party A happens to be the mediator's client in some other matter.

In practice

This opinion (revised 2014) interprets the current Oregon Rules of Professional Conduct, but it is more than five years old, so readers should verify the current rule and statute text before relying on specifics. The opinion holds that a lawyer-mediator faced with a party's concealment of a material fact must withdraw rather than complete the mediation, and may make a noisy withdrawal directing the other party not to rely on prior statements. Per the opinion, the line between permitted and prohibited action turns on ORS 36.220: the mediator may signal that prior statements are unreliable but may not reveal the concealed fact, because the mediation-confidentiality statute provides no exception for commercial or monetary fraud and predominates over the permissive disclosure in Oregon RPC 1.6(b)(1).

Common questions

Q: Can a lawyer-mediator finish a mediation if one party is hiding a material asset?

A: No. The opinion concludes a lawyer-mediator cannot complete a mediation based in whole or in part on a party's fraud, because the rules bar knowing concealment of a material fact (Oregon RPC 8.4(a)(3)).

Q: Must the mediator just quietly withdraw, or can the mediator say more?

A: The opinion concludes the mediator must at least tell the concealing party that the nondisclosure requires withdrawal, and may go further and warn the other party that no further reliance should be placed on prior statements, a noisy withdrawal.

Q: Can the mediator tell the other party about the hidden asset?

A: No. The opinion concludes that under ORS 36.220 mediation communications are confidential and no exception covers commercial or monetary fraud, so the mediator may not disclose the attempted fraud.

Q: Does it matter if the mediator does not know the substantive law of the dispute?

A: No. The opinion concludes the mediator's duty not to complete a fraud-based mediation does not depend on the mediator's familiarity with the substantive law.

Background and rules framework

The opinion interprets Oregon RPC 2.4 (lawyer serving as mediator), Oregon RPC 8.4(a)(3) and 8.4(a)(4) (dishonesty and conduct prejudicial to the administration of justice), Oregon RPC 3.3(a)(5), and Oregon RPC 1.6(b)(1) (permissive disclosure to prevent a crime), corresponding to Model Rules 2.4, 8.4, and 1.6. It reads those rules against ORS 36.220, the Oregon mediation-confidentiality statute, which the opinion concludes controls the disclosure question.

Citations and references

Rules of Professional Conduct:

• Oregon RPC 2.4 / Model Rule 2.4 (lawyer serving as mediator)
• Oregon RPC 8.4(a)(3), 8.4(a)(4) / Model Rule 8.4 (dishonesty; conduct prejudicial to administration of justice)
• Oregon RPC 3.3(a)(5)
• Oregon RPC 1.6(b)(1) / Model Rule 1.6 (permissive disclosure to prevent a crime)

Statutes:

• ORS 36.220 (confidentiality of mediation communications)

Cases:

• In re Williams, 314 Or 530, 840 P2d 1280 (1992), knowing misrepresentation
• Rojas v. Superior Court, 33 Cal 4th 407, 93 P3d 260 (2004), no judicial fraud exception to parallel California statute

Other opinions cited:

• ABA Formal Ethics Op. No. 92-366 (noisy withdrawal)
• OSB Formal Ethics Op. No. 2005-34; OSB Formal Ethics Op. Nos. 2005-131 and 2005-132 (client fraud or perjury)

See also

• OSB Ethics Op. 2005-101: Lawyer as Mediator, Trade Names, Fee Division With a Nonlawyer
• OSB Ethics Op. 2005-135: Arbitrator/Mediator Fees in a Trust Account
• OSB Ethics Op. 2005-34: Client Perjury

Source

• Landing page: https://www.osbar.org/ethics/toc.html
• Original PDF: https://www.osbar.org/_docs/ethics/2005-167.pdf