Settlement conferences

The following article by John Derrick is being published in California Litigation  — a journal of the California Lawyers Association — in spring 2025.

Settlement conferences vs. mediations: A distinction without a purpose?

Question: When is an organized effort by a neutral person to settle a case — with parties and lawyers present — not a mediation? Answer: When it is a settlement conference.

Many lawyers do not focus on the difference. And, in most cases, it ends up not mattering. But there is a key distinction: Settlement conferences — or mandatory settlement conferences (MSCs) — have less robust confidentiality protection than mediations.

What the law says 

Evidence Code section 1117, subdivision (b)(2), states that the mediation confidentiality provisions contained in that chapter of the code do not apply to “[a] settlement conference with pursuant to Rule 3.1380 of the California Rules of Court.”

Rule 3.1380 talks interchangeably about “mandatory settlement conferences” and “settlement conferences.” It does not really define either term, except to indicate they are events “set” by the court on its own motion or that of a party. 

The Advisory Committee comment states: “This provision is not intended to discourage settlement conferences or mediations. However, problems have arisen in several cases… when distinctions between different ADR processes have been blurred. To prevent confusion about the confidentiality of the proceedings, it is important to clearly distinguish between settlement conferences held under this rule and mediations. The special confidentiality requirements for mediations established by Evidence Code sections 1115-1128 expressly do not apply to settlement conferences under this rule.”

What does this mean?

So there you have it. In theory, if a case does not settle, a neutral conducting the conference could provide a full briefing to the trial judge about what took place and was said. Is that likely to happen? Not on my watch, but it could.

Thoughts expressed or admissions made during an MSC — or in an MSC statement — could also be used in subsequent proceedings in that case. And what was said — or not said — could also be brought up in ancillary litigation, such as a malpractice or malicious prosecution action.

That does not mean settlement conferences allow a complete free for all. The rule in Evidence Code section 1152 making offers of compromise inadmissible applies to those made at settlement conferences as much as to ones made at other times. But that’s about it. You get the same protection that would apply in any communications with an opposing party, but nothing more.

Any workarounds?

There is one thing a neutral can do to enhance the confidentiality protections at an MSC. This is to tell the parties he or she will not take anything said from one room to another without express permission. That can narrow, but not eliminate, the confidentiality gap between settlement conferences and mediations. Some lawyers might assume the neutral would follow that protocol, but there is nothing in the law that requires it.

What if the neutral just declares at the outset that the settlement conference will double up as an unpaid mediation? That sounds like a ruse to apply mediation confidentiality as an overlay on top of a settlement conference.

But that wouldn’t work. This is because Rule 3.1380(d) instructs: “A court must not: (1) Appoint a person to conduct a settlement conference under this rule at the same time as that person is serving as a mediator in the same action; or (2) Appoint a person to conduct a mediation under this rule.” That seems to preclude the tandem approach. 

However, although the rule does not allow a neutral to simultaneously conduct a mediation and settlement conference in the same matter, there seems nothing to prevent the neutral terminating the settlement conference at a certain point and then — if the parties consent — proceeding with a mediation then and there.

Whether a neutral would do that at the outset is another matter. If a court has ordered a “settlement conference,” it presumably behooves the neutral and the parties to proceed along that track in good faith before switching to a mediation.

But MSC-to-mediation transitions do occur. It is quite common for courts to use volunteer settlement officers to conduct MSCs lasting for up to, say, three hours. Sometimes, the settlement officer continues to volunteer if there is traction but more time is needed. But often the settlement conference morphs into a private, paid mediation immediately after the pro bono time.

That can, in practice, be a little awkward. Even though the participants might feel they are taking part in a seamless, continuous event, there is actually a change of procedure and of confidentiality rules. And you really need a mediation agreement in place before the transition occurs.

There is generally no such thing as an “MSC agreement” that could already provide for a potential transition, simply because MSCs, in their nature, are not something to which you agree, but, rather, in which you are ordered to participate. Hence the word “mandatory.” (To the extent that some settlement conferences might not be mandatory, the law does not distinguish between those that are and those that aren’t — unless you take the view that one that isn’t is, by definition, a “mediation.”)

What makes something a “settlement conference?”

