PrintByline: Guy Loranger
A proposed ethics rule change would exempt lawyers who are servingas certified mediators from the duty to report another lawyer's unethical behavior if it arises during a confidential mediation.
Supporters of the amendment to ethics Rule 8.3, including the state's Dispute Resolution Commission, say it would make the mediation process more effective by ensuring confidentiality.
"We want mediators to encourage lawyers to not violate the [Rules of Professional Conduct], but we also believe that confidentiality inthe relationship is important in the mediation process," said Andy Little, a Raleigh-based lawyer-mediator and former chair of the Dispute Resolution Commission.
But others, including the N.C. Bar Association's family law section, say the change could actually lead to less effective mediation.
"A case resolved in mediation where the attorney acted unethicallymay not be a fair resolution to a party," said Goldsboro lawyer Shelby Duffy Benton, the family law section's chair.
At its Oct. 22 meeting, the State Bar ethics committee voted to publish the proposed rule change in the next State Bar Journal.
Based on comments that the proposal generates, the committee couldrecommend that the State Bar Council adopt the change at its next quarterly meeting in January.
Tension in the rules
According to a letter submitted to the State Bar by the Dispute Resolution Commission's chair, Superior Court Judge W. David Lee, a "tension" exists between the reporting requirements of current Rule 8.3 and the confidentiality required of mediators.
Mediators, unlike other lawyers, find themselves subject to two different sets of rules: The Rules of Professional Conduct for lawyers,adopted by the Supreme Court, and the Standards of Professional Conduct for mediators, also adopted by the Supreme Court.
Under current ethics Rule 8.3, any lawyer who knows of another lawyer's violation of the Rules of Professional Conduct, which "raises asubstantial question of that lawyer's honesty, trustworthiness or fitness as a lawyer," must report it to the State Bar.
However, under the mediators' code of conduct, a mediator is required to "maintain the confidentiality of all information obtained within the mediation process."
"Although I believe it is fair to say that the issue does not arise frequently, it poses a most serious and confounding circumstance for the lawyer-mediator on those occasions when it arises," Lee wrote.
"Further, the DRC's oversight of a lawyer-mediator and the dilemmahe/she faces, substantially differs from that required of the non-lawyer-mediator, often putting the DRC in a challenging position."
According to Lee's letter, the State Bar asked the DRC to comment on the application of Rule 8.3 to lawyer-mediators three years ago.
Since that time, there's been an air of nervousness among lawyer-mediators, Little said.
"During the three years that this has been under discussion, and the mediation community has become aware of the issue, we've seen an increase in people calling for advice about whether they had a duty toreport in situations where it was pretty clear that they had no dutyto report," Little told North Carolina Lawyers Weekly.
"We're concerned about increased hypersensitivity among mediators,where their work would become more investigatory than facilitative,"he said. "And when a mediator starts becoming so suspicious that nowhe's an investigator, the duty of neutrality and impartiality beginsto evaporate."
Application
According to Benton, the current reporting requirement of Rule 8.3actually contributes to effective mediation.
For example, in an equitable distribution mediation, a situation might arise where a mediator learns that one party has failed to disclose an asset that should be divided. The party and attorney tell the mediator that this information is confidential and not to be disclosed.
Pursuant to current Rule 8.3, the mediator could tell the attorneythat he would be violating the ethics rules and inform him that the asset must be disclosed, or else he would face a gross misconduct issue.
"Usually, once this is pointed out, the attorney and client quickly disclose, and the mediation moves forward," Benton said.
However, if Rule 8.3 were to change, the case could settle withoutthe other party ever knowing of the asset, she said.
"We came up with other examples" of unethical behavior arising in mediation when the family law section met in September, Benton said, "but the one above had actually happened to at least three family lawmediators in the room."
"We do not think this happens a lot with attorneys in mediation, but we do not see how this rule change helps mediations in family law at all," she said.
However, the reporting requirement actually makes it harder for a mediator to deter misconduct, according to Little.
