On Reid v Kroll
By: Isaac Borenstein, Flávio DaCosta, Jeff Fraser, Brad Honoroff & Mike Stone
Massachusetts has created a bit of a stir in the Massachusetts mediation community. In Reid v. Kroll (Middlesex Superior Court, No. 2181CV00769), a mediator, who is also a lawyer registered in Massachusetts, drafted a separation agreement for a divorcing couple at the conclusion of their mediation process. The couple was not represented by counsel during the mediation and, according to the opinion in the case, agreed that the mediator should draft the separation agreement memorializing their agreement that was later presented to the court. The husband alleged that the agreement contained inconsistent provisions about the permanency of their decisions on alimony and as a result the wife was able to bring an action for modification of their agreement that the husband believed was not their original intent. The husband then brought suit in the Superior Court against the mediator for negligence and legal malpractice. The mediator moved to dismiss the claim and Judge James Budreau denied the motion to dismiss, stating that if the allegations proved true, the husband had a viable claim for negligence and legal malpractice.
Our colleague, David Hoffman, wrote a succinct analysis of the decision, its departure from established practice in Massachusetts for lawyer/mediators drafting marital separation agreements as well as its inconsistency with ethical opinions of the Boston Bar Association, the Mass Bar Association and even the American Bar Association. It was published in Massachusetts Lawyers Weekly on March 14, 2022 and is available here. We recommend it to you and we need not repeat it here. Instead, we have asked several of our mediators for their reactions to the judge’s opinion and the controversy it has created. Mike Stone, whose practice before becoming a mediator often involved defending lawyers amid allegations of legal malpractice, suggests that the case may be limited to those cases involving the drafting of marital separation agreements, but does caution about the risk of undertaking those. Jeff Fraser, whose mediation practice includes drafting separation agreements for clients, most but not all of whom are represented by counsel, suggests changes in our practice to minimize that risk. Flávio DaCosta, a promising young lawyer and Fellow at TMG, focuses on the implications for parties who cannot afford both mediation and legal representation. I stick my 2 cents in about why I believe the judge’s analysis of a mediator’s work using categories of legal ethics distorts the mediator’s role and if taken too literally, creates cures that go far further than needed for treating the ills of mediator errors. Finally, Isaac Borenstein speaks from his substantial experience as both mediator and retired judge as to why our mediation community’s concern may well be overblown. We are continuing to put our heads together with colleagues both inside and outside TMG to come up with best practices to address the issues raised by this decision. — Brad
Mike: The Reid decision may prove to be an “outlier” as mediators are rarely the target of lawsuits. Nevertheless, it holds that when a mediator changes hats and becomes the lawyer for the settlement documentation, it establishes “joint representation” and thereby a heightened exposure to a claim of legal malpractice if there are errors in documenting the settlement. Mediators who are lawyers are thereby put in the uncomfortable position of having to decide whether, after the dispute is settled, to help the parties prepare the legally enforceable document to be filed with the Probate Court.
Joint representation of parties in a matter in which the parties are by definition adverse to each other is permitted by the rules governing lawyer ethics. The principal obstacle is to explain and obtain written consent to the inherent conflict which is created when representing both parties in drafting a complex legally enforceable settlement document. Moreover, requiring the parties to obtain separate legal counsel to guide them in consenting defeats the purpose of providing access to affordable mediation. Since they are unrepresented there is always a concern as to whether the consent was fully “informed” and whether the lawyer will be exposed to a claim if there are later issues with the settlement as occurred in Reid. Even if the consent has been properly obtained, the lawyer is still responsible for errors in the drafting of the documents.
In most civil claims that come to a mediator, the parties are represented by counsel. If the matter is settled, the mediator often will draft a summary of the settlement terms for the parties to sign after their counsel review it and thereafter counsel prepare more formalized settlement documents. The mediator is not responsible for errors that may occur in drafting the settlement documents. In cases involving unrepresented parties in a divorce, the issue for the lawyer/mediator is whether to take on the added responsibility of drafting the settlement document that is ordinarily prepared by counsel for parties who are represented.
Although most states permit mediators to draft separation agreements in the settlement of divorce cases, the Reid case highlights the risk of doing so.
Jeff: We have an active family law mediation practice which features a co-mediation team consisting of a therapist/mediator and a lawyer/mediator. Though we don't know whether and to what extent the Reid opinion will become law, we have made a change in our Commitment to Mediate. The lawyer/mediator of our team has usually been tasked with preparing a Separation Agreement for the parties. The lawyer/mediator now is available to prepare a “Draft Separation Agreement.” We require that both parties consult separate counsel and have their individual lawyers review the Draft Separation Agreement and approve or modify its terms. The parties will rely on their individual attorneys, and not the lawyer/mediator, as they complete their Separation Agreement for filing.
Flávio: As mediators scurry to understand the implications the Reid case may place on their practice, many are also noticing the serious financial implication this may have on unrepresented parties.
Although several states allow mediators to draft Settlement Agreements, several others do not. Many others find themselves somewhere in the middle, with variations of what mediators can and cannot do when it comes to drafting a final Settlement Agreement. In Massachusetts, for example, lawyer/mediators are allowed to act as scriveners if they make certain disclosures, while in New York mediators are prohibited from acting in such a capacity without first satisfying the “disinterested lawyer” test.
