Florida Supreme Court: Mediating senior judges must be retrained

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Alternatives

be potential ethical issues that could ariseconcerning the state’s judicial conduct code,in which the Court authorized senior judgesto act as mediators in 1994.

The opinion and the report cite a 1999study that found that 31 states permit re-tired judges to serve as neutrals while on atemporary judicial assignment or whileavailable for recall. National Center for StateCourts, Regulation of Retired Judges Serv-ing as Arbitrators and Mediators (1999).The committee, in making the recommen-dations that constitute the opinion’s basis,cited the following canons as “areas of con-cern,” where a senior judge serving as a me-diator could violate the code:

• Canon 1, which states that judges mustuphold the judiciary’s integrity and in-dependence,

• Canon 2, which says that judges mustavoid the appearance of impropriety,

• Canon 4, which says that judges’ quasi-judicial activities must not cast doubt ontheir impartiality, and

• Canon 5, under which judges must reg-ulate their extrajudicial activities and fi-

FLORIDA SUPREME COURT:MEDIATING SENIOR JUDGESMUST BE RETRAINED

BY RUSS BLEEMER AND PHILIP SUTTERThe Florida Supreme Court has issued anopinion clarifying how senior judges canmediate in the state’s court system. The newrules probably won’t change practice signifi-cantly, but their long-term effects will con-tribute to elevating mediation’s role in the le-gal system.

The opinion, In re Report of the Alterna-tive Dispute Resolution Rules and Policy Com-mittee on Senior Judges as Mediators, No.SC04-2482, 2005 WL 2898655 (Fla. Nov.3, 2005)(available at www.floridasupreme-court.org/decisions/2005/sc04-2482.pdf )adopts nearly in its entirety the recommen-dations by the Court’s ADR Rules and Pol-icy Committee.

In the opinion, the Court acknowledgesmediation’s distinct practice by requiringsenior judges who want to continue mediat-ing cases to take the state’s 40-hour media-tion certification course.

Florida practitioners and officials saythat most senior judges—that is, retiredjudges still registered to take cases on a recallbasis—who mediate already are certified un-der the state’s scheme, which is one of thenation’s most elaborate mediation certifica-tion programs.

But now, judges will be held to evenhigher standards than other ADR practition-ers. Currently, the rules allow parties to hirenoncertified mediators, including seniorjudges, when courts refer them to mediation.If the parties take a referral, the state courtscan only appoint a certified mediator.

Under the opinion, as of Jan. 1, partiesstill may control the process by hiring themediator of their choice—but if theychoose a senior judge, that judge must becertified.

The result is a definitive state supreme

court recognition that mediation’s neutral-ing and settlement skills are a related, yetseparate area of the legal process—and dif-ferent from judges’ roles.

The symbolic importance may exceedthe practical effects. “We have heard at leastanecdotally that there are some judges thathave not pursued certification and still domediate,“ says Sharon Press, director of theFlorida Supreme Court’s Dispute Resolu-tion Center, in Tallahassee, Fla., which cer-tifies mediators for the state.

She estimates that there are only 30-50senior judges in Florida who maintain theiractive status and also mediate. As of lastFebruary, Florida had more than 5,300 cer-tified mediators, including those registeredas county and family mediators, and medi-ators in the state’s circuit court system.More than 17,000 people had completedthe Florida Supreme Court certified medi-ation training programs.

The Court’s ADR Rules and PolicyCommittee, in its report, found that therewas “no evidence that the Code of JudicialConduct is not working properly in rela-tion to the practice of senior judges servingas mediators.”

Still, the committee considered there to

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“Your community service begins right now. Go get me a beer.”

VOL. 24 NO. 1 JANUARY 2006 ALTERNATIVES 3

ADR BRIEFS • ADR BRIEFS • ADR BRIEFS

Bleemer is editor of Alternatives. Sutter is a CPRintern. This ADR Briefs item is an expanded versionof an item originally prepared for the “RecentNews” feature at www.cpradr.org, the home page ofthe CPR Institute, Alternatives’ publisher.

