Federal Agencies Told to Use ADR Techniques to Resolve Environmental Issues

Federal agencies have yet again been directed to use Alternative Dispute Resolution (ADR) techniques to resolve disputes.  This time the Acting Director of the Office of Management and Budget and the Chair of the Council on Environmental Quality have directed relevant departments and agencies to

“increase the appropriate and effective use of third-party assisted environmental collaboration as well as environmental conflict resolution to resolve problems and conflicts that arise in the context of environmental, public lands, or natural resources issues, including matters related to energy, transportation, and water and land management. See Memorandum on Environmental Conflict Resolution.

Of course this is not the first time the White House has encouraged the use of ADR techniques in the federal government. For example, in 1998 President Clinton ordered agencies and departments to take steps to promote greater use of ADR techniques to resolve disputes and to negotiate regulations See Memorandum for Heads of Executive Department and Agencies

The memo sets out the use of ADR techniques to address environmental matters and directs federal agencies to use neutral facilitation to settle conflicts in issues related to energy, transportation and water and land management issues.

The memo applies to all executive branch agencies with regard to each agency’s enabling legislation, the National Environmental Policy Act (NEPA) and other laws aimed at managing and conserving the environment, natural resources and public lands. The complete memo is here.

Information about other relevant federal environmental ADR resources can be found at the Department of Justice web site the Department of Interior Office of Collaborative Action and Dispute Resolution web site and the EPA Conflict Prevention and Resolution Center site.

The NHL Negotiations: Clients Move the Puck Toward a Settlement

The NHL players and owners finally appear to be making progress towards a collective bargaining agreement. Although no formal agreement, public reports indicate that the two sides are having meaningful and productive discussions around many of the critical issues. You might be surprised, though, that this was not thanks to Gary Bettman or Donald Fehr, the lead negotiators for management and the union respectively.

The latest set of meetings was held between six owners and eighteen players – that is between the actual clients and the real parties-in-interest. This, in an effort to build trust and find common ground and perhaps to demonstrate that the players were united. This could be the necessary breakthrough and has appeared to help the parties build some common understandings and develop some of the trust necessary to settle the dispute.

Trust, here as in other negotiated settlement, is the sine qua non of settlement. If the two sides do not trust each other, getting a deal done is going to be very difficult. Meeting without Fehr and Bettman may have given each side enough of an unfiltered understanding of the other side’s needs and interests; enough, in other words, for each party to sense that it understood the other party’s true interests and where that party could – and could not – move. This understanding can give each party a sense of control over the process and remove the public gesturing and posturing from the equation.

There is no agreement yet, but the talks are ongoing; which is half the battle. Hopefully, the ongoing talks and the development of trust will result in a settlement.

At this point, a settlement, almost at any settlement, will benefit the stakeholders, especially those stakeholders not at the table and avoid the train wreck of the loss of an entire season.

The National Hockey League Negotiations: Will Mediation Make a Difference?

As the NHL lockout reaches its 10^th week, it is hard from the outside to see any progress. Both the All-Star game and the Winter Classic have been cancelled and the two sides seem just as far apart as they were three months ago.

But one recent development which should delight hockey fans and ADR professionals alike is that the owners and players have finally agreed to mediation. Both sides have agreed that ongoing negotiations will be conducted under the auspices of mediators from the Federal Mediation and Conciliation Service. 

Although this may not seem like a huge development it is a step in the right direction. The owners and players union have been negotiating for months to no avail. There is hope that with the assistance of the mediator they may begin to make some progress.

Some collective bargaining disputes are very contentious; both parties play “hardball” to get the best deal for their side. They often, as here, resort to lockouts or strikes. Both tactics are designed to put economic pressure on the other party. The problem is that such tactics force the parties into ‘win-lose’ scenarios in part because the high cost of applying economic pressure compels parties to justify the costs of the pressure to their own stakeholders by ‘winning.’

This results in both sides finding it difficult to properly assess the short- and longer-term costs associated with their hardball tactics. To justify the costs and defend their actions to their own stakeholders, the owners and players engage in positional bargaining rather than thinking creatively and seeking solutions. This may be one explanation of why mediation has a lower success rate in collective bargaining disputes than in other arenas; the recent NBA and NFL lockouts are prime examples.

