Sacrificing Settlement Agreements in the Name of Mediation Confidentiality: The California Supreme Court\u27s Narrow Holding Has Harsh Consequence

Confidentiality is regarded as one of the primary benefits of mediation. For parties who wish to avoid the public eye, mediation is often preferable to court. However, when parties reach some form of a settlement agreement during mediation, and subsequently disagree as to the terms of that agreement, the parties may find themselves in court. In court, the issue of whether the settlement agreement is admissible arises. In Fair v. Bakhtiari, the California Supreme Court addressed the question of whether an arbitration provision listed in a settlement agreement renders the agreement admissible under the California Evidence Code. The court emphasized the importance of maintaining mediation confidentiality and recognized the value of working documents produced during mediation sessions. However, by holding that an arbitration clause cannot render a settlement agreement admissible, the court sacrificed the enforceability of such agreements for the sake of mediation confidentiality. The court\u27s narrow holding does not provide clear guidance as to how parties can draft settlement agreements that are enforceable, and, thus, admissible in a subsequent legal proceeding. Thus, the Fair court has done future parties a disservice by providing a narrow and incomplete holding regarding the admissibility of settlement agreements in California