In October 2025, the American Bar Association (ABA) issued Formal Opinion 518, "A Lawyer's Duties to Avoid Misleading Communications When Acting as a Third-Party Neutral Mediator." It is the first ABA opinion to apply the professional responsibility rules directly to lawyers serving as mediators, and its central insight is one every neutral should internalize: The ethical terrain shifts beneath your feet when you stop being an advocate and become a neutral. Like all ABA formal opinions, it is persuasive guidance rather than binding law, but its reasoning tracks with the California rules that do govern.
A lawyer negotiating for a client operates under Rule 4.1 of the ABA's Model Rules of Professional Conduct and its California counterpart, which bar false statements of material fact but tolerate the conventions of negotiation--puffery, posturing, the guarded disclosure of a bottom line. Opinion 518 makes clear that the lawyer-mediator enjoys no such safe harbor. Because the mediator represents no one, Rule 4.1 does not apply at all; what governs instead is the prohibition on dishonesty, fraud, deceit and misrepresentation. The neutral occupies a position of enhanced trust, and the rules demand correspondingly greater precision.
That prohibition is codified in Rule 8.4(c) of the California Rules of Professional Conduct (CRPC), which makes it misconduct to engage in conduct involving dishonesty, fraud, deceit or reckless or intentional misrepresentation. The phrase "reckless or intentional" is California's deliberate refinement: Negligent misstatement alone is not disciplinable dishonesty under the rule. But Rule 8.4 does not stand alone. Comment [4] preserves Business and Professions Code (BPC) section 6106, which reaches acts of moral turpitude, dishonesty or corruption "whether intentional, reckless, or grossly negligent"--a broader net on the culpability axis. For the lawyer-neutral, both apply regardless of role, and neither contains a negotiation-convention exception.
Ethical obligations beyond advocacy
That raises a question Opinion 518 does not answer but California has: What happens when a mediator, sworn to neutrality and truthfulness, observes another lawyer's serious misconduct in the mediation itself? Since Aug. 1, 2023, CRPC Rule 8.3 has required a lawyer to report another lawyer's reportable misconduct--dishonesty, fraud, misappropriation--to the State Bar. On its face, that duty might seem to compel disclosure of what the neutral witnessed. It does not. Rule 8.3(d) expressly carves out "mediation confidentiality," placing it alongside the lawyer-client privilege and the duty of confidentiality under BPC section 6068(e). The reporting duty simply does not reach information held subject to mediation confidentiality. The drafters anticipated the collision and resolved it before it could arise.
When confidentiality overrides reporting obligations
Here is where the difference between settlement processes becomes consequential, because not all of them are protected in the same manner. In California civil practice, the mandatory settlement conference is rarely a matter of election--the trial court orders it as a routine incident of bringing a case to trial. The real decision facing litigants is usually not which forum to choose, but whether to invest in private mediation and foreclose a settlement conference if the case settles, or if it does not, in addition to the conference the court will require. That decision turns on confidentiality above all else: The protection that shields a mediation is a different--and far stronger--thing than the protection afforded a settlement conference.
Statements made in settlement negotiations, including a court's mandatory settlement conference, are governed principally by Evidence Code sections 1152 and 1154. Those statutes are rules of admissibility, not confidentiality. They bar settlement offers and negotiation statements from being admitted to prove liability, but they do not make those communications privileged, do not render them broadly non-discoverable and do not bar their use for other purposes, such as impeachment or proof of bias. As the Court of Appeal observed in Covell v. Superior Court (Covell v. Superior Court (1984) 159 Cal.App.3d 39), the protection afforded settlement offers does not elevate them to the status of privileged material.
Mediation confidentiality under Evidence Code sections 1115 through 1128 is categorically different. Section 1119 bars mediation communications from being admitted or discovered, and bars compelled disclosure, in any noncriminal proceeding; subsection (c) commands that the communications "remain confidential." The California Supreme Court has held that the only exceptions are express waiver and due process, and that there can be no implied waiver through conduct (Simmons v. Ghaderi (2008) 44 Cal.4th 570). The protection extends even to a client's later malpractice claim against his own counsel (Cassel v. Superior Court (2011) 51 Cal.4th 113). The practical difference is enormous: What is said in a true mediation is, with rare exception, sealed; what is said in a settlement conference may resurface.
The characterization controls. A proceeding labeled a "mediation" but conducted as a judicially supervised settlement conference may not earn section 1119's protection at all--a line the courts have had to draw (Doe 1 v. Superior Court (2025) 108 Cal.App.5th 790). The label matters less than the substance of what occurred.
Why mediation confidentiality is different
That confidentiality differential is precisely why private mediation earns its place even when a mandatory settlement conference (MSC) is already on the calendar. The near-absolute seal of section 1119 buys candor. Parties and counsel can disclose weaknesses, test settlement ranges and explore creative, nonmonetary terms without fear that today's frank concession becomes tomorrow's trial exhibit--a comfort the admissibility rules governing the settlement conference cannot fully supply. A neutral chosen by the parties, often for subject-matter depth, can shuttle between caucuses, surface true interests and broker resolutions a settlement judge working a crowded calendar has neither the time nor the confidentiality framework to pursue. The process is self-determined rather than pressured, which tends to produce durable agreements and to preserve relationships. And section 1118 supplies a mechanism to make an oral settlement enforceable on the spot, capturing the deal before momentum dissipates.
The value of choosing mediation
None of this displaces the settlement conference, nor could it--the court will order one regardless. The conference carries the gravitas of the bench, costs the parties nothing and can move an intractable case through sheer judicial pressure. The two processes are complementary rather than competing: Mediation does the confidential, interest-based work that the MSC's structure does not protect, and the conference supplies the judicial weight that mediation lacks. Where candor, confidentiality, party control and creative problem-solving matter most--and where the downside of a leaked admission is real--the confidentiality and structural flexibility of mediation make the investment worthwhile, whatever the court has scheduled.
Opinion 518's reminder that neutrals are held to a higher standard of truthfulness is, in the end, the other side of the same coin. The process that demands the most candor from the neutral is also the one that best protects the candor of everyone in the room.
Disclaimer: The content is intended for general informational purposes only and should not be construed as legal advice. If you require legal or professional advice, please contact an attorney.