Assembly Bill 1950 adds Section 1775.16 to the California Code of Civil Procedure, creating an exception to the existing limit on court-ordered mediation. That limit, found in Section 1775.5, bars a court from ordering a case into mediation where the amount in controversy exceeds $50,000, a ceiling that rises to $75,000 on January 1, 2027. Most employment cases, which typically include claims for emotional distress damages, statutory penalties, and attorney fees, exceed either figure. Section 1775.16 removes that ceiling for judges of the Los Angeles County Superior Court, who may now order civil cases into mediation regardless of the amount in controversy. The new section takes effect January 1, 2027, and operates as a pilot program through January 1, 2032, unless extended by the Legislature. For employers, this brings employment cases pending in Los Angeles within the reach of court-ordered mediation.

Once the court issues an order implementing the pilot program, any case ordered into the program is entitled to up to three hours of mediation at no cost through a court-sanctioned program. Parties may appear remotely. Court-ordered mediation cannot delay the trial date or serve as grounds for a continuance. The court is required to report the results of the program on or before January 31, 2028, and annually thereafter.

Every other requirement of Section 1775.5 that becomes effective on January 1, 2027, will still apply. A case may be ordered into mediation only after it has been set for trial. At least one party must have notified the court of its interest in mediation, and there can be no ongoing discovery disputes affecting the case. The parties may stipulate to a mediator of their choosing. If they cannot agree within 15 days, the court selects one. Mediation must conclude no later than 120 days before trial.

Another important consequence of AB 1950 is that it entitles the parties to free mediation. In contrast, private mediation fees in employment cases are expensive and the fees are typically split between the parties. A case ordered into the Los Angeles program receives up to three hours of mediation at no cost to either side, and remote appearance reduces the time and expense of attendance. Because the request of a single party is sufficient, an employer may seek a mediation order on its own and may also be ordered to participate at the plaintiff's request. This reality may be attractive for small employers or businesses otherwise on a tight litigation budget.

Court-ordered mediation also carries attendance obligations under the California Rules of Court. A business party must send a representative with authority to resolve the dispute. Any insurer that may cover the claim, including an employment practices liability carrier, must also send a representative with settlement authority.

In sum, AB 1950 establishes section 1775.16 to expand the Los Angeles court's no-cost mediation authority from its smallest cases to cases of any value, including all employment matters.

This publication is published by the law firm of Ervin Cohen & Jessup LLP. The publication is intended to present an overview of current legal trends; no article should be construed as representing advice on specific, individual legal matters. Articles may be reprinted with permission and acknowledgment. ECJ is a registered service mark of Ervin Cohen & Jessup LLP. All rights reserved.