Disqualifying Post-Med-Arb-Med Conduct by Neutral Does Not Unwind Signed Settlement Agreement
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The monitoring and regulation of mediators and arbitrators is a haphazard business in the United States. It is often said that “mediation is not the practice of law”—despite how often mediators are asked to help parties navigate contentious and confusing legal issues—so many states, such as Colorado, do not regulate the conduct of neutrals, even for court-annexed mediation. This is a convenient determination for the neutrals as it avoids the credentialing and regulatory schemes routinely applied to attorneys, sidesteps the unauthorized practice of law (UPL) rules, and arguably moots the need for malpractice insurance. Parties harmed by unregulated neutrals may, however, question the public protections of this laissez-faire approach.
Even in states that provide some guidelines for neutrals handling court-connected dispute resolution, such as Alabama and Michigan, the system of oversight is almost always less developed than that found for lawyer regulation. For instance, there is no recognized “mediation malpractice bar” and often no grievance-and-discipline procedure. (Florida presents a special case, using an elaborate credentialing point system that reflects education and experience, and provides a detailed disciplinary procedure.)
Arbitrators likewise fall outside any formal governing body (though many affiliate with well-known organizations like AAA or JAMS where quality control is a part of the program). Misconduct is typically addressed through the state court review of arbitration awards, but with no real mechanisms for disciplining the errant arbitrator.
That said, especially when negotiations are conducted combining mediation with arbitration, the legal system may respond. Thus, a neutral who wishes to mediate, then arbitrate (med-arb), and then later establish a more personal relationship with one of the lawyers, may run into rules on partiality that resemble the fairly strict rules of judicial disqualification. But in an unpublished case from Michigan last year, a mediator-turned-arbitrator-turned-mediator-turned-settlement-overseer-turned-vacation-guest-of-defense-counsel, although deemed disqualified on appeal, was never disciplined, and the divorce settlement she helped craft was enforced. See L. Hornberger, Michigan Court of Appeals Reviews Post Arb-Med Conduct of Arbitrator Mediator, Labor and Employment Lawnotes (Summer 2013). The case raises interesting questions of prejudice to parties where a judge’s actions in parallel circumstances would have prompted disqualification, and perhaps the revisiting of earlier rulings.
Read original articleTags: Arbitrator, Michigan, Settlement Agreement, unauthorized practice of law
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