But even if mediation is not successful in the NHL dispute, agreeing to mediation shows that both sides are interested in being seen by their stakeholders and the public as reasonable and willing to negotiate. It shows that the parties are aware of the costs and risks of alienating their own stakeholders. The desire to be seen as reasonable may allow space for the parties, with the assistance of a skilled mediator, to engage in a serious conversation about the issues separating them.

Both sides would be wise to keep the costs of a failure to achieve a settlement in the forefront as they enter into mediation. As the mediators most assuredly will point out many times and in different ways, the costs of not settling will be high, probably higher than the costs of a settlement and will unquestionably end in a “lose-lose” situation. 

Absent settlement, the consequences are likely to be union decertification; litigation; the loss of yet another hockey season; disaffected arena owners and local businesses, subjection to the mercy of judges and, possibly, the permanent loss of hockey’s fan base, without whom, there is no sport.

This is a situation we’ll be following closely. Hopefully both sides will see the merit of mediation and can follow the precedents set by baseball  and other collective bargaining negotiations that have benefited from mediation.

Prepared with Assistance from Michael Ciccarone

Maryland Mediation Confidentiality Act: Invoking the Magic Words

The Maryland legislature recently passed the Maryland Mediation Confidentiality Act  that took effect on October 1, 2012. It created a new subtitle 18 of Article 3, Courts and Judicial Proceedings of the Annotated Code of Maryland. 

The Act requires mediators to certify, in writing, “that the mediator has read and, consistent with state law, will abide by the Maryland Standard of Conduct for mediators…” for the confidentiality protections to apply (See Article 3-1802 (A) (2))

The provision in the Act requiring mediators to certify adherence to ethical standards means that the statutory confidentiality protections can be lost if the mediator fails to so certify, in writing.  In essence the parties, not the mediator, are punished by a mediator’s failure to invoke the magic words. They can lose the confidentially protection in the Act, often the sine qua non of mediation.

Mediators in Maryland must be aware of with this statute because it affects our practice; failure to follow the Act could result in parties losing the confidentiality provisions of the statute and expose the mediator to liability.

It is not hard to imagine that a party, having lost the confidentiality protection because of the mediator, could be pretty unhappy.  Enough to sue the mediator.

Here is a brief summary of some other important provisions of the statute.

With certain exceptions, the Act applies to cases in which the parties have agreed in writing that the Act applies or when they are required to mediate by law, except in court-referred cases under Title 17 of the Maryland Rules of Procedure.

However, the Maryland act does not apply to:

·        Maryland Court-annexed mediation conducted under Title 17 of the Maryland Rules;
·        Collective bargaining disputes;
·        Actions to enforce agreements to arbitrate under common law and the various Arbitration Acts;
·        Lien foreclosure mediation under Maryland Rule 14-209.1;
·        Certain parental matters under Maryland Rules 2-541; 2-542, 2-543, or 9-205.2;  
·        Mediation cases conducted by a judge who might rule based on the dispute; and 

·        Cases in which the parties and the mediator agree in advance in writing to exclude all or parts of mediation communication from the application of the statute.       

  

The Act also provides that signed agreements between the parties are not confidential unless the parties agree otherwise in writing. 

Section 3-1804 (B) of the Act sets our specific exceptions to the confidentiality standard. Those are:

·        A reasonable belief that the disclosure is necessary to prevent serious bodily harm or death;
·        To assert or defend against allegations of mediator misconduct or negligence or attorney professional misconduct or malpractice; or
·        To deal with allegations that, because of fraud, duress, or misrepresentation (emphasis added), a contract arising out of a mediation should be rescinded or damages should be awarded.

Finally, Section 3-1804 (C) has a general exception to the confidentiality provisions in the Act that allows a court to order mediation communications disclosed:

“…only to the extent that the court determines that the disclosure is necessary to prevent an injustice or harm to the public interest that is of sufficient magnitude in the particular case to outweigh the integrity of mediation.”