VOL. 24 NO. 1 JANUARY 20064 ALTERNATIVES

senior judge-mediators for a minimum ofone judicial education course focusing on ar-eas where the Code of Judicial Conduct orthe Florida Rules for Certified and Court-Appointed Mediators could be violated.

There were other recommendations thatCourt addressed:

Recommendation 2: The committee sug-gested that there should be no limit on thenumber of mediations performed by seniorjudge on active status, and no subject matteror geographic restrictions on mediationsconducted by the senior judges. But it wasthe only recommendation that the Court didnot adopt in its entirety.

The Court rejected the Committee’sview on subject matter and geographic re-strictions, and said that senior judges couldnot mediate cases in the court in which theysit. So, for example, circuit court judges maytake family matters where they are located,but may not mediate civil cases.

Recommendation 3: The courts will col-lect information from senior judges, in con-nection with their senior judge certificationrenewal, on their mediator service.

* * *

In the opinion, the court adopted new judi-cial code canons and changed various rules in

order to implement the changes for each rec-ommendation adoption.

The rule changes’ impact will be on case-by-case basis, rather than any significantpractice change, says Shawn L. Briese, a Day-tona Beach, Fla., circuit court judge who ischairman of the Court committee that wrotethe recommendations. The notice provi-sions, he says, will “strengthen the public’sconfidence in the judicial system,” adding,that they “make everything brighter andclearer as to what needs to be done when

nancial affairs to minimize the risk ofconflict with their judicial duties.

In recommending the changes, both thecommittee and the Court acknowledged thatthe judicial ethics code needs to interact withthe state’s mediator credentialing system,which is established by the state’s Rules forCertified and Court-Appointed Mediators.

The new disclosures work both ways,with senior judges required to discuss pastactions when accepting mediation mattersand when accepting new court cases. Thenew rules, however, don’t apply to retiredjudges who don’t file for senior status allow-ing them to be recalled.

The opinion addressed the committee’srecommendations, focusing most on itsfirst point.

* * *

Recommendation 1: The Court held thatthere should be no absolute prohibitionagainst a senior judge serving as a mediator,but adopted four safeguards recommendedby the committee. Still, the Court, notingthat the committee found only one instanceof judicial impropriety in the decade of sen-ior judge mediations, recommended ethicaland training safeguards to avoid “any appear-ance of or potential for impropriety.”

The safeguards, the Court noted, addressseveral concerns: “(1) the self-determinationof the parties could be compromised when asenior judge serves as a mediator; (2) the sen-ior judge assignment might inappropriatelycreate an advantage in obtaining mediationbusiness for a senior judge or any mediationgroup with whom that senior judge associ-ates; (3) the senior judge could be influencedin his or her judicial duties to favor potentialmediation clients; and (4) the attorneys atmediation would be more deferential towardthe mediator in anticipation of appearing be-fore the mediator subsequently serving in ajudicial capacity.”

The first safeguard that the Courtadopted is a requirement that the seniorjudges get the state’s mediator training. Thecertification requirement places judge-medi-ators within the ethical rules and disciplinary

system established for certified mediators, aswell as the judicial code.

The second safeguard requires the judgesto disclose if they have presided over a caseinvolving any party, attorney, or law firm inthe mediation.

Prior service does not preclude a judgefrom presiding over a mediation. The partiesmust determine whether they have concernsabout mediator impartiality after disclosure.

The Court acknowledged that seniorjudges might not recall every lawyer and casethat has appeared before them over theyears. A disclosure of the possibility that anattorney has appeared before a judge satisfiesthis requirement. The “due diligence re-sponsibility is up to the party after that,”says Sharon Press.

The third safeguard requires that the sen-ior judge disclose if the judge is being used orhas been used as a mediator by any party, at-torney, or law firm involved in a case pend-ing before the senior judge. The committeerecommended, “Absent express consent of allparties, a senior judge should be prohibitedfrom presiding over any case involving anyparty, attorney, or law firm that is utilizing orhas utilized the judge as a mediator withinthe previous three years.” The Court agreed.

