OPINION:  

     These consolidated proceedings involve a broad attack on the arbitration
program established by The Permanente Medical Group, Inc., Kaiser Foundation
Hospitals, and Kaiser Foundation Health Plan, Inc. (collectively,
hereinafter, Kaiser or appellants) for medical malpractice claims.
     In appeal No. A062642, Kaiser seeks review of an order by which the
Alameda County Superior Court denied its petition to compel arbitration of
the claims asserted by respondents, who are members of the family and
representatives of the estate of Wilfredo Engalla (collectively, hereinafter,
the Engallas or respondents), a Kaiser patient who died of lung cancer in
October 1991. n1
     The trial court refused to enforce an arbitration provision contained in
the group medical and hospital service agreement (the Service Agreement)
under which Mr. Engalla had health care coverage, holding that Kaiser had
engaged in fraud in the inducement of the arbitration provision.
     This decision was based on findings that Kaiser knowingly misrepresented
the speed and efficiency of its arbitration program, and that the collective
bargaining agent for Mr. Engalla's employer reasonably relied on those
representations in agreeing to accept the arbitration clause in the Service
Agreement.
 
- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -
 
     n1 Initially, appellants asserted only claims for professional
negligence based on an alleged failure of Kaiser medical personnel to
diagnose Mr. Engalla's cancer sooner, and loss of consortium and support by
his wife and children, respectively.
     After submitting these claims for arbitration--and becoming frustrated
by delays in the process--appellants filed a court action alleging claims of
professional negligence, breach of contract, fraud, breach of the covenant of
good faith and fair dealing, and abuse of process.
 
- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

     The trial court also found that Kaiser and its lawyers committed fraud
"in the specific application" of the arbitration provision by engaging in
dilatory behavior while defending against the Engallas' claims in the
arbitration proceeding that was abandoned after Mr. Engalla died.
     Apparently, the trial court accepted respondents' argument that Kaiser
was engaging in delaying tactics in order to minimize its exposure for
noneconomic damages to Mr. and Mrs. Engalla.
     Finally, the trial court found that the Kaiser arbitration program is
oppressive and unconscionable as currently structured, and that it would be
inequitable to require the Engallas to arbitrate their claims in such a
"corrupt" forum.

     In two related writ proceedings, Nos. A063427 and A063547, Kaiser and
its attorneys seek a writ of mandate directing the superior court to vacate
its order compelling disclosure of 14 documents on the ground that they fell
within the "fraud exception" to the attorney-client privilege.
     The Engallas cross-appeal from this discovery order, arguing that, by
partially disclosing many details about the adoption and operation of its
arbitration program, Kaiser has waived any applicable privilege or work
product protections for all documents relating to its arbitration program.
     The Engallas further contend that Kaiser had a fiduciary duty to fully
apprise its patients of the procedures in use and the implications of
accepting the terms of the arbitration program, which duty was breached by
both inaccurate and incomplete disclosures in its arbitration materials.
     They claim, therefore, the trial court order did not go far enough to
require disclosure of attorney-client communications and work product
generated by Kaiser lawyers on the subject of its arbitration program.

     We conclude that:
(1) the trial court's finding of fraud in the inducement of
   the arbitration provision is not supported by substantial evidence;
(2) the Engallas' claim of "fraud in the application" of the arbitration
   provision must be submitted to the arbitrator;
(3) the trial court's finding that the Kaiser arbitration program is
   oppressive and unconscionable as currently structured and administered
   is not supported by substantial evidence;
(4) all of the Engallas' claims--including their causes of action for
   professional negligence, fraud, breach of contract, breach of the
   covenant of good faith and fair dealing, and abuse of process--
   are arbitrable; and
(5) the trial court erred by refusing to enforce the arbitration
   provision in the Service Agreement.
     Accordingly, we reverse the decision of the trial court and remand with
directions to enter an order granting appellants' petition to compel
arbitration of the claims asserted in the Engallas' complaint.

     In light of our ruling on the enforceability of the arbitration
provision, we vacate the trial court's order compelling disclosure of certain
attorney-client communications and attorney work product, but do so without
prejudice to respondents' right to renew their motion before the neutral
arbitrator, to the extent those materials--as well as others that were sought
but not ordered disclosed--are relevant to respondents' remaining claims.