Even where mediators are prohibited from drafting Settlement Agreements, lawyer/mediators often find themselves being asked to memorialize the parties’ agreements upon the completion of a successful mediation session. This is often, but not exclusively, requested by unrepresented parties, as parties that are represented already have an attorney who can draft a legally binding agreement for them. Unrepresented parties greatly benefit from this function by avoiding the cost of hiring attorneys to draft and review a Settlement Agreement, and the lawyer/mediator is in an advantageous position to perform both functions at a reasonable value. Nonetheless, this dual role creates a plethora of problems that are highlighted by this case.
At first glance, we see that this decision has put the entire mediation community on edge. The fear of being subject to legal malpractice for mediating a dispute to finality is already deterring many mediators from providing the same services they have been providing for years. Not only is this stressful for the mediators, but it is a dilution of the overall practice. The mediation process itself is invaluable, but without a binding agreement to hang your hat on at the end of the day, it becomes much less useful.
Of course, the group of individuals most seriously harmed are the unrepresented parties, who would have to cover — on top of the mediation fees — the additional expense of hiring an attorney at the end of the process to make their agreement binding. One of the questions I hear the most when a Memorandum of Understanding is brought up is whether the agreement is binding. Parties will likely ask themselves, “why go through a mediation just to have an agreement in the end that is not enforceable?” This decision creates a limitation that may deter parties from mediating altogether since the agreement generated at the conclusion of the mediation is no longer binding.
The Honorable Judge Budreau is keen to point out that the Defendant should not be able to avoid liability simply for acting in his capacity as a mediator. Malpractice is malpractice, whether it is done by a mediator or a lawyer. Simply having parties sign an agreement that indemnifies the mediator cannot be enough to waive all claims that may arise against the mediator. The mediation community is scrambling to come up with steps that mediators can take to ensure they are covered and still able to do their jobs effectively.
Brad: My quarrel with Judge Budreau’s opinion is not so much with the result on a motion to dismiss on these facts, but with parts of his rationale that raise questions about the very core of the role of the mediator. I have no problem with mediators being held accountable for their negligence. If mediators carelessly draft documents that parties rely upon, violate confidentiality or mislead parties without the parties having the ability or resources to check the misrepresentations, then a mediator may properly run the risk of answering for the consequences those acts may cause. But I would suggest that those are better understood as incidents of mediator negligence, not legal malpractice. Judge Budreau finds that the mediator here, if the facts are proven, is engaging in the practice of law, thus “representing” both parties, therefore invoking the rules of legal ethics prohibiting or conditioning dual representation. He even suggests that this dual representation raises questions about the mediator’s “independence.” The analysis misunderstands the role of the mediator as I believe mediators, parties and counsel for parties experience it.
The point may best be made by looking at some of the remedies that are suggested for the problem of the lawyer/mediator who is “representing” both parties when drafting an agreement. One such remedy is to have the parties execute a “Joint-Engagement Agreement” in which they knowingly, after explicitly consulting with counsel, agree to have the lawyer/mediator draft the separation agreement in what might be called a purely scrivener role. In fact, to keep the role pristine, a provision of such agreements will often state that if in the course of the joint-engagement, the mediator or clients become aware of an unresolved, material divorce-related issue, where the parties have conflicting interests, the mediator must withdraw from the engagement! But that’s precisely the moment the parties need their mediator, to provide the functions that a good lawyer/mediator should have been providing all along — explaining the law, dealing with its uncertainties, involving counsel if necessary and available, helping the parties work through their conflicting interests and assisting them to find solutions that work for them — keeping an often touchy settlement process on track. Turning lawyer/mediators into pure lawyers in a “conflict” radically denies mediators their most important functions.
Isaac: As a former judge myself, I am well aware that the decisions and opinions issued by those wearing black robes are not infallible — they necessarily reflect the limits of that judge’s own experience and perspective. I believe that the Reid opinion issued by Judge James Budreau is no exception. With a background as a criminal defense attorney with, I’m guessing, little or no mediation experience himself, Judge Budreau may be somewhat less familiar with some of the important subtleties and nuances of the practice of mediation.
In my own experience as a mediator, I know of no mediation where the mediator does not discuss legal theories and evidentiary support for same. Doing so does not cross the line from mediating to the practice of law, generally speaking. In fact, in my experience it is rare if ever that a mediation can go forward without some discussion of these parts of a disagreement. In order to find that a mediator has gone "too far" and crossed the line into the practice of law, there would have to be, in my mind, more specific discussion in such an opinion about just how the mediator did this. That is missing from this decision.
Let’s also put this order in perspective. It’s from one Superior Court Judge, so it carries no precedent as a matter of law. Furthermore, it’s a decision on a Motion to Dismiss under Massachusett Rules of Civil Procedure, which is easier to survive by a plaintiff than even a baby kangaroo in her mother’s pouch — especially in state court, and in particular in Massachusetts state court. While it may be healthy and wise to re-examine our practices from time to time, I believe that many have overreacted to this decision — it is one judge’s opinion, not settled law and should not induce panic in the field.
(Previously published in the Spring 2022 Newsletter)