The committee believed that a three-yearperiod was “reasonable and sufficient,” ac-

cording to the opinion, to dissipate an ap-pearance of impropriety “resulting from thefact that the judge previously received com-pensation as a mediator from a party. . . .”

“I like that,” says John Upchurch, a for-mer state circuit court judge and name part-ner in the Daytona Beach, Fla., office of Up-church Watson White & Max MediationGroup Inc. “It puts the burden on the firmto research their records.”

The fourth recommendation involves anadditional training requirement, which sends

(continued from previous page)

The wisdom of the new 40-hour mediator certification course requirement ‘is that

judges literally have to be retrained.’


Dispute Resolution placed an announcementabout the guides in the Federal Register onNov. 9, opening a 30-day comment period.

The office was acting on behalf of theFederal Interagency ADR Working Group’ssteering committee and three subcommit-tees. The subcommittees adapted recentworks in their respective areas to create prac-tice guides.

The guides attempt to complement andin some places bridge the gaps between theearlier efforts’ legal analysis, and the practiceof federal government officials with ADR re-sponsibilities.

The guidance doesn’t tackle some big is-sues for government practitioners, like enlist-ing neutrals and sharing results. But theyprovide specific examples in complicated ar-eas that will provide comfort for officials at aloss in trying to apply arcane legal principlesto commonplace disputes.

The guides all have a disclaimer that theyapply to the internal management of the fed-eral executive branch. The confidentialityguide, which is culled from a long history ofADR activity by the working group and oth-ers inside and outside of the government, re-stricts itself to federal government employ-ment disputes.

But the guides—which are available atthe Federal Interagency ADR WorkingGroup’s home page at www.adr.gov—willbe important reading for those doing gov-ernment contract business. The mediatorstandards’ guidance, for example, says atthe outset that “it is expected . . . that non-federal mediators involved in federal medi-ations will agree to adhere to the . . . use ofthis [g]uide, as part of their mediation em-ployment agreements executed for suchfederal mediations.”

Richard C. Walters, who worked on theombuds and mediator standards subcom-mittees, says that the comments he has vol-unteered to collect on behalf of the FederalInteragency ADR Working Group will bepresented to the steering committee andthe subcommittees, each of which hasabout 10 members, for analysis. They willdecide whether to redraft the guidance, andeventually the steering committee will give



there are potential conflicts.”Sharon Press, of the Court’s dispute reso-

lution center, says about the opinion that “itremains to be seen how significant an impactit will have.” But she notes that the opinionrequires senior judges’ diligence because itchanges many rules to implement the com-mittee’s recommendations.

Briese says he doesn’t think that the sen-ior judges will be affected negatively by theexposure to mediation disciplinary rules.“The judges are used to dealing with con-flicts of interest,” says Briese, and will beable to carry that experience over to media-tor work. “I suspect that’s why there haven’tbeen any cases to speak of in the last 10years,” he says, concluding, “This just codi-fies to a large extent what senior judges aredoing as mediators.”

No one contacted for this article expectsa senior judges’ backlash to the training re-quirements. Press says she expects her officewill collaborate with the state’s court admin-istration office to put together the ethicscourse covering the intersection of the judi-cial code and the state mediators’ rules.

Referring to the 40-hour mediator certi-fication course, John Upchurch says that “thewisdom of the requirement is that judges lit-erally have to be retrained.”

Fort Lauderdale, Fla., senior judge Ger-ald Mager says he wasn’t disappointed thatthe committee and the Court ignored hissuggestion to distinguish between seniortrial judges and senior appellate judges inthe rules. Mager, a state appeals court judgein the 1980s, wrote to the committee lastFebruary, three months after it filed the finalreport with the Court, stating that the rec-ommendations are directed to trial judges,but they fail to distinguish that appellatejudges are differently situated. He cited thenature of three-judge appellate panels as re-quiring potentially a different level or formof disclosure.

In retrospect, says Mager, different stan-dards could have produced a “crazy quilt for-mula,” with patchwork application forjudges in different jobs. He said making thedistinction might have caused more paper-work and “a horrendous policing problem,”without enhancing the court’s approach tothe ethics issues.

Overall, the recommendations and theCourt’s opinion, says Mager, who mediatesand accepts recall cases, are a “good-faith ef-fort to address problems . . . and to assist indealing with a perception.”

Still, while most senior judges were as-sessing how they will change their approachto their court and mediation cases, theCourt’s opinion had some immediate effects.Former judge Upchurch, who is not on sen-ior status, says that he might have to pull an

advertisement his firm had ran in the fall,and expected to run again, in a Florida busi-ness newspaper.

“There is a strict prohibition in involvingjudges in any promotion and advertising,” hesays, explaining that his new ad featured a“freshly retiring judge” who had joined thefirm. “I think he has decided not to sit,” saysUpchurch, quickly adding that he wouldconfirm the new hire’s status—and, if neces-sary, revise the copy to exclude the formerjudge in ads to be run after Jan. 1. �

FEDERAL GOVERNMENT’SADR SPECIALISTSRELEASE GUIDANCEIN THREE AREAS

Federal government ADR officials havemoved to solidify conflict resolution prac-tices by issuing user guides for ombuds’ prac-tices, confidentiality issues in workplace dis-putes, and federal employee mediatorstandards.

The U.S. Justice Department’s Office of


Contract mediatorsin federal ADR caseswill be expected toadhere to the newmediator standards

guide.

working group’s federal branch focus. The new practice guide warns ombuds:

• to correlate their office’s “charters”—that is, their sources of authorization—with the laws and rules involving collec-tive bargaining obligations and agree-ments, since many federal ombuds pro-grams are established to specifically dealwith employment concerns. The guideadvises using the accompanying work-ing group’s confidentiality andemployee mediator guides.

• in some cases to reject a standard fromthe 2004 ABA ombuds report that barsombuds from most collective bargainingagreement work, where the ombud’scharter provides for specific authority todeal with employment-related matters.

• to consider conflicts between 1996 ADRAct confidentiality restrictions andombuds obligations to report fraud,abuse, and systemic problems when theyare uncovered. The guide says “it isessential that federal Ombuds haveaccess to independent or properly insu-lated legal counsel, in order to obtaincompetent advice whenever such con-flicts arise,” and

• to provide notice to federal agencies inaccordance with ombuds’ duties to takecorrective actions without compromis-ing an employee’s anonymity.

* * *

“A Guide for Federal Employee Mediators”similarly reprints the 2005 Model Standardsof Conduct for Mediators,” then adds itali-cized “federal guidance.” The 13-page reportprovides advice for practitioners on seven ofthe model’s nine standards. Highlights fromthe subcommittee’s advice include:

• Mediators should withdraw if parties in-sist on proceeding with an agreementthat in the mediator’s “informed judg-ment . . . will contravene federal law orregulation. . . .”

• Support for evaluation where the evalua-tion “does not interfere with the media-tor’s impartiality or the principle of self-determination of the parties.”

• Designation of the 1996 ADR Act as

final approval to the guides. But the end products will not constitute

official government policy, since the steeringcommittee isn’t a governing body. The Fed-eral Interagency ADR Working Group wasformed at President Clinton’s direction in1998, and organized by the Justice Depart-ment. It consists of the experts in executivebranch alternative dispute resolution offices,but it cannot make rules. Throughout theguides are suggestions that government dis-pute resolvers adapt the guidance to theiragency’s efforts.

Since it was formed, the working grouphas encouraged the spread of conflict pre-vention, early resolution efforts, and media-tion. Walters explains that the current work’sdirection coalesced last year around the ef-forts of others, using products in whichsome working group members had partici-pated, as a basis for practice guides. “Ratherthan reinventing the wheel,” says Walters, anadministrative judge at the U.S. Depart-ment of Veterans Affairs Board of ContractAppeals in Washington, “we would takewhat they had, and supplement it in theform of federal guidance.”

The starting point, says Walters, was thefederal employee mediators’ guide. Theguide recites the new Model Standards ofConduct for Mediators, which had been de-bated for several years, and which wereadopted in August and September by theAmerican Arbitration Association, the Amer-ican Bar Association, and the Association forConflict Resolution. [For details, see “Modelmediator Standards Are Revised, But Com-mercial Applications Are Questioned,” 23Alternatives 154 (October 2005).]

“A Guide for Federal Employee Om-buds,” was developed by the working groupsteering committee with the Coalition ofFederal Ombudsmen, based on the Ameri-can Bar Association’s February 2004, “Stan-dards for the Establishment and Operationof Ombuds Offices.”

The most complicated of the threeguides, “Protecting the Confidentiality ofDispute Resolution Proceedings: A Guidefor Federal Workplace ADR Program Ad-ministrators,” tells federal ADR officials that

it needs to be used in conjunction with thetext of the Administrative Dispute Resolu-

tion Act of 1996, at 5 U.S.C. § 574, and the2000 “Report on the Reasonable Expecta-tions of Confidentiality Under the Adminis-trative Dispute Resolution Act of 1996,”which also is posted at www.adr.gov.

The confidentiality guide—which at 68pages is about five times as long as each of theother guides—also refers to an influential re-cent report, the “Guide to ConfidentialityUnder the Federal Administrative DisputeResolution Act,” which was published inearly 2005 by an ad hoc ABA group. For de-tails, see “Follow-up: Federal GovernmentADR Confidentiality Guidelines Are Re-leased,” 23 Alternatives 88 (May 2005).

People involved in the work say that theconfidentiality guidance is supposed to act asa complement to the black letter law-ori-ented discussion of the ABA guide.

The efforts are supposed to provide “con-crete illustrative examples of guideposts forwhen you are actually involved in adminis-tering, or during a problem,” says Linda Cin-ciotta, director of the Justice Department’sdispute resolution office. The guides “movethings from a theoretical plane to a muchmore practical level so that people like pro-gram administrators can seek and find someconsidered best practices.”

* * *

Judge Walters explains that the ombudsguide reprints the 2004 ABA ombuds stan-dards, which also focused on governmentalombuds, but which was broader than the



New governmentADR-related guides

move the theory ‘to a much more practical level.’



General to prevent, or at least minimize,any potential conflicts.”

* * *

No comments had been received at Alterna-tives’ press time, but with the short commentperiod, Richard Walters says he expectedsome before the Dec. 9 deadline. He says latecomments will be considered if possible.Contacts and comment requirements areavailable at ww.adr.gov.

Linda Cinciotta says that the Justice De-partment’s dispute resolution office had in-put into the guides’ construction, and keptthe department informed of developments.Since the office will be involved in dealingwith the comments in the working group,she says the Justice Department won’t be fil-ing comments on the guides.

But ombuds subcommittee memberHoward Gadlin, who is ombudsman at theNational Institutes of Health in Bethesda,Md., says he has concerns about the om-buds draft, and will submit comments on atleast three points. He says he is most per-turbed about the guidance provided in thenotice section, which says that where anemployee wants to remain anonymous, theombuds should provide notice of the matterto the federal entity “acting as a conduit forthe employee,” to the extent possible in ananonymous report.

The “sentence is ridiculous,” Gadlinsays. “Nothing works that way. . . . It does-n’t actually capture the way in which anombuds can facilitate people coming for-ward, and facilitate notice being given to anorganization.”

Gadlin had not prepared the commentshe said he would file when Alternatives wasgoing to press; he says he wasn’t sure whetherhe would propose new language for the stan-dard, or ask that the sentence be struck.

Gadlin says he also planned to commenton the ombuds guide section “Indepen-dence, Impartiality, and Confidentiality,”which states that to ensure independence,the ombuds should “have direct access to thehighest agency official or his designee.” Hesays the designee could represent a conflict of

“applicable law” for confidentialityissues—but also warning that protec-tions aren’t absolute, and that mediatorsshould consult their agency’s guidance;the 2000 confidentiality report; theworking group’s Web site, and its simul-taneously released confidentiality guide.It also notes that additional federal ADRconfidentiality guidance is being final-ized by the ABA sections of dispute reso-lution, administrative law, and publiccontract law.

• Warning that federal employee media-tors should only accept federal media-tion assignments under the auspices ofagency programs, such as the multia-gency shared neutrals’ program, “so as toavert the possibility of being chargedwith abuse of official time or otherwiseputting at risk their rights and benefits asfederal employees.”

* * *

The dispute resolution confidentiality re-port, which is limited to advice on federalworkplace dispute mediation, contains sixchapters covering in detail conduct leadingup to, during, and after dispute resolutionproceedings. It also provides hypotheticalsituations, question-and-answer advice,and content listings for agency confiden-tiality agreements; record keeping; pro-gram and process evaluation; dealing withdisclosure requests, and addressing non-party participants.

Walters says that some federal workplacemediation program administrators had toldthe working group that an early draft of thestandards wasn’t user friendly. The new guid-ance adopted the Q-and-A format with itshypothetical situations, he notes, “knockingout the legalese and putting it in more plainlanguage.” The confidentiality guide:

• asks federal agency program administra-tors to “ensure that individuals seekingADR assistance understand the rolesand obligations of ADR program staffmembers who serve as neutrals” by con-sidering developing a model statementon the dispute resolution office’s neu-

trality; posting advisories on the officewalls about confidentiality; developingand distributing announcements,brochures, and materials, and creating aWeb site with an overview of the pro-gram’s confidentiality practices.

• allows the parties to agree to greater orlesser confidentiality than provided inthe ADR contract, with an accompany-ing warning that doing so could createenforceability problems. The subjectprovoked discussions in the construc-tion of the ABA ad hoc group’s confi-dentiality report. See Alternatives, May2005, supra.

• notes that, as a best practice, programadministrators should tell parties thatagreements allowing the neutral to dis-close dispute resolution communicationsshould be in writing, though the ADRAct doesn’t require a writing or the neu-tral’s agreement. The purpose of the writ-ing is, in part, to allow a neutral whodoesn’t agree to withdraw.

• admits that there is tension for ADRprogram administrators between their1996 ADR Act confidentiality responsi-bilities, and the conflicting obligations ofagency inspector generals to investigateoperations under the inspector generallaws at 5 U.S.C. App. §§ 2-3. “There isno easy resolution to this conflict,” theguidance states, recommending thatadministrators “should educate them-selves about the issue and make everyattempt to establish good working rela-tionships with their agency Inspector

Federal ADR ombudsneed ‘a thorough

discussion’ onreporting fraud

and abuse.




interest if it is, for example, a human re-sources official, or the head of the EEO of-fice, since so much ombuds work is in theworkplace and employment area.

Gadlin also takes issue with the obliga-tions under the guidance to report fraudand abuse. “A thorough discussion on thatis needed,” he says. The guidance, headds, makes it sound as if the ombuds areobligated to report abuse when they hearit alleged.

Rather, he says, there are reporting trig-gers that must be explained in the context ofombuds’ own ethics rules. Gadlin adds that adiscussion of responsibilities with regard toagency inspector generals should be in-cluded, similar to the confidentiality report,which he says should be cross referenced.

D. Leah Meltzer, deputy dispute resolu-tion specialist at the U.S. Securities and Ex-change Commission in Washington, who isone of the working group’s point persons onthe confidentiality guide, says she expectsthat the working group will organize trainingsessions, and might present programs at na-tional conferences to spread the word aboutthe guidance once it is final. �

FOLLOWUP: COMMENT PERIODIS REOPENED FOR CALIFORNIAARBITRATOR ETHICS STANDARDS

As Alternatives went to press last month, theCalifornia Judicial Council announced thatit intends to update its recent arbitratorethics standards to account for the federaland state court rulings.