This, ‘prevent an injustice’ provision to allows the courts to act, when necessary, to protect threats to the public health, to address rare cases of potential denial of civil due process and even to protect a criminal defendant's constitutional rights. Absent such a general exception, it is possible that the statute would allow an injustice in the name of protecting mediation confidentiality. For an example of how a statute written to absolutely prohibit disclosure can result in such injustices, see my blog posts here and here 

Mediators Now Targets of Internet Scams: A Cautionary Tale

The internet is a great tool for all legal professionals, including mediators. Between the information available online and the ease in sharing information, it is almost impossible to imagine a world without the internet.

The bad news, however, is that the internet also increases the ease with which internet scammers can communicate their malice.  We all have seen how common internet scams have become. Internet scams cost businesses a great deal of money and frustration; it is essential to know what to look for to avoid these traps.

Mediators are now well enough established in business to become targets of scams.

We recently learned of a scam going around, targeting mediators in particular.

Here is a cautionary tale. 

The scam involves two alleged companies (in this particular scam, Barr Holdings and Arrow Electronics) who are alleged to be involved in a commercial dispute and request the help of a mediator. If the mediator agrees to help, a mediation contract is sent to the mediator with the signature of both company presidents. Here are the initial email exchanges, copied verbatim:

How are you today? We would like to thank you for your response to our inquiry for legal services. On behalf of Barr Holdings Limited, we are one of the UK's leading design and construction companies, specializing in the design and construction of sports stadia and arenas as well as large scale leisure, commercial, and retail projects.

However, We wish to inform you that we would be needing your mediation help to assist us with a breach of contract matter and also retrieve funds owed to our company. We ordered goods from Arrow Electronics, Inc. and was asked to make a 50% down payment for goods to be delivered to us and that we did and up till date no goods were delivered. We asked for a refund and they made a part payment and after that no other payment was made. We seek your help to help us collect these funds owed to our company amicably as we do not wish to go any further with the said transaction. We have made several attempts in the past to collect these funds which all ended negatively. We are aware that a conflict search would need to be done.

Here is the name of our supplier for your conflict check of interest-

Arrow Electronics, Inc., 7067 Columbia Gateway Drive, Suite 170 Columbia, MD 21046

Attached to this email you will find attached copy of contract, email correspondence and proof of payment for your perusal. We are prepared to pay a reasonable retainer fee for this service as soon as our board gets to review the terms of your engagement. So please have that sent to my attention via email if this is a case you are willing to handle.

What we require from you is to mediate the dispute and collect the funds peacefully without litigation [emphasis added]. We look forward to your prompt response. We wanted to also inform you that the said funds owed to us has caused a great strain on our company's operational capital and we want this issue to be resolved quickly. We would like to know a few things about your firm and also how you intend to handle this dispute

Then the mediator is sent an email claiming that the two sides have come to an agreement and one party will send a cashier’s check to the mediator to deposit and hold in trust on behalf of the other party.

On behalf of Barr Holdings Limited we have decided to retain your services after our review of your terms and attached herewith is a copy of the signed agreement. Due to your establishment as our mediator in the United States we have been able to yield a positive result.

Furthermore, we had talks with our contact and brought the possibility of mediation to his notice as we informed him of our correspondence with your service. He informed us that some Payment will be effected on or before 8th November 2012.

This is a positive breakthrough for me as this development will eventually reduce time and cost for all parties involved. However I do not intend to introduce any legal pressure unless the deadline of 8th November 2012.

Contract is breached. I do hope you understand my position as i intend to introduce litigation as a last resort.

I instructed that further correspondence including payment be made via our mediator. Please confirm name and mailing address check payments is to be made out on so we can forward it to him at once. It is also my thinking that your engagement fee be deducted as soon as funds are received by you and the balance held in trust pending further instruction.

I await your urgent acknowledgment and requested details as time is of the essence thank you.”

After the mediator receives the check – supposedly to pay a portion of the money owed that was in dispute -- the party sending the check asks the mediator to wire a portion of the funds to a creditor of the party. A wire transfer cannot be undone. Once the money is sent, it is gone.

In the scam, of course, the cashier’s check is fraudulent, and the mediator is now responsible for the money sent to the creditor. Unlike wire transfers, counterfeit cashier checks are not good until the issuing bank actually pays. So a wire transfer irrevocably removes money from the account and the fraudulent cashier’s check is not finally payable – even if the money initially appears in an account -- until after it has cleared by the issuing bank, which can take days, often longer. Thus, in the scam, the mediator is exposed to losing all of the money sent via wire transfer.  Here is the email exchange from the scammer trying to close the deal.

 How are you doing today??

Please do proceed with the swift wire transfer to our creditors as instructed yesterday. Today is the last date giving to us by our creditor to remit payment to them as promised. I Hope you understand how important this transaction mean to us because we don't want our company to be sued. if they file a law suit against us it will bring a bad reputation to our company and we will also loose our business relationship with our creditor. Due to my daughter condition am leaving the offices to know how she doing so keep me updated once the transfer is made this morning your time. I strongly believe you can handle the transaction ASAP.

Await your acknowledgment of instructions and wire confirmation slip thank you.”

This is an all-too-common situation. Mediators and attorneys must be on the lookout for scams.  Fortunately in this case the mediator sensed there was something ‘fishy’ and did not bite.  

Be careful.

Here are some signs that you might be the target of a scam

• Does the email have poor grammar, spelling errors or strange vernacular in general? A large majority of scams come from outside the U.S. and generally do not write in English very well and often use translation websites. 

• Have you received emails or heard from both sides individually? Most scams are the work of one person who usually speaks for the other side. If you are only hearing from one party, there is a good chance it is part of a scam. 

• Has it developed quickly, or have the two sides come to an agreement without your help? This is usually part of scam. Whoever is part of the scam is trying to get the money from you without you even realizing what is happening.  

• Did you receive a call from a location that does not correspond with either party? The mediator and target of this scam was receiving calls from Naples, Florida, a home to neither of the parties involved. This should be another sign that something fishy is going on.

For more information on this particular scam and for more examples of how scammers contact you, go to LawPro's Avoid A Claim blog. You can also report if you have been the target of a suspected fraud and see tips on how to prevent fraud.

Assisted by Michael Ciccarone

Maryland Court of Appeals Adopts New Rules Changing Title 17 – Alternative Dispute Resolution

On Nov. 1, 2012 the Court of Appeals of Maryland adopted a rules order including changes to Title 17, governing the provision of Alternative Dispute Resolution (ADR) services in all court ordered cases in Maryland. 

In addition, the rules order changed Title 9  Family Law, including how ADR services are provided by the Maryland courts in family cases.

The rules will go into effect on January 1, 2013. The full text of a PDF file of the rules order is here. 

Title 17 begins on page 55 and Title 9 begins on page 44 of the document.  The ADR Section of the Maryland State Bar Association played a significant role in shaping much of Title 17. Anyone providing ADR services to the Circuit Courts of Maryland should be sure to review the new rule.   

Federal Agencies Directed to Use Conflict Resolution to Resolve Environmental Issues

Federal agencies have been directed yet again to use Alternative Dispute Resolution (ADR) techniques to resolve disputes.  This time the Acting Director of the Office of Management and Budget and the Chair of the Council on Environmental Quality have directed relevant departments and agencies to

“increase the appropriate and effective use of third-party assisted environmental collaboration as well as environmental conflict resolution to resolve problems and conflicts that arise in the context of environmental, public lands, or natural resources issues, including matters related to energy, transportation, and water and land management. See Memorandum on Environmental Conflict Resolution 

This is not the first time the White House has encouraged federal agencies to use ADR techniques. For example, in 1998 President Clinton ordered agencies and departments to take steps to promote greater use of ADR techniques to resolve disputes and to negotiate regulations. See Memorandum for Heads of Executive Departments and Agencies

The latest memorandum requires that agencies use ADR techniques when appropriate to develop regulations and policy, resolve land management disputes and resolve enforcement issues related to water and land management, energy and transportation issues.

The memo applies to the executive branch agencies’ enabling legislation, the National Environmental Policy Act (NEPA) and other laws aimed at managing and conserving the environment, natural resources and public lands.  The complete memo is here.

Information about some of the relevant federal environmental ADR resources can be found at the Department of Justice website the EPA Conflict Prevention and Resolution Center website and the Department of Interior Office of Collaborative Action and Dispute Resolution website.

Mediator Testimony

A recent New Jersey case is yet another example of why parties need to be careful when they pick a mediator.

And why there should be higher standards of mediator training – perhaps especially for judges.

Information about this case comes from the always interesting Business Conflict Management Blog by Peter Phillips in New Jersey.

According to Phillips’ blog, the New Jersey Superior Court Appellate Division recently approved for publication a decision in which a party to a mediation successfully sought to enforce a settlement agreement that was not fully reduced to writing. For purposes of this blog, the issue of whether the agreement was evidenced in writing is not particularly relevant.

What is relevant is that the plaintiff seeking enforcement of an alleged agreement, “supported the motion with a certification of their attorney and the mediator,” who also was deposed and testified at the hearing. A retired (and unnamed) New Jersey Superior Court Judge was the mediator.

As Phillips blogs, “(t)he trial judge on the motion found his former colleague’s testimony “highly credible.” Imagine that!”

The mediator submitted an affidavit and testified in support of a party’s motion. A mediator. Even though, as the court pointed out that both statute and rule, state that a mediator “may not disclose any mediation communication to anyone other than a participant in the mediation session,” and referred to that bar as “an evidentiary privilege.” The court justified the decision to allow the mediator’s affidavit and testimony because the privilege can be waived by the parties.

Even though the plaintiff unilaterally breached the confidentiality rule and statute, the court allowed (and relied on) the mediator’s evidence, perhaps because the defendants deposed the mediator. The trial judge ruled that confidentiality had been waived. But we don’t have any information about why or how.

Phillips succinctly sets out the concerns about this case:

What was the movant doing attaching a certification of the mediator to their opening papers, in open breach of statutory confidentiality obligations? What on earth was the former judge-cum-mediator doing executing a certification for that purpose? What was the trial judge doing putting himself in a position to rule on his former colleague’s credibility? Or the admissibility of his testimony as set forth in his certification? Was the opponent to the motion required not to depose the prospective witness and then argue no waiver?

The judge/mediator by allowing a party unilaterally to attach his certification and opinion about whether there was agreement in this case appears to have breached two of the cardinal rules of ethical mediation to not breach the confidentiality of the mediation and to not breach the duty of neutrality.

As Phillips writes, this case is a reminder a Mediation 101 lesson: Never Never Never Violate Mediation Confidentiality.

Frontiers of Mediator Confidentiality: Can You Reveal That an Offer Was Made?

Here is a link to an interesting discussion about the Frontiers of Mediator Confidentiality posted by Peter Phillips in his always interesting Business Conflict Blog.

As Phillips points out, nothing is as simple as it looks. He sets out an interesting hypothetical about mediator confidentiality and posits three questions.

Visit the blog and answer the three questions. My answers are yes to question 1 and no to question 3 (the easy questions) and in response to question 2 the mediator can send a copy of the letter faxed to plaintiff’s counsel. Plaintiff has a right to see that letter.

Read the hypothetical and answer the questions yourself.

Draft Rules Governing ADR Services in the Maryland Courts

Last week I posted a notice that the Maryland Standing Committee on Rules of Practice had published a draft rewrite of Rule 17 and Rule 9 regarding the provision of ADR services to disputants in the Maryland Courts. A link to both a clean copy of the proposed rules and a red-lined copy of that draft is here.

The ADR Section of the Maryland State Bar Association has submitted comments to the draft Rules.

As a member of the Section Council and chair of the ad hoc committee established to draft these comments for submission by ADR Section Council chair Craig Distelhorst, I have been significantly involved in this issue as I believe that this is an important issue not only for disputants referred to an ADR procedure in the courts, but to all who provide mediation in Maryland. A copy of those comments follows:

I submit this letter as Chair of the ADR Section Council of the Maryland State Bar Association on behalf of the Council and the 400+ members of the Section, all of whom are dedicated to the provision of quality ADR services to litigants in the Maryland courts.

We are grateful to the members of the ADR Rules Subcommittee for their efforts to propose changes to Maryland Rules 17 and 9. We appreciate that the Subcommittee has addressed a concern previously expressed by the Council regarding possible ambiguities in the current Rule as to what cases the confidentiality provisions apply. We commend the Subcommittee for these changes which address a major concern of the Council by drafting Rules that are clear and unambiguous in this regard.

We believe that there are a number of serious questions that need some additional study, input and discussion by the Maryland community of attorneys, ADR practitioners, and ADR practice organizations if mediation, as one of the available ADR procedures, is to be an effective means for dispute resolution in Maryland. We offer the following suggestions and comments, in numerical order for your ease in review, in the hope that they will assist the Subcommittee to ensure that all, including the courts, litigants and their attorneys, and those in the ADR community understand and apply the Rules as intended.

Rules 17-102(b) and 17-202(b)(2) – ADR Organizations and Indirect Designation

The Council does not understand the problem the draft Rule is designed to address when it establishes new provisions that authorize the courts to designate an “ADR organization” who would then select the specific practitioner for the parties. On the contrary, we see problems if this new procedure results in an increase in the number of civil cases referred to various community mediation centers. There is already a considerable amount of consternation about community mediation centers, largely funded by taxpayer dollars and other public funds, providing free services to parties who could otherwise afford to pay. As written, this proposed rule would only exacerbate that concern. ADR services should not be provided free-of-charge to parties who have the ability and means to pay for them.

Analogous to publicly supported pro bono legal services in appropriate civil and criminal legal matters, free mediation should be available for those litigants in the Circuit Courts who cannot afford to pay. The too-frequent delivery of free services to parties in the Circuit Courts is unnecessary and could have unintended consequences on the provision of mediation services throughout Maryland. Additionally, it poses the real risk of significantly devaluing mediation everywhere in Maryland, not just in the Circuit Courts. We are concerned that the draft rule changes enabling the courts to designate community mediation centers will only add to this problem.

Thus, we provide the following draft language for the Subcommittee’s consideration:

Rule 17-102

(b) ADR Organization

“ADR Organization” means an entity, designated by the court for purposes of a non-fee-for-service ADR, which selects individuals who possess the qualifications required by Rule 9-205 or the Rules in this Title to conduct ADR ordered by the court.

Rule 17-202

(b) Tentative Designation of ADR Practitioner

(1) Direct Designation

In an order referring an action or matter to ADR, the court may tentatively designate, from a list of approved ADR practitioners maintained by the court pursuant to Rule 17-206, an ADR practitioner to conduct ADR.

(2) Indirect Designation

Should one or more parties in a case referred to ADR submit an acceptable fee-waiver request, the court may modify its order of referral to require a non-fee-for-service ADR and tentatively delegate to an ADR organization from a list maintained by the court pursuant to Rule 17-206, the authority to select an ADR practitioner qualified under Rules 17-204 or 17-205, as applicable, to conduct ADR. An individual selected by the ADR organization pursuant to the court order shall be deemed to be a court-designated ADR practitioner.

Rule 17-102(f) Definition of Fee for Service

Rule 17-102(f) defines “fee-for-service” as meaning that a party “may or will (emphasis added) be charged by an individual designated by a court to conduct ADR under the Rules in this Title or by the ADR organization that selects the individual.” This definition is confusing as to the meaning and purpose. Is it intended to allow for fees to be waived for some parties? For some services but not others? Does the Committee intend to provide any guidelines about when or under what circumstances fees would or would not be assessed?

Rule 17-103. Role of the Mediator

The Council has learned that there is significant concern in the mediation community of ambiguity regarding the drafting of agreements by Mediators. Therefore the Council requests that the Rule and Committee Note acknowledge current practices and provide guidance on best practices in this regard and provide some clarity. Currently the proposed Committee Note to Rule 17-103 acknowledges that “(m)ediators often will record points of agreement expressed by the parties to provide documentation of the results of the mediation,” however this fairly clear language becomes less clear when in the second sentence the Note states that “(b)ecause a mediator who is not a Maryland lawyer is not authorized to practice law in Maryland, and a mediator who is a Maryland lawyer ordinarily would not be authorized to provide legal advice or services to the parties in conflict, a mediator should not be drafting agreements regarding matters in litigation for the parties to sign."

Without more, these two provisions fail to meaningfully distinguish between “drafting” and “recording points expressed.” This confusion is heightened when Mediators in various jurisdictions are given sample parenting plan templates to modify and rewrite agreements with the parties.



Toward resolving the perceived confusion, we note that the American Bar Association Section of Dispute Resolution has addressed this issue in a 2002 resolution in which the Dispute Resolution Section has expressly concluded that drafting a “memorandum of understanding or settlement agreement by a mediator, incorporating the terms of settlement specified by the parties, does not constitute the practice of law.” This view was re-enforced by their 2010 opinion which sets forth the circumstances, i.e., "best practices" for mediator drafting. Rather than summarize these documents we have provided copies with this letter.

To ensure that mediators are engaging in appropriate and ethical conduct, the Council requests for the Rules to provide clarity when mediators are at risk of crossing the line into practicing law without a license or violating the Maryland Lawyers' Rules of Professional Conduct. With that objective in mind, the Council suggests that the Committee Note be rewritten as follows:

Mediators often will prepare a document entitled points of agreement reached by the parties. Use and completion of forms provided by the Court with language adopted by the parties is consistent with this rule. A mediator who is not a Maryland lawyer is not authorized to practice law in Maryland and should not be preparing documents outside of the mediation session and without party input. A mediator who is a Maryland lawyer is not authorized to provide legal advice or services to both parties to a conflict unless the conflict of interest is knowingly waived by the parties pursuant to the Maryland Lawyers' Rules of Professional Conduct. Any document prepared by the mediator to be signed by the parties should clearly state in bold above the signature line that the parties should obtain counsel before signing the document. The mediator should advise the parties of the bold statements above the signature lines. Language in a document which is fully discussed and adopted by the parties as their own is consistent with this rule.



Beyond the drafting quagmire, Rule 17-103 seems to ignore and raise doubts about common Mediator practices. The Rule appears to prohibit mediators from offering their opinions, engaging in other ADR processes and recommending the terms of an agreement. There is a long running debate about whether mediators are purely facilitative or can ever be analytical in style. The use of the analytical mediation style is successfully employed in this State and many other States and responds to those situations when counsel for the parties and the parties themselves want to hear a Mediator’s analysis of certain positions. The Council requests that the Rule acknowledge this practice to provide further clarity and guidance to the ADR community.




Rule 17-202 – Settlement Conferences

When read in its entirety, Rule 17-202 appears to favor settlement conferences as the preferred and first-in-time ADR procedure. In particular, the first and second sentences of draft Rule 17-202(a) imply that a free settlement conference should be the first method of dispute resolution utilized, with the other ADR methods, including mediation, accomplished subsequently, if at all. Since we do not believe that is the intent of the Subcommittee, it would be helpful if some additional language were added to this subparagraph that clarified when settlement conferences should be generally held. To that end, we propose the following language for your consideration:

17-202 (a) Participation Requirements

The court may refer an action or matter to one fee-for-service ADR process in accordance with sections (b), (c), and (d) of this Rule, but participation in that ADR may not be required if a timely objection to participation is filed. The court may also require the parties and their attorneys to participate in one non-fee-for-service settlement conference, which should generally be conducted, if at all, subsequent to an earlier ADR process. Any objection to participation in the ADR process selected by the court other than a non-fee-for-service settlement conference or to the ADR practitioner tentatively designated by the court shall be made in accordance with section (e) of this Rule.

Rule 17-202 – Fees for Service

Rule 17-202(d) provides that a circuit court’s order of referral “shall specify the hourly rate that the ADR practitioner may charge for ADR services in the action, which may not exceed the maximum stated in the applicable schedule.”^[1] We understand that a maximum rate would apply for the work accomplished by a mediator who was tentatively designated by the court, but we are concerned that the language of Rule 17-202(d) also could be interpreted as setting a maximum rate that would apply even if the parties select their own mediator.

Rule 17-202(e)(3) adds to this confusion. This draft subsection authorizes the courts to revoke or modify their orders of referrals if a party timely objects, including instances in which a party objects and identifies a different ADR practitioner to conduct the mediation. Thus, if the parties select their own mediator, the court could either revoke its order (thereby releasing the parties from any obligation to go forward with it) or modify it with the name of the new mediator. If it’s the latter, is that new mediator also bound by the maximum hourly rate set forth in the order of referral? If so, the effect would be to allow parties to select their own private mediator, request that a court so designate that person in its modified (or new) order, and impose the maximum court rate for the service. The Council believes that this type of situation would be impractical and damage private mediation practice throughout Maryland. We do not believe that is the intent of the Subcommittee in drafting this Rule.

We believe that there is a simple and very effective approach that would address this potential problem directly. Specifically, we request that the well-drafted language currently proposed for the selection of mediators for custody and visitation disputes under Rule 9-205(d)(5) also be used in Rule 17-202. Draft Rule 9-205(d)(5) identifies the procedures parties may use to substitute someone else in place of the court-designated mediator, including a sample Request to Substitute Mediator, and it makes clear that a mediator selected by stipulation of the parties is not subject to the maximum fee schedule.

The Council does not believe the fee rules should be different for custody/visitation mediation and other types of civil mediation. Rather, we believe that there is a great benefit to the courts, the bar, and the public if the fees language is consistent between the two mediation rules.^[2] Thus, we strongly urge the Subcommittee to amend Rule 17-202 so that it mirrors Rule 9-205(d)(5) (or use the same language verbatim)

Rule 17-202 -- Alternatives A and B

In response to the Subcommittee’s request for comments about Alternative A and Alternative B, the Council believes Alternative A, of the two choices, is by far the better option for disputants, their attorneys and ADR professionals. Alternative A mandates that parties participate in one non-fee-for-service settlement conference. Alternative B appears to require the parties to participate in a non-fee-for-service settlement conference and a non-fee for service mediation. While these options are described as free, they are not free – the parties will have to spend the time, money and in cases of represented parties, attorney fees – to participate in two such proceedings. The Council questions the value to anyone of such an approach. Further, it would be useful to have a better understanding about the reasons for contemplating a non-fee-for-service settlement conference as provided in Rule 17-202(a) Alternatives A and B.

Rule 17-204(a) – Qualifications of Court-Designated Mediators

The Council supports policies that give the courts discretion to consider mediator subject matter knowledge and or experience with the type of case when referring cases to mediation. This would allow court mediation programs to emphasize the knowledge, training and experience of mediators when referring civil litigation cases to mediation. Rule 17-204(b) – (e) already provides that in certain types of case mediators should have additional knowledge and experience. This would explicitly allow courts to consider such additional experience in other types of cases where appropriate.

Many members of the Council also question the basis of and reasons for eliminating the requirement of a bachelor’s degree from an accredited college or university as one of the basic qualifications, especially given that the current Rule provides that this requirement can be waived by the courts.

It is not too late to submit comments about the Rule changes, if not to the Standing Committee, then certainly to the Maryland Court of Appeals which will hold a public hearing before the final Rules are approved. If you are interested in participating in this debate - even if you do not practice in Maryland - please feel free to contact me or submit comments below.

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[1] “ADR Practitioner” is defined earlier in the draft Rules as an “individual who conducts an ADR under the Rules in this Title.” Rule 17-102(c).

[2] We also note that our proposed change would make Rule 17 more consistent with the proposed Rule 9-205.2 currently before the Court of Appeals for review and adoption. Rule 9-205.2 concerns the appointment of Parent Coordinators and, similar to Rule 9-205(d)(5), makes clear that the court’s maximum fee schedule does not apply to parent coordinators selected by the parties, even if those selections are entered by the courts in a consent order.

Draft Rules Governing ADR Services in the Maryