On May 1, 2024, the Senate Judiciary Committee of the California legislature passed a heavily amended Senate Bill 940 aimed at regulating both arbitration and mediation services in California. According to a Los Angeles Daily Journal article published on May 2, 2024 (subscription only), the arbitration provisions may well run into issues of federal preemption: that is, run afoul of the Federal Arbitration Act, the mediation provisions are a different story.

The bill, if passed, would create a voluntary certification program for both mediators and arbitrators to be administrated by the State Bar of  California. It would  add Section 6173  to the California Business and Professions Code:

Article  10.1. Alternative Dispute Resolution Certification Program

6173.

 (a) The State Bar may create a program to certify alternative dispute resolution firms.

(b) If the State Bar creates a program pursuant to subdivision (a), the State Bar shall establish procedures for a firm to become a certified alternative dispute resolution firm that include, but are not limited to, a requirement that the firm verify all of the following:

(1) The firm requires, at a minimum, its arbitrators to comply with the Ethics Standards for Neutral Arbitrators in Contractual Arbitration as adopted by the Judicial Council pursuant to Section 1281.85 of the Code of Civil Procedure.

(2) The firm requires, at a minimum, its mediators to comply with ethical standards that are equivalent to the Rules of Conduct for Mediators in Court-Connected Mediation Programs for General Civil Cases as provided in Rules 3.850 to 3.860, inclusive, of the California Rules of Court.

(3) The firm has procedures in place for persons to make complaints regarding the failure of an arbitrator or mediator of the firm to comply with the standards described in paragraph (1) or (2), as applicable.

(4) The firm has procedures to remedy failures of arbitrators or mediators to comply with the standards described in paragraph (1) or (2), as applicable.

(c) If the State Bar creates a program pursuant to subdivision (a), the State Bar may charge a fee to cover the reasonable costs of administering the program.

 The author of the bill- Senator Tom Umberg, D-Santa Ana- notes both that the program is voluntary and that the State Bar does not have authority over non-lawyer mediators. ( Id. at Daily Journal article)

On April 26, 2024, the Senate published its latest legislative analysis. At the end of the analysis, it quotes comments from several organizations opposing the bill, one of which is the California Dispute Resolution Council. It makes the very valid point that the “certification”  will be misleading:

The [certification] process as set forth in the bill will be misleading. Certification often tells users that a certified business is superior to and has more experience than a business that is not certified. In addition, certification may aid users to discern for themselves the competency of the business. Yet, under SB 940, a firm can become certified almost immediately after its creation without ever having to conduct an arbitration or mediation and before it acquires either competency or experience. Secondly, the users of arbitration and mediation are frequently attorneys who are either aware of the reputed competency or experience of an arbitrator or mediator or have the means to find out. CDRC recognizes that there are occasional circumstances where a party appears in an arbitration or mediation without an attorney. In that situation, the unrepresented party is the user and may not be aware of the ethical standards or know how to file a complaint.  (Id. at 16)

According to the proposed bill, all that a “mediator” must do to acquire “certification” is agree to abide by the provisions in the California Rules of Court  (Rules 3.850-3.860 ) governing the ethics of mediators. There is no need for a mediator to have ever mediated a case!

While certification of mediators is a laudable goal, this proposal does not appear to be the way to do it. ( See, Comment of  MC3). Neither having the State Bar of California  conduct the certification process nor merely having a “mediator “ agree to follow the California Rules of Court pertaining to mediators is the way to create a valuable certification process.

Please do not hesitate to contact your state legislator and voice your opinion on this vital issue to the ADR community!

…. Just something to think about.

 

 

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