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The Judicial Council of California unanimously approved minimum ethics standards for private arbitrators Friday, despite concern that some of the provisions are vague and could put the finality of arbitration decisions at risk. But in a rush to meet a legislative deadline, the standards — the first of their kind in the country — were adopted by the council with the stipulation that they be subjected to further review and amended as necessary. “The rules are in effect unless changed,” said the Judicial Council’s Heather Anderson, sounding very Yogi Berra-esque. “They could be further amended.” The standards — which have been praised by consumer groups — are designed to instill more public confidence in consumer arbitration and put an end to questionable practices in the industry. But critics say the standards are not only unnecessary, but could have severe impact on the way arbitration functions — as a private, cheap and binding method of resolving disputes. Anderson, a senior attorney with the council who helped draft the recommendations, said additional public comment is needed. She also advised the council to review the standards after a year, which it agreed to do. The council was mandated to come up with the standards by the passage of SB 475, which was signed into law by Gov. Gray Davis in September. A July 1 deadline was set for implementation. Because the council won’t meet again until August, the vote had to be taken Friday. As it stands now, private neutrals involved in consumer arbitration will be held to the same standards as court-appointed arbitrators. So, after July 1, arbitrators will have to disclose any personal or financial relationships they may have with the parties before them. Arbitrators must also refrain from accepting gifts from anyone who may one day have business before them and make known when they have done prior work for a party. The new standards also allow a party to disqualify an arbitrator if misrepresentations or omissions are discovered following an arbitrator’s assignment. A controversial provision requiring ADR providers to also make known personal and financial ties to clients was pushed back to July 1, 2003, because a bill that would require the same thing has been introduced in the Legislature. Still, no one was convinced that what the council came up with was a perfect document. Among the concerns was that the standards require arbitrators to disclose an enormous amount of information, but do little to preclude parties from rejecting an arbitrator. Council members also worried that if an arbitrator failed to disclose something, no matter how small, an award could be challenged. “What we end up with is a system with serious and substantial changes, some problematic,” said 2nd District Court of Appeal Justice Norman Epstein, who added that a number of provisions were vague. “Any numbers are not entirely clear,” he said. Nonetheless, Epstein gave an “aye” vote. “We are required to do something today, but I would suggest that this be reviewed further,” Epstein said. Lassen County Superior Court Judge Stephen Bradbury echoed that sentiment when he said the California Judges Association, for one, had not had enough time to prepare commentary on the issue. The 19-member blue-ribbon panel that came up with the standards heard from 41 people at public hearings and received 62 written responses. Several critics of the standards complained that the disclosure process was too burdensome and that the finality of arbitration awards could be jeopardized. Chief Justice Ronald George and Justice Marvin Baxter — the only two supreme court members to sit on the council — recused themselves from the discussion and the vote on the grounds that the issue may one day end up before their court. In addition to the arbitration standards, the Judicial Council on Friday also approved ethics standards for court-appointed mediators in civil cases. The council also recommended that presiding judges not assign subordinate judicial officers to do the work of real judges unless a severe manpower shortage made it absolutely necessary. Trying to avoid the constitutional confusion that comes up when SJOs perform judicial duties, the council is asking presiding judges to hold off as much as possible until a bill it’s sponsoring — AB 1698 — passes. That legislation, which has already passed the Assembly, would permit as many as 250 SJO positions to be converted to full-time judgeships in the next 25 years.

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