The council, which is the Californiacourt’s constitutionally created 27-memberpolicymaking body, proposes to correlate itsEthics Standards for Neutral Arbitrators inContractual Arbitration with court decisionsexempting U.S. Securities and ExchangeCommission-regulated entities from thestandards’ application.

The New York Stock Exchange and theNASD objected to the heightened disclo-sure, and won cases in state and federalcourt that said the standards usurped theSEC’s jurisdiction in overseeing the mar-kets’ operations.

The council also invited comments forchanges to any of the other standards in lightof practice since the 2003 adoption.

The form for comments, and thespecifics of the solicitation, can be found atwww.courtinfo.ca.gov/invitationstocom-ment/documents/sp05-10.pdf. The com-ment period closes on Jan. 20.

The original time periods for commentsin 2002, when the standards were revised,were short. The council, when the standardstook effect in January 2003, announced itwould revisit the standards.

The standards have been controversial,requiring occasionally voluminous disclo-sures, and automatic arbitrator withdrawalupon a party’s request. See “California Ap-peals Panel Backs Arbitrator Ethics Stan-

dards—and Overturns Ovitz’s Big Award,”23 Alternatives 189 (December 2005) (de-tailing the overturning of an arbitrationaward because of an arbitrator’s failure to fol-low the disclosure rules).

The Nov. 9 request for commentspoints out that the California SupremeCourt in Jevne v. Superior Court 35Cal.4th 935 (2005), and the Ninth i. Cir-cuit Court of Appeals, which is the federalcircuit covering California, in Credit Su-isse First Boston Corp. v. Grunwald, 400F.3d 119 (9th Cir. 2005), held that the Se-curities Exchange Act preempts applica-tion of the California ethics standards toNASD arbitrators.

The council states that because thecourts concluded that the California stan-dards relating to arbitrator disqualificationare in conflict with SEC-approved rules, itwas proposing a new Standard 3(b)(2)(I).The rule will state that the standards don’tapply to “[A]n arbitration proceeding gov-erned by rules adopted by a securities self-

regulatory organization and approved bythe United States Securities and ExchangeCommission under federal law.”

Dispute resolution professionals famil-iar with the standards and the Jevne andCredit Suisse First Boston decisions, as wellas earlier SEC actions exempting the mar-kets, say that the proposed standard is prac-tically a no-brainer.

But the opening to the rest of the stan-dards has been noted; people and organiza-tions are staking out their positions, andcomments are being prepared. For many, itwill be hard to resist taking on broad themesinstead of focusing on smaller potentialchanges in the hefty standards, because of thecontroversy the ethics rules have sparked.

Paul Dubow, a San Francisco neutral

in private practice, says “it’s not necessaryto include all types of neutral arbitrationsin the ethical standards.” Dubow, who ischairman of the arbitration legislationsubcommittee of the La Jolla, Calif.-based California Dispute ResolutionCouncil, a nonprofit provider profession-als group, says he will urge the group toask the state to limit the standards to con-sumer cases. “If two businesses arbitrate,”he says, “they are more sophisticated thanconsumers, [and] they can negotiate theterms.”

But Dubow’s colleague, James R. Madi-son, a former CDRC president and chair-man of group’s public policy committee,says that banning the standards except forconsumer cases won’t fly. He says that “if wehad our druthers,” a ban beyond consumercases would be preferred, but the case law,and state and federal statutory history, aswell as ethics codes, show that disclosure isrequired anyway, and support arbitrationacross the board.

For many, the reopening of a comment periodon California's arbitrator ethics standards will

be a chance to revisit some of the rules’sweeping disclosure provisions.




“The only thing that bugs me at the pres-ent time,” says Madison, a Menlo Park,Calif., neutral, “is the supplemental disclo-sures,” citing the Ovitz case, where the arbi-trator’s continuing disclosure, after an award

but before a written opinion, was ineffective,and the award was overturned. Ovitz v.Schulman, B179978 (Cal. App. 2d. Oct. 26,2005) (available at www.courtinfo.ca.gov/opinions/documents/B179978.PDF); seeAlternatives, December 2005.

