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136 N.J.L.J. 1298
April 4, 1994
3 N.J.L. 650
April 4, 1994
ADVISORY COMMITTEE ON PROFESSIONAL ETHICS
COMMITTEE ON ATTORNEY ADVERTISING
Appointed by the New Jersey Supreme Court
JOINT OPINION
Opinion 676 - Advisory Committee on Professional Ethics
Opinion 18 - Committee on Attorney Advertising
Alternative Dispute Resolution (Modifies Opinion 657)
This opinion arises from the Committee on Attorney
Advertising's consideration of a grievance concerning the
advertisements of five attorneys who are are engaging in
alternative dispute resolution (hereinafter "ADR") as arbitrators
or mediators. The grievance alleges that these attorneys are in
violation of Opinion 657, 1 N.J.L. 129 (February 17, 1992), 130
N.J.L.J. 656 (February 24, 1992), in that they are practicing law
and engaging in ADR-related activities in the same location,
jointly advertising or marketing the two, and making no attempt to
avoid any other demonstration of a relationship between them.
After careful consideration of the grievance, the
advertisements which appeared in an "Alternative Dispute Resolution
Directory" in the New Jersey Law Journal on May 17, 1993, and
Opinion 657, the Committee raised the issue of whether alternative
dispute resolution is ancillary to or part and parcel of the
practice of law. Needless to say, the answer to this question
would affect not only the Committee's disposition of the grievance,
but also the conduct of an ever-growing segment of the Bar in this
State. Consequently, the Committee enlisted the assistance of not
only the respondents, but also other attorneys and entities with an
interest in this matter. Given the number and nature of the
responses to its request for assistance, the Committee concluded
that it would be better to treat the grievance as an inquiry and
issue an advisory opinion. Since the opinion would require
interpretation of Opinion 657 and possibly affect its scope, the
Committee also enlisted the assistance of the Advisory Committee on
Professional Ethics which joins in its issuance.
Alternative Dispute Resolution and Complimentary Dispute
Resolution have apparently swept the country. Given the congestion
and resultant backlogs of the courts, and the expense of the more
traditional adversarial process, state and federal courts have
embraced ADR and CDR as providing faster and less expensive
resolution of disputes.
In New Jersey, our Supreme Court has amended the Rules
Governing the Courts of the State of New Jersey to include R. 1:40
- "Complimentary Dispute Resolution Programs."See footnote 1
1
In adopting this
rule, which became effective September 1, 1992, the Court
implemented the Report of the Supreme Court Committee on
Complimentary Dispute Resolution, 130 N.J.L.J. 578, 1 N.J.L. 170
(1992), expressing the following purpose and goals:
Complimentary Dispute Resolution Programs are an integral
part of the Superior Court and Municipal Courts. They
are intended to enhance the quality and performance of
the judicial process. Lawyers should become familiar
with available CDR programs and inform their clients of
them. R. 1:40-1.
Among other things, the rule requires screening of all custody and
visitation matters for referral to mediation, R. 1:40-5; allows for
mediation of small claims and, in the discretion of the Assignment
Judge, landlord-tenant disputes, R. 1:40-6; and calls for mandatory
mediation of certain municipal court matters, R. 1:40-7. Of
particular relevance to this opinion is R. 1:40-9 which, subject to
the approval of the Assignment Judge, permits referral of matters
to non-court administered dispute resolution programs (ADR).
The emergence of ADR has presented attorneys with new and
varied ways in which to serve their clients. No longer are
attorneys limited to the traditional role of advocate in civil
litigation. They may now represent their clients in ADR
proceedings, assist their clients in establishing dispute
resolution programs and negotiate contracts requiring ADR. Not
surprisingly, they are in ever increasing numbers serving as
arbitrators or mediators in ADR programs.
Many lawyers are "natural" arbitrators. Arbitration, which in
many cases closely resembles litigation, usually takes place in an
adversarial setting, with the parties represented by counsel and
the arbitrator(s) rendering a final and binding adjudication.
Attorneys, accustomed as they are to appearing before judges,
presenting evidence and engaging in oral and written advocacy in an
adjudicative forum, come to the arbitrator's task enthusiastically
or, as one commentator described it, "like the proverbial duck
taking to water." Unquestionably, their educational training and
experience make them well-suited if not uniquely qualified to serve
as arbitrators.
