23.3 Mediation

• Library: Virginia Construction Law Deskbook (Virginia CLE) (2019 Ed.)

23.3 MEDIATION

23.301 Virginia Statutes and Regulations. Mediation is often used as the ADR process of choice for construction cases. Virginia has a number of statutes that deal with the mediation process and establish requirements for reaching a binding settlement of mediated disputes. Section 8.01-576.4 of the Virginia Code and the provisions that follow apply to Virginia's court-referred dispute resolution services, where trained and experienced neutrals participate in dispute resolution proceedings referred to them by Virginia courts. ¹⁹⁶ Under section 8.01-576.5, the court, on its own motion or on motion of one of the parties, may refer any contested civil matter, or selected issues in a civil matter, to an orientation session to seek to move the matter into mediation or some other dispute resolution option. Upon referral, the parties must attend one orientation session, unless excused for limited reasons. After that orientation meeting, further dispute resolution proceedings require consent of all parties.

Most significant construction cases are not mediated under Virginia's court-referred dispute resolution services but are mediated through ADR

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providers or private mediators, and are covered by section 8.01-581.21 et seq. of the Virginia Code. Certified mediators who participate in these mediations still have obligations under sections 8.01-576.4 and 8.01-576.12. Section 8.01-581.21 defines mediation as "a process in which a mediator facilitates communications between the parties and, without deciding the issues or imposing a solution on the parties, enables them to understand and to reach a mutually agreeable resolution to their dispute." This section, and the sections which follow it, generally establish the statutory framework for most construction mediations in Virginia.

Section 8.01-581.22 of the Virginia Code contains rules on confidentiality and exceptions to the confidentiality of mediation papers. This section provides in pertinent part:

All memoranda, work products and other materials contained in the case files of a mediator or mediation program are confidential. Any communication made in or in connection with the mediation, which relates to the controversy being mediated, including screening, intake and scheduling a mediation, whether made to the mediator, mediation program staff, to a party, or to any other person, is confidential. However, a written mediated agreement signed by the parties shall not be confidential, unless the parties otherwise agree in writing. ¹⁹⁷

The Code specifically states that the use of attorney work product in a mediation does not result in a waiver of the attorney work product privilege. ¹⁹⁸ Mediation memoranda, work product, or other materials are exempt from the Virginia Freedom of Information Act. ¹⁹⁹

Parties may be sanctioned for violating these confidentiality rules. ²⁰⁰ But it has been held that objections regarding the admissibility of confidential mediation communications must be made at the time of the trial court's

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ruling. Such objections may not be made for the first time on appeal. ²⁰¹ There are a number of statutory exceptions to these confidentiality requirements that should be reviewed before participating in mediation. ²⁰²

Sections 8.01-576.9 and 8.01-581.23 of the Virginia Code provide civil immunity to a mediator certified pursuant to the guidelines promulgated by the Judicial Council of Virginia. ²⁰³ Under section 8.01-581.23, civil immunity also extends to individuals who are trained and serve as mediators through the statewide mediation program established pursuant to section 2.2-1001(2). However, under either Code section, acts or omissions committed in bad faith, with malicious intent, or in a manner exhibiting a willful, wanton disregard of the rights, safety or property of another are not protected.

Sections 8.01-576.9 and 8.01-581.24 set forth standards and duties for mediators and the obligation to maintain confidentiality. Generally, a mediator may encourage and assist the parties in reaching a resolution of their dispute but may not compel or coerce the parties into a settlement. A mediator has an obligation to remain impartial and free from conflicts of interest, and also to preserve confidential information. For attorney-mediators, these code sections must be read in conjunction with the Virginia Rules of Professional Conduct Rules 2.10 and 2.11 discussed below. ²⁰⁴

Sections 8.01-576.11 and 8.01-581.25 of the Virginia Code provide that any written agreement reached disposing of the dispute may be enforced in the same manner as any other written contract. Upon the request of all parties, and consistent with law and public policy, any written agreement may be incorporated into a final degree disposing of the case by a court.

Sections 8.01-576.12 and 8.01-581.26 provide the grounds for vacating a mediated agreement. The grounds are:

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(1)	The agreement was procured by fraud or duress, or is unconscionable;
(2)	If property or financial matters in domestic relations cases involving divorce, property, support or the welfare of a child are in dispute, the parties failed to provide substantial full disclosure of all relevant property and financial information; or
(3)	There was evident partiality or misconduct by the mediator, prejudicing the rights of any party. 205

Under both of these code sections, "misconduct" includes:

The failure of the mediator to inform the parties at the commencement of the mediation process that: (i) the mediator does not provide legal advice, (ii) any mediated agreement may affect the legal rights of the parties, (iii) each party to the mediation has the opportunity to consult with independent legal counsel at any time and is encouraged to do so, and (iv) each party to the mediation should have any draft agreement reviewed by independent counsel prior to signing the agreement. ²⁰⁶

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