The awkwardness of having different rules in place for the two types of event is accentuated by the fact that it is not always obvious whether a court-enabled settlement event is a mediation or a settlement conference. In Raygoza v. Betteravia Farms (1987) 193 Cal.App.3d 1592, the Court of Appeal tried to define the elements of a “settlement conference” in order to distinguish it from a “mediation.” And it identified five indicia of settlement conferences:

• “Mandatory” or “supervised by the court.”
• Conducted by a judicial officer, rather than a private party.
• Placed on the court’s calendar, as opposed to being arranged before a private party.
• Conducted using the court’s facilities.
• No cost to the parties.

The court was not saying an event necessarily had to check all five boxes in order to be a settlement conference. But one that did would definitely qualify.

Applying those five criteria to a given court settlement program does not always lead to a clear answer. Take the excellent Second District Court of Appeal program as an example. The court refers to this as a “mediation program.” But it has some of the hallmarks of a settlement conference program:

• Although participation is voluntary at the outset, once the parties sign up, they are subject to mandatory requirements and procedures that are the subject of a court order.
• The neutrals in that program are no longer judicial officers, as was originally the case. But the court selects the neutral out of a panel of volunteers that it appoints. That is not much different from settlement conference programs where courts maintain panels of volunteer attorney settlement officers.
• Events in this program are placed on the court’s calendar. There are docket entries both to announce an upcoming event and to record its having taken place and the outcome. And, what’s more, those docket entries use the term “settlement conference,” not “mediation.”
• Events under the program can use the Court of Appeal conference rooms in Downtown Los Angeles.
• Like many court programs, this one allows for a certain amount of “free” time, generally three hours pro bono on the day plus preparation time (with the neutral able to charge his or her hourly rate beyond that if the parties agree).

So at first glance, one might consider that, on balance, events under this program are “settlement conferences,” not “mediations.” But I’ve been on the Second District panel since 2008 and I tend, nonetheless, to think they are mediations. The reason is that the court’s pro forma confidentiality agreement contains provisions consistent with mediation.

The use of that form does not appear to be mandatory, but it does signal what the court intends the proceeding to be. And if a court does not intend something to be a “settlement conference,” then it should probably not be construed as such even if docket entries refer to it that way and other Raygoza factors appear to apply.

But that’s just what I think. I’m not aware any authority that speaks to the intent of a court as the pivotal factor. I suppose another way of getting to the same conclusion about this particular program is to rely on the fact that Rule 3.1380 is part of the Civil Rules, which cover trial courts (see Rule 3.10), such that — arguably — the law does not recognize “settlement conferences” as a “thing” at the appellate level even if the term is sometimes used.

What’s the point?

The distinction between settlement conferences and mediations may have its origins in the fact that, historically, the former were conducted by sitting judges — sometimes, in fact, the same judge who presided over a case. These days, some courts still assign judges to hear settlement conferences. But it is becoming less common. This is likely due to a combination of pressure on judicial resources and the readiness of members of the Bar to step up and volunteer as settlement officers.

If the judge presiding over the case is the one who conducts settlement conferences, then I can see how mediation confidentiality wouldn’t, as a practical matter, work. That’s especially if the judge will be conducting a bench trial.

But having the trial judge perform double duty as the settlement officer in the same case is not a great idea. It compromises both functions. And trial judges have plenty of opportunities to nudge parties in the direction of settlement without actually conducting settlement conferences. The bench is an effective bully pulpit.

If another judge acts as a settlement officer, then there is no inherent reason why mediation confidentiality rules should not apply. Unless, maybe, there is some underlying — and misguided — concern that judges should not be constrained.

So what policy goal is served by the distinction between mediations and settlement conferences? I really cannot think of any. It is a distinction without a purpose.

In fact, it is a distinction that works against the public policy favoring settlement. The purpose of mediation confidentiality is to encourage free-flowing communication without fear that thoughts or ideas will come back to haunt. Since the purpose of settlement conferences is, presumably, to promote settlement, it makes no sense to omit a key rule designed to help achieve that end.

Memo to lawmakers and rule makers: The law should be changed to remove the distinction. By all means continue to use the term “settlement conference” to refer to this subset of mediations. But apply mediation confidentiality rules. And while you’re at it, add a provision that a judge presiding over a case cannot serve as a settlement officer or mediator in the same matter.

John Derrick — a former Editor-in-Chief of California Litigation — is a mediator with Alternative Resolution Centers (ARC) and serves on the national roster of the American Arbitration Association. Before transitioning into full-time ADR, he had a solo appellate practice for many years. www.johnderrickADR.com.