Madison says that a correction to thetiming of such subsequent disclosures maybe better directed to the California Legis-lature—perhaps when it takes up the Re-vised Uniform Arbitration Act, which cur-rently is in front of the state’s Law RevisionCommission.

Current CDRC president John Black-man is sympathetic to the arguments aboutthe extent of disclosures. The ethics stan-dards “are really long,” he says. “It’s dauntingfor people to read these things. There are somany traps or ambiguities that crop up whenyou do or say things.”

Blackman also says that occasional arbi-trators, who he views as essential to the ar-bitration scene because of their subjectmatter expertise, are looking at the stan-dards, seeing liability, and saying there istoo much risk. “We’re losing quality arbi-trators,” says Blackman, adding, “These arepeople who would be fair to the end of theearth and would disclose everything theycould possibly think of.”

For now, Blackman, a civil litigator andneutral at San Mateo, Calif.’s Farbstein &Blackman, says the CDRC is collecting itsinternal comments, and will decide whatcomments it will file. Paul Dubow says hewon’t comment on his own, and instead willdefer to the CDRC.

At press time, about three weeks after theJudicial Council’s reopening of the commentperiod, some of the big ADR providers weremulling their course of action. The requestfor comments named seven provider organi-

zations to which it was sending the release forcomments, including the CDRC, the Amer-ican Arbitration Association, and the CPRInstitute, which publishes this newsletterwith Jossey-Bass, a unit of John Wiley &Sons, Inc.

Eric Tuchmann, the AAA’s general coun-sel in New York, says that officials hadplanned to meet near the end of Novemberand decide what steps to take.

John Welsh, vice president and generalcounsel of JAMS, of Irving, Calif., whichalso was named in the request for comments,says his firm also will be looking at whetherit will file.

Welsh says that the key issue will be thedisclosures. He says a recent JAMS case in-volved many firms, and the broad disclo-sures for all the participants weren’t neces-sary for the individual arbitrations used tosettle the case. Still, all the law firms in thecase needed to disclose their relationships,which “wasn’t fair or relevant for anyonetrying to determine the closeness of the tiesthey have with one firm.”

* * *

According to CPR President Thomas J.Stipanowich, who also is publisher of Al-ternatives, staff at the CPR Institutewould be meeting in December, after Al-ternatives went to press, to determinewhether it would file comments. �

DOI 10.1002/alt.20110

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‘We’re losing quality arbitrators. These arepeople who would be fair to the end of theearth and would disclose everything they

could possibly think of.’

ADR BRIEFS • ADR BRIEFS ‘I NEEDINFORMATION

ON…’You need a quick answerabout a consumer ADR

policy question. Here’s how IICPR’s

Alternatives can help.• • •

Go to your bookshelf andcheck “Consumer ADR” in the

Alternatives index appearingevery February.

• • •Log onto the IICPR

Web site, www.cpradr.org.Click on PUBLICATIONS, then ALTERNATIVES, then click onINDEX TO VOLUME 14 (1996),INDEX TO VOLUME 15 (1997), INDEX TO VOLUME 16 (1998),INDEX TO VOLUME 17 (1999),INDEX TO VOLUME 18 (2000),INDEX TO VOLUME 19 (2001),INDEX TO VOLUME 20 (2002),INDEX TO VOLUME 21 (2003),

ORINDEX TO VOLUME 22 (2004).

You will find entries for Consumer ADR articles.

• • •Go to www.lexis.com. From thesource directory choose “Area of

Law by Topic,” then choose“Alternative Dispute

Resolution,” and then go to“CPR Institute for DisputeResolution Publications.”

Search “Consumer ADR” forall Alternatives references datingback to 1993 or for the specific

titles you found in an index. • • •

Go to www.westlaw.com.Enter “ALTHCL” at theWestlaw directory screen.

Search “Consumer ADR” forall Alternatives references datingback to 1991 or for the specific

titles you found in an index.

Documents

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