STATE BAR OF CALIFORNIA
STANDING COMMITTEE ON
PROFESSIONAL RESPONSIBILITY AND CONDUCT
June 21, 2000
American Bar Association
Commission on the Evaluation of the
Rules of Professional Conduct
Attention: Susan Campbell
541 North Fairbanks, 14th Floor
Chicago, IL 60611
Re: Proposed changes to Model Rule 1.12 (Public Comment Draft, dated April 18, 2000);
Proposed new Model Rule 2.x (Public Comment Draft, dated April 18, 2000)
I write on behalf of the State Bar of California's Standing Committee on Professional Responsibility and Conduct (COPRAC), whose activities are funded in part by the Foundation of the State Bar of California. COPRAC offers the following comments on the above-referenced draft rules:
1. We applaud the Commission for attempting to address the ethical obligations of a lawyer who acts as a third-party neutral (TPN). Many lawyers now provide services as a TPN as part of their practices. It is important that these lawyers be provided some guidance in this growing area. Having said this, however, we note that the development of standards for alternative dispute resolution (ADR) presents challenging regulatory issues, including a threshold policy question of whether ADR regulation should reside within lawyer professional responsibility codes. In providing our comment, we take no position on this issue as it involves a variety of considerations that are best examined on an individual state basis.
Putting aside the policy issues, the substantive ethical considerations involved in ADR nevertheless are complex . The different kinds of ADR services a lawyer might offer (e.g., as an arbitrator or mediator) may implicate different ethical obligations for the lawyer. The proposed rules, however, do not appear to draw these distinctions. We believe that the issue of ethical considerations in ADR requires a broader analysis of the issue with the goal of drafting standards that are more comprehensive than the two above-referenced rules. We also recognize, however, that such an effort would delay the work of the Commission on the other rules. Therefore, we recommend that the ABA undertake a separate investigation into the ethical obligations of lawyers who act as TPNs. In the meantime, however, we believe that the standards set forth in Rules 1.12 and 2.x should provide guidance in this important area, subject to the following suggestions.
2. Rule 1.12 distinguishes between lawyers who serve as part time judges in paragraph (a), (see comment  to draft, which defines "adjudicative officer" to include "lawyers who serve as part-time judges"), and lawyers who serve as arbitrators, mediators and other third party neutrals in paragraph (c). The practical effect of this distinction is that the personal disqualification of lawyers who serve as part-time judges will not be imputed to other members of their firms so long as the former "part-time judge" is screened, while screening is not available to avoid the personal disqualification of lawyers who serve as private TPNs. We believe that this broad distinction is an example of what can occur when an ethical rule is painted with strokes that are too broad. Comment  to draft Rule 1.12 suggests that private TPNs are more likely to have access to information that the lawyer is obligated to keep confidential under the rules or agreements governing such proceedings. Nevertheless, under both paragraph (a) and (c), the neutral is personally disqualified unless the parties consent. The only difference is whether a screen will avoid the imputed disqualification of other members in the neutral's firm. Putting aside the fact that part-time judges might also be exposed to confidential information, just as private TPNs, e.g., arbitrators, may not be so exposed, this distinction does not make sense unless it is drawn for the same reason that non-consensual screening is allowed for migrating government lawyers: if the rule did not draw the distinction between "public" adjudicators on the one hand, and "private" adjudicators on the other, courts would have difficulty attracting able lawyers to assist them as part-time judges. If we are correct in our assumption, then we suggest that the Commission include a comment to this effect, perhaps something similar to comment  to current Rule 1.11.
3. Paragraph (b) of the proposed rule, which prohibits judges from negotiating for employment with any person in a matter before the judge, has eliminated the current rule's reference to "arbitrators." We agree with this deletion because, as the Reporter notes in her Explanation of Changes, it is "[c]onsistent with its recommendation that arbitrators receive treatment separate from that of former judges, adjudicative officers and law clerks ... ." We note, however, that in the Reporter's Observations of an earlier draft, the Reporter stated, "A similar prohibition on lawyers who are serving as arbitrators, mediators or other third-party neutrals negotiating for employment with a party or lawyer for a party in a matter in which the lawyer is participating as a neutral, will appear in a separate rule governing lawyers serving in such roles, along with a prohibition on other conduct that impairs the integrity of the proceeding." (Dft. No. 1, 4/12/1999, Reporter's Observation No. 4.) We are not aware of any rule, other than proposed Rule 2.x, which addresses lawyers serving as TPNs. The most recent draft of that rule does not address the duty of arbitrators and other private TPNs not to engage in job negotiations with parties to the proceeding over which they are presiding. We recommend that such a section be added to Rule 1.12.
New Rule 2.x
4. Paragraph (b) of the July 16, 1999 draft of the proposed rule (designated "Proposed Rule 2.Xa"), which addresses disclosure obligations of TPNs, was removed in an earlier draft. The current draft of the proposed rule now includes a paragraph (b) which only requires that the TPN inform unrepresented parties that the lawyer does not represent them or, if "the lawyer knows or reasonably should know that a party does not understand the lawyer's role in the matter," to explain the difference between a lawyer TPN and a lawyer who represents a client. We believe that it is important that a lawyer TPN disclose to the parties any interest or relationship that might affect the lawyer's impartiality. This is no different from the duties a judge would have regarding disclosure to the parties of interests or relationships. Current paragraph (b) does not address this. Accordingly, we recommend that the Commission re-insert the language from the previous draft, which we have included in footnote 1.
5. Paragraph (c)(2) of the July 16, 1999 draft of the proposed rule (designated "Proposed Rule 2.Xa"), which addresses the ethical obligations of lawyers with respect to disclosing or using confidential information acquired while serving as a TPN, was removed in an earlier draft. The ethical obligation to protect confidential information that was found in former paragraph (c)(2) arguably is addressed in Rule 1.12(c) and comment  to that rule, which address a lawyer TPN's obligations when, in the same or substantially similar matter, a present or prospective client has interests adverse to one of the parties in the ADR proceeding. We recommend that the Commission include a comment concerning the lawyer TPN's obligations regarding confidentiality, with a cross-reference to the relevant material in Rule 1.12.
This comment from the State Bar of California Standing Committee on Professional Responsibility and Conduct does not constitute the position of the State Bar of California or its Board of Governors. The Board of Governors is free to submit its own comment on behalf of the State Bar of California.
Robert L. Kehr,
cc: Board of Governors
Randall Difuntorum, Esq. COPRAC Staff Counsel