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Does a mediator practice law when he or she provides opinions involving legal issues? Nothing stirs a more heated debate in the mediation community than the question of whether a mediator is engaging in the practice of law when he or she performs these common mediation activities. Often, there can be as many divergent points of view as there are people involved in the discussion. Many would prefer not to open this can of worms because the ramifications of many of the answers would radically change the field of alternative dispute resolution. If the mediator or arbitrator is practicing law, that person has legal duties toward his clients that are inconsistent with the role of a third-party neutral. These duties include zealous advocacy and the avoidance of representation of adverse interests. It is hard to imagine how a mediator or an arbitrator could be neutral while discharging these duties. In addition, an attorney is obligated to keep a client reasonably informed about significant developments. In other words, a person who mediates between two law (as opposed to mediation) clients cannot be given information in confidence because he or she would be required to disclose such confidential information to the other person. As a practical matter, a person will become disqualified from acting as a mediator or arbitrator the moment he starts to practice law in that case. Although the parties to the dispute may waive the mediator’s conflict of interest, such a waiver would be impractical. The drafting would be extraordinarily difficult to prepare given the need to anticipate and disclose all of the possible consequences of the conflict and the mediator’s limited knowledge of the case. Therefore, if the mediator or arbitrator begins to practice law before the ADR process is completed, everyone involved will have wasted time and money. Accordingly, it is very important that a bright line be established that divides mediation and other forms of ADR practice from the practice of law. This issue is particularly timely because California is currently exploring ways to change the Rules of Professional Conduct that govern attorney behavior. The Commission on the Revision of the Rules of Professional Conduct has embarked on a five-year mission to explore and propose changes to the ethics rules. It is believed that the commission will address the definition of the practice of law within the next couple of years. As a result, it is time for the ADR community to articulate a framework for discussing how the practice of law relates to mediation and other ADR processes, a framework that can be sensibly applied to current practice. The purpose of the Rules of Professional Conduct is to “protect the public and to promote respect and confidence in the legal profession.” The rules are designed to protect the public from attorneys, not from mediators or arbitrators. To be sure, this does not mean that an attorney has an exemption from violating the rules when acting as a mediator. Indeed, an attorney has the same duties of honesty when acting as a mediator as he or she would when engaging in other non-legal activities, such as taking out a bank loan. Instead, the fundamental question is: To what extent does a person, by virtue of acting as a mediator or other third-party neutral, become subject to the duties of a lawyer in the Rules of Professional Conduct and the State Bar Act? In other words, where is the line drawn between the role of a neutral mediator/arbitrator and the role of an attorney? The simplest and clearest line that can be drawn concerns the terms of engagement. A mediator or other third-party neutral is engaged for a much different task than an attorney. The ADR professional is engaged by two or more parties as a third-party neutral to provide assistance in resolving a dispute. An attorney is engaged by one or more people to represent their interests in providing legal services. The difference is that, unlike an attorney-client relationship, the parties cannot reasonably expect the mediator or arbitrator to represent and protect their interests. An example of this distinction can be seen in a situation between two people who enter into a business partnership. If they want someone to prepare partnership papers, they hire an attorney who will be subject to the Rules of Professional Conduct. That attorney is not hired as a third-party neutral. While the two partners may have divergent interests that require appropriate disclosures by the attorney, that attorney is hired to provide a legal service rather than a mediation service. On the other hand, if the two partners wind up in a dispute and hire the attorney as a third-party neutral to assist them in resolving the dispute, the attorney is not practicing law and is not subject to the rules. The critical distinction is whether the client or clients are hiring the attorney to represent them and provide legal services or hiring a third-party neutral to assist in the resolution of a dispute. This distinction accomplishes the objective of the ethics rules — the protection of the public — because it focuses on the client’s understanding of the relationship. The rules are designed to protect the public from attorneys who are hired to represent them, not from third-party neutrals in their capacity as mediators and arbitrators. This does not mean that the public is unprotected from abuses in the ADR field. ADR neutrals are professionals and are subject to actions for professional malpractice. Insurance for ADR malpractice is available. Standards for mediation practice have been developed by the California Judicial Council and the California Dispute Resolution Council. If a mediator is negligent, the remedy lies in an action for mediator malpractice. The remedy does not come in the form of disciplinary action from the State Bar. Indeed, the Rules of Professional Conduct do not even address standards of practice for mediators and arbitrators. In distinguishing ADR practice from legal practice by the terms of engagement, the current debate tends to focus on the activity being performed by the mediator. In other words, many people evaluate whether a mediator is practicing law based on whether he or she does a task performed by attorneys. Some argue that any activity performed by an attorney on behalf of a client constitutes the practice of law. Under this interpretation, if a mediator gives a legal opinion, he or she is practicing law. On the other hand, many other points of view are based upon “best practices” standards or the phrasing of the opinion. There is a wide range of styles for discussing the legal ramifications of the dispute. For example, some mediators will approach these discussions through indirect questioning: “What do you think will happen if you try this case?” “If you tried this case 10 times, how many times would you prevail?” “What do you think the chances are that a judge may exclude the critical piece of evidence at trial?” Other mediators will bluntly tell the parties what they think will happen. In between these two styles can be found an infinite number of variations. Evaluating the practice-of-law question based on what the mediator does fails to provide the needed bright line. Since parties want their mediator to become involved in the discussion of legal issues, the practice-of-law determination would always be situational and depend on how the mediator phrased his statement or comment. The practice-of-law determination is complicated by the fact that no consensus exists on where that line should be drawn. The debate on this issue is quite fractured. In fact, it appears that many people argue from an “I know it when I see it” standard rather than an objective test. Compounding this problem is the fact that a mediator’s statements are never recorded. The party may recollect hearing a different statement than the mediator recalls making. The practice-of-law issue is not limited to mediators; this standard affects arbitrators as well. If providing a legal opinion amounts to the practice of law, arbitrators must also be concerned. Although it may be argued that a binding arbitration award is not the same as providing a legal opinion, such a distinction would not apply to non-binding arbitrations or early neutral evaluations. The debate over whether ADR professionals are practicing law is more than an academic exercise. The resulting policy decisions will have a profound impact on how mediations and arbitrations are conducted — or whether they even can be conducted in the first place. A prime goal in this discussion should be the establishment of a bright line that ADR professionals can recognize and choose whether to cross. The brightest line is a determination of whether a person has been engaged to provide services as a third-party neutral in the resolution of a dispute or to provide legal services to a client. Jonathan Gross is a shareholder at Bishop, Barry, Howe, Haney & Ryder in Emeryville. He is the chairman of the State Bar’s ADR Committee and is a volunteer for the Bar Association of San Francisco’s ADR Services.

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