General Practice, Solo & Small Firm DivisionMagazine
Volume 17, Number 6
MEDIATION AND UPL DO MEDIATORS HAVE A WELL-FOUNDED FEAR OF PROSECUTION?
By David A. Hoffman and Natasha A. Affolder
To many mediators, "UPL" is an acronym with an increasingly ominous ring. This growing concern about the unauthorized practice of law (UPL) arises from reports around the country of charges filed against mediators who are not lawyers. These prosecutions—or in some cases warnings—are primarily directed at divorce mediators as a result of their drafting of detailed marital settlement agreements. However, all mediators have reason to be concerned.
The legal standards governing UPL are highly indefinite, and vary by state. The patterns of enforcement are also unpredictable, and disclaimers in mediation agreements may not be legally effective. Yet the stakes are high, as the potential consequences for a mediator of being found to engage in the unauthorized practice of law range from civil and criminal liability to ethics charges
This article argues that it’s time for new, clear, and uniform standards for distinguishing between mediation and the practice of law.Statutes and Interpretations. The courts have developed five tests to distinguish the practice of law from other activities, a fact that itself underscores the difficulty in defining the unauthorized practice of law (UPL). The "commonly understood" test poses the question whether mediation is commonly understood to be a part of the practice of law in the community. Factors to consider include the extent to which lawyers, as opposed to nonlawyers, in a given community routinely provide mediation services. The "client reliance" test asks whether the parties who use a mediator believe they are receiving legal services. Under this test, whether the mediator is engaging in legal practice could be different in every case, depending on the perspectives of the individual parties. The "relating law to specific facts" test asks whether the mediator is engaged in activities "relating the law to specific facts"—in essence, whether the mediation is an evaluative process. The "affecting legal rights" test defines the practice of law as those activities affecting a person’s legal rights.
Mediations involving litigation matters by definition involve the parties’ legal rights. Even nonlitigation matters (such as neighborhood, family, or organizational disputes) can affect the parties’ legal rights if the mediation results in a legally enforceable settlement agreement. The "attorney-client relationship" test asks whether the relationship between the mediator and the parties is tantamount to an attorney-client relationship. One factor affecting this determination might be whether parties in the mediation were represented by counsel—either at the negotiating table with the mediator and the parties, or in close consultation during the mediation but not actually during the mediation sessions. If not, there is greater risk in some situations that the parties could view the mediator as performing the role of an attorney. These tests underscore the point that there is no fixed definition of the practice of law in the context of mediation or otherwise. Two States Set Standards. Virginia and North Carolina have developed UPL standards specifically applicable to mediation. Rather than relying on any of the tests described above, drafters in these states identified the two most common categories of mediator activities that could be considered the "practice of law": providing legal advice to the parties, and drafting settlement agreements in a manner that goes beyond serving as a scrivener for the parties.
The Virginia Guidelines on Mediation and the Unauthorized Practice of Law attempt to draw a line between providing legal information (which is not legal practice) and giving legal advice (which is). The guidelines define "legal advice" as applying legal principles to facts in such a way as to predict a specific outcome of a legal issue or to direct, urge, or recommend a course of action by a disputant. Under these guidelines, mediators can provide disputants with copies of relevant statutes or court cases, and they may state what they believe the law to be on a given legal topic, without being deemed to be practicing law. However, the guidelines prohibit a mediator from describing the application of the law to the parties’ situation. The North Carolina Guidelines for the Ethical Practice of Mediation and to Prevent the Unauthorized Practice of Law likewise permit mediators to provide "legal information" but prohibit mediators from advising or giving an "opinion upon the legal rights of any person, firm or corporation." Legal information may include printed material; presumably, providing copies of statutes, cases, or rules would fall within this category.
With respect to the drafting of settlement agreements, the Virginia guidelines recommend that mediators serve as scriveners, using only those terms that the parties specifically request and avoiding legal "boilerplate." The North Carolina guidelines state that mediators "should not sign or initial" a memorandum of understanding; if they do, they "shall advise the parties in writing that the signature does not constitute an opinion regarding the content or legal effect of any such document."
From the Virginia and North Carolina guidelines, and the five tests, one can see that the biggest risk areas for mediators who are not lawyers are activities that involve applying legal norms to specific sets of facts and drafting documents that may be legally binding.New Approach Needed. There is widespread disagreement about how mediation should be defined, and this disagreement stands in the way of consensus on the boundary between mediation and UPL. For example, for those mediators who believe that providing the parties with "reality testing" and other kinds of evaluative feedback is not only permissible but often an essential part of the mediation process, the Virginia and North Carolina guidelines are anathema. These mediators believe they are not practicing law and that there is no risk of role confusion because the parties and their lawyers are sophisticated participants in the process. For other mediators, however, any form of evaluation is anathema, because mediation should be solely facilitative. These mediators believe that any definition of the line between mediation—which permits evaluation—and agreement drafting by mediators fundamentally misconstrues the mediation process and debases it. Yet another group of mediators believes that mediation can be practiced in many ways, including evaluative forms of mediation, but are nervous about nonlawyers providing case evaluation and agreement-drafting services. For these mediators, a primary concern is protection of the public from people who are unqualified to provide such services.Integrating Viewpoints. One way to begin integrating these points of view is to focus separately on drafting of settlement agreements and providing legal advice, because these are the two primary areas of concern with respect to UPL. It is difficult to view the drafting of settlement agreements as something other than the practice of law. Restricting such activities to lawyers does not impair the ability of mediators to assist the parties in reaching agreement, because the parties can either hire counsel to draft the agreement or rely on the mediator to help them develop a simpler memorandum of understanding, using their own language.
With respect to providing legal "advice," however, it seems appropriate to create a broad zone of protection from UPL enforcement for mediators. There are two reasons for this. First, it is virtually impossible to draw a sensible line between reality-testing and evaluating the parties’ claims and contentions. Second, unlike the words of a settlement agreement, which define the rights and obligations of the parties, a mediator’s evaluative feedback about a claim or contention leaves the parties in control of the decision whether to create enforceable rights or obligations. So long as the mediator’s "advice" arises in the context of serving as an intermediary, assisting in the negotiation of a dispute, and providing feedback to the parties about their case solely as a function of the intermediary’s role, these activities should not be considered UPL.
David A. Hoffman is an attorney, mediator, and arbitrator at Hill & Barlow in Boston, Massachusetts. Natasha A. Affolder is an associate at the firm.
This article is an abridged and edited version of one that originally appeared on page 20 of Dispute Resolution Magazine, Winter 2000 (6:2).