Increasingly, attorneys and law firms are searching for new ways to generate income. Seasoned attorneys (and, by affiliation, their law firms) seeking diversification often start a mediation practice. Of course, not every litigator makes a good mediator. Years of experience settling and trying cases, however, can create a solid foundation for becoming an effective mediator.

There are several sources of ethical and legal guidance for Colorado attorneys who conduct mediation. The Colorado Model Standards of Conduct for Mediators (Model Standards) provide comprehensive ethical guidance for attorney–mediators. Compliance with the Model Standards is voluntary under Colorado law, but attorney–mediators would be wise to pay close attention to them. Due to the comprehensive nature of the Model Standards and the lack of clear guidance on important aspects of mediation from other sources of Colorado law, references to the Model Standards will be made throughout this article.

Attorney–Mediators May Face Nontraditional Conflicts

Potential conflicts arise in attorney–mediator contexts that may not be anticipated by the attorney or the attorney’s law firm. Consider, for example, a situation where one of the participants in a mediation is an insured of an insurer client of the law firm where the attorney–mediator is employed. The insurer client likely would want to know that an attorney with the firm is serving in a capacity to facilitate a settlement, but not on its behalf. Additionally, the insured may want to know that the mediator’s firm represents the insurer in other capacities.

Unfortunately, in many circumstances, law firms overlook these potential issues by failing to run a conflicts check on the participants in a mediation before the attorney–mediator conducts the mediation. Most of the time, there is no problem, but unless the firm runs a conflicts check, the firm may be unaware of a conflicts issue until one of the parties to the mediation becomes unhappy.

For example, a settling party with buyer’s remorse might over time develop the belief that the mediator pushed it too hard and, as a result, the party accepted too little when it agreed to settle the case. The party, upon learning about the representation of the opposing party by the attorney–mediator or his or her firm, may blame the mediator and accuse the attorney–mediator or the firm of violating the conflict of interest rules or of colluding with the other party to manipulate an unfair settlement amount. Further, a party whose case never settled may develop a theory that the mediator–attorney did not do enough to convince the other party to decrease its settlement demand to an amount low enough for the case to settle. This issue could become especially problematic if the party learns that an undisclosed relationship existed between the attorney–mediator’s law firm and the opposing party.

The central idea of mediation is that it offers parties the opportunity to bring their dispute before an impartial mediator who aids them in resolving their dispute outside the courtroom. The examples above highlight common matters that could raise conflict of interest issues, as well as concerns about an attorney–mediator’s impartiality. The absence of a conflict of interest is not always sufficient to eliminate the appearance of partiality, but conflicts checks are a good starting point for protection of the attorney–mediator.

The Importance of Conflicts Checks in Mediation

Attorney–mediators often ask whether they must do a conflicts check at all, because a mediation does not involve the rendition of legal services. The short answer is yes. An attorney’s ethical obligations do not end when the attorney undertakes non-legal services, especially services provided by a mediator or the mediator’s law firm.

Attorney–mediators should identify all participants in a mediation and any interested parties. These names should be compared with the mediator’s law firm’s client matter list to see if any of the participants are clients or adverse parties. If any such relationships are identified, the attorney–mediator should either decline the mediation or disclose the potential conflict and follow the rules for consent (or waiver of any conflict). This includes written full disclosure and written consent.¹

The Additional Burden of Impartiality

Impartiality in a mediator is critical. Under the Model Standards, a mediator has a duty to conduct a mediation in “an impartial manner . . . that gives the appearance of impartiality.”² To that end, the Model Standards recommend that a mediator “advise all parties of any prior or existing relationships or other circumstances [that may give rise to] the appearance of . . . possible bias, prejudice, or partiality.”³

Further, the Model Standards state that a mediator should not accept or give any “gift, favor, loan, or any other item of value” from or to a party to the mediation.⁴ If the mediator develops any doubts about her or his ability to “conduct the mediation in an impartial manner,” the Model Standards recommend that the mediator withdraw from the mediation.⁵

Implementing Effective Checks for Conflicts and Partiality

The most difficult question for a firm seeking to run a conflicts check on mediation participants is how clients may be listed in the firm’s conflicts database. Thus, after running a conflicts check, the attorney–mediator should confirm with the participants that they are not clients of the attorney–mediator or his or her affiliated law firm. This is best accomplished through a form signed by all of the participants at the mediation. The form could say something to this effect: “Each participant understands and agrees that no attorney–client relationship exists between the mediator and any participant based on this mediation.”

Additional Ethics Rules for Colorado Attorney–Mediators

The Colorado Rules of Professional Conduct (Colorado Rules or Colo. RPC) provide further guidance for attorney–mediators. For example, Colo. RPC 2.4 permits an attorney to serve as a “third-party neutral,” but requires the attorney to inform unrepresented parties that the attorney is serving in a capacity as a mediator and not representing either party.⁶ Specifically, the rule states that

[w]hen the lawyer knows or reasonably should know that a party does not understand the lawyer’s role in the matter, the lawyer shall explain the difference between the lawyer’s role as a third-party neutral and the lawyer’s role as one who represents clients.⁷

The Colorado Dispute Resolution Act, CRS §§ 13-22-301 through -313, also provides ethical guidance to attorney–mediators. Under CRS § 13-22-307(a), a lawyer acting as a mediator has a duty to keep the confidences of both parties to the mediation, with only a few limited exceptions. This duty, however, does not extend to evidence that is otherwise discoverable.⁸

The comments to the Colorado Rules provide ethics guidance regarding mediation procedures relating to fee matters. Comment 9 to Colo. RPC 1.5 states that

[i]f a procedure has been established for resolution of fee disputes [through a mediation process] . . . established by the bar, the lawyer must comply with the procedure when it is mandatory, and, even when it is voluntary, the lawyer should conscientiously consider submitting to it.

Other rules provide specific mediation-related information for judges⁹ and bankruptcy attorneys.¹⁰

Finally, in 2013 and 2014, the Advisory Committee of the Colorado Office of Dispute Resolution (ODR) published draft proposals to establish training standards for mediators who accept court-appointed cases.¹¹ The proposals would require court-referred mediators to attend a forty-hour mediation training program approved by ODR, submit to background and licensure checks, and participate in ongoing training to be listed on a “Credentialed Mediator Roster” published by the ODR. The 2013 proposal would apply to all mediators, while the 2014 version would apply only to mediators accepting domestic relations cases.

Conclusion

Practicing attorneys often make good mediators and can supplement their practice with this important additional service. To mediate well, receive the appropriate training.¹² To do it safely, read and follow the ethics rules and examine any potential appearance of impartiality. It is critical for attorney–mediators to be vigilant about identifying and resolving anything that looks like a conflict or that could be viewed as partiality toward one party to a mediation.

Notes

1.   For more on this topic, see Evans et al., “Screen Clients First—Avoid Problems Later,” 43 The Colorado Lawyer 81 (Dec. 2014).

2.   Model Standard II.B.

3.   Model Standard II.A.

4.   Model Standard II.D.

5.   Model Standard II.C.

6.   Colo. RPC 2.4(a) and (b).

7.   Colo. RPC 2.4(b).

8.   CRS § 13-22-307(4).

9.   See, e.g., Rule 3.9 of the Colorado Code of Judicial Conduct.

10.  See, e.g., Bankr. D. Colo. L.B.R. 9019-2.

11.  Draft Policy Establishing Standards for Mediators Accepting Court-Referred Cases Pursuant to CRS § 13-22-311 (Oct. 2013); Draft Policy Establishing Standards for Mediators Accepting Court-Referred Domestic Relations Cases Pursuant to CRS § 13-22-311 (Oct. 2014).

12.  Visit mediate.com/calendar for a schedule of mediation CLEs nationwide, including several in Colorado.