Date: Mon, 05 Apr 1999 11:18:52
From: Richard Zitrin email@example.com
Subject: ADR rules
This e-mail is a partial response to your inquiry about ADR rules. Sorry for the delay. The letter went to my old address. Just by way of background in addition to what you know, I am a AAA-trained mediator and on the AAA commercial mediation panel (as well as their arbitration panel, though I prefer to mediate.) I've also written several articles on ethics and mediation.
First, can Sue Campbell or someone get me the Virginia, Tennessee and Menkel-Meadow proposals? Is it part of the Commission's package? I'll cc Sue on this e-mail.
Before getting to your second, issue, I think it is of crucial importance to distinguish between a neutral acting as an arbitrator and one acting as a mediator. The failure of the SPIDR rules to be truly effective is due in large part to lumping the two together. Arbitrators are quasi-judicial in function and under no circumstances can be construed to represent a party. Mediators, on the other hand, have no decision-making authority. They may, however, be construed to be representing a party at least when the parties appear before the mediator without counsel (e.g., if a family law mediator says "well, I won't tell you how to divide it, but the pension plan would be community property in this state.") The rules should distinguish between the two. Ideally there should be two rules in some situations.
Now as to your second question: Mediators who have completed their service do not have a conflict of interest by later representing one of the parties in a new matter. Arbitrators should be dealt with in the same way as judges. However, neither should be able to act for either side in the same or a substantially-related matter, and either should the law firm. This would violate the ethics of being a neutral more than lawyers' ethics (which I think is why you're looking at new rules). The biggest problem here is that the neutral's former neutrality is compromised.
Why the law firm? First because the same rules should apply to neutrals who are also lawyers. Second, at least in areas of the country like the SF Bay Area, more and more lawyers are becoming full time or at least independent neutrals, severing their law firm ties, which is the price of avoiding the law firm conflict.
Third, the duty of candor issue is one I addressed in my comments to the Commission last May. To summarize, my belief is that the "false statement of material fact" standard in both 3.3 and 4.1 is troublesome in this context. I am especially troubled by Comment paragraph 2 to 4.1, which is disingenuous at best. Statements as to value are the *most* material things in negotiation, and declaring them and other matters "not material" by fiat is in appropriate. I would simply exempt negotiations from the rule.
I do not believe one can write a rule that successfully draws a line between the duty of candor and the ability to puff in negotiation. Negotiation is inherently deceptive. There's always something being held back. I wouldn't change 3.3, but I'd change the 4.1 comment.
There's another issue: disclosure. You've made great strides with 1.6 disclosure (and I hope will go to a California-like standard of what needs to be disclosed, if I may put in a plug.) Disclosure *by* neutrals should be broad, as broad as possible. For mediators, at least, it should include *any* relationship whatsoever between the lawyer or the lawyer's firm. All of this is waivable and in mediation, familiarity with the participants and especially the lawyers makes resolution easier. I'd like to think about arbitrator disclosure too.
I've done a couple of programs on disclosure by neutrals in which I tell the story about disclosing that a famous athlete (whom I never met) was someone I long admired and who had been on my "fantasy" team. People laugh and think that's silly, but how could the disclosure hurt? Indeed, I used my admiration of him as capital during the mediation. So why not disclose? Realistically, however, disclosure this broad should be relegated to a suggestion in a comment.
A final issue: Disclosure by the neutral and the neutral's agency (tough to regulate if it's not a law firm, though one could require the lawyer to require the agency like AAA to do it) of ongoing professional relationships with one of the parties *in the role as neutral.*
Here's what I mean: AAA gets all of INSCO's third party insurance claims to arbitrate or to mediate. Jo(e) Mediator gets repeat business from BIGCO on employment matters and PLAINTLAW on third party insurance matters. There should be a duty to disclose the ongoing nature of the relationship. At this point I haven't thought about how, but I will if you like.
Univ. of San Francisco School of Law
c/o Zitrin & Mastromonaco, LLP
445 Bush Street, Suite 600
San Francisco, CA 94108
Telephone: (415) 864-5959
Facsimile: (415) 732-7555