Without a reporting requirement, a lawyer-mediator could discuss the unethical behavior with the other lawyer in confidence and work toward compliance with the ethics rules, he said.
"We think the mediator is more likely to take that kind of rehabilitative posture if there is not a concern that in talking to the lawyer, they may have to report the lawyer," he said.
Little compared the mediator/client relationship to that of attorney/client. "We believe the mediator, unlike any other lawyer, is in a confidential relationship [with the other lawyer] when they are mediators. And that confidentiality needs to be preserved to make that relationship work," he said.
Other State Bar ethics news
In a busy session, several other matters were acted upon by the ethics committee and State Bar Council during the annual meeting.
The Council, based on the ethics committee's recommendation, approved three new formal ethics opinions:
* 2008 FEO 14: It is not an ethical violation when a lawyer fails to attribute or obtain consent when incorporating into his own brief,contract or pleading the work of another lawyer;
* 2009 FEO 9: "Reasonable procedures" for a computer-based conflicts-checking system; and
* 2009 FEO 10: A lawyer must provide appropriate supervision to a non-lawyer appearing pursuant to G.S. Sect. 96-17(b) on behalf of a claimaint or an employer in an unemployment hearing.
Two proposed ethics opinions were revised and re-issued for publication:
* Proposed 2008 FEO 11: A lawyer may serve as the trustee in a foreclosure proceeding while simultaneously representing the beneficiaryof the deed of trust on unrelated matters, and the other lawyers in the firm may also continue to represent the beneficiary on unrelated matters; and
* Proposed 2009 FEO 3: A lawyer has a professional obligation not to encourage or allow a non-lawyer employee to disclose confidences of a previous employer's clients for the purposes of solicitation.
In addition, seven proposed ethics opinions were approved for publication:
* Proposed 2009 FEO 11: A lawyer may not undertake the representation of a debtor in a Chapter 13 bankruptcy if the lender is the lawyer's current client;
* Proposed 2009 FEO 12: A lawyer may prepare an affidavit and confession of judgment for an unrepresented adverse party provided the lawyer explains who he represents and does not give the unrepresented party legal advice. However, a lawyer may not prepare waiver of exemptions for the party;
* Proposed 2009 FEO 13: A lawyer may provide limited legal services when working with a settlement agent on a residential real estate transaction provided the lawyer is not assisting the settlement agent to engage in the unauthorized practice of law, and the lawyer avoids conflicts of interest;
* Proposed 2009 FEO 14: A lawyer may refer a client to the title insurance agency in which the lawyer's spouse has an ownership interest if he determines his professional judgment was not impaired by the spouse's financial interests, and the client gives informed consent;
* Proposed 2009 FEO 15: A prosecutor must dismiss a DWI charge when the prosecutor fails to appeal a court order suppressing evidence from the traffic stop, which would eliminate the evidence necessary toprove the charge;
* Proposed 2009 FEO 16: A law firm must include a disclaimer and make known specified information about any trial or other professionalsuccess referenced on a Web site; and
* Proposed 2009 FEO 17: Whether a lawyer rendering a title opinionto a title insurer should tack an owner's policy of title insurance or a mortgagee's (lender's) policy is a question of standard of care and outside the purview of the ethics committee.
Finally, two proposed changes to the Rules of Professional Conductwere withdrawn:
* Proposed Amendment to Rule 1.8(e): The change would have alloweda lawyer representing an indigent client to provide financial assistance for essential needs, such as food, rent and utilities, provided there was no obligation to repay, and there was no representation to the client prior to representation that such financial assistance would be provided; and
* Proposed Amendment to Rule 3.8(g): The change would have required any prosecutor who knew of "new, credible and material post-conviction evidence" that a reasonable person in the prosecutor's position would conclude casted "substantial doubt" on the guilt of a convicted defendant to disclose the evidence to a court or other authority, theN.C. Innocence Inquiry Commission, the public defender or the defendant.