Similarly, with training and experience beyond that necessary
for and obtained through traditional lawyering, many attorneys are
able to provide excellent mediation services. Unlike arbitration,
which in many cases is contractually agreed upon before a dispute
arises, mediation usually arises after the fact and is a voluntary
process. In mediation, the parties in dispute, with or without
their attorneys, and without prejudice to their rights to proceed
with arbitration or litigation if the matter does not settle, meet
with a neutral third party in a good-faith effort to achieve a far
more economical, prompt and mutually advantageous resolution of all
or part of their dispute. Given their experience weighing the
merits of a case and exploring the prospects for settlement,
attorneys possess qualifications that lend themselves to service as
mediators.
Attorneys are also conversant with and sensitive to the
ethical standards attendant upon service as a mediator or
arbitrator. For example, they may not serve as mediator or
arbitrator in any case in which they have a conflict of interest.
Nor may they participate in ADR as mediator or arbitrator and
subsequently represent either of the parties should the mediation
not result in a settlement. R. 1:40-4(b). See also Opinion 521,
112 N.J.L.J. 394 (1983) (attorney may not participate in private
matrimonial mediation service and subsequently represent either
spouse in divorce action).
Third party neutrals are also under an obligation not to
disclose any confidential information obtained during mediation
unless they reasonably believe it is necessary to prevent a
participant from committing a criminal or illegal act likely to
result in death or serious bodily harm. R. 1:40-4(b). See Canon
5D(7), Code of Judicial Conduct (information acquired by a judge in
a judicial capacity should not be used or disclosed by the judge in
financial dealings or for any other purpose not related to judicial
duties). Cf. RPC 1.6(b)(1) (a lawyer shall reveal to the proper
authorities confidential information relating to representation of
a client as soon as and to the extent the lawyer reasonably
believes necessary to prevent the client from committing a
criminal, illegal or fraudulent act the lawyer reasonably believes
is likely to result in death or substantial bodily harm or
substantial injury to the financial interest or property of
another).
Unlike the situation described in Opinion 657, supra, 1 N.J.L.
129, 130 N.J.L.J. 656, respondents and most of the other
commentators do not differentiate between their ADR activities and
their legal practices. In their advertising, they hold themselves
out as lawyers who, in addition to traditional civil and/or
criminal trial work, also provide ADR services, including
arbitration and mediation, both as counsel and third party
neutrals. None can recall a client ever having expressed confusion
or surprise over their provision of ADR services as part and parcel
of their law practices. To the contrary, many of their clients
retained them precisely because of their familiarity with and
willingness to engage in alternative dispute resolution when
practicable.
Attorneys engaged in ADR activities consider themselves
professionals in dispute resolution. They report that their
activities, be they negotiating, advocating in mediation,
arbitration, or litigation settings, or, when no conflicts of
interest arise, serving as third party neutrals, have been of great
benefit to their client community. Their experience in ADR has
also provided them with a theoretical as well as practical
perspective they might not otherwise have gained and has influenced
their "traditional" adversarial practice, just as their litigation
practice has informed and strengthened their ADR practice.
It is therefore apparent that ADR has become part and parcel
of the practice of law and constitutes a tool of equal rank with
litigation to achieve, in the proper case, prompt and cost
effective dispute resolution. When a lawyer discusses the
potential of ADR with a client, participates as an advocate in
mediation or arbitration, or serves as a third party neutral, he or
she is acting as a lawyer and is not engaging in a separate
business. In fact, without exception, the commentators'
professional liability insurance policies include their activities
as arbitrators, mediators and third party neutrals among the
covered conduct.
This is not to say that only lawyers appropriately may provide
third party neutral services. There are many trained and
experienced lay arbitrators acting under the aegis of the American
Arbitration Association and other recognized organizations. In
fact, with certain expressed exceptions, no special occupational
status or degree is required to be a mediator or receive mediation
training in the CDR programs administered by the Court. R. 1:40-10,
Guideline 1.1. Clearly, non-lawyers may provide ADR/CDR services
as long as they do not hold themselves out as lawyers and do not
engage in any activities, such as the rendering of legal advice,
that might constitute the unauthorized practice of law.
However, the fact that non-lawyers may and do serve as third
party neutrals does not mean that attorneys engaged in ADR are
rendering non-legal services to their clients. Therefore, unlike
ancillary business activities such as the medical-legal consulting
service described in Opinion 657, supra, 1 N.J.L. 129, 130 N.J.L.J.
656, ADR services may be rendered in the same location as and
jointly marketed or advertised with an attorney's legal practice.
* * *
Footnote: 1 1The statutory base for ADR in New Jersey is comprehensive
with the New Jersey Alternative Procedure for Dispute Resolution
Act, N.J.S.A. 2A:23A-1 et seq., and the New Jersey Arbitration Act,
N.J.S.A. 2A:24-1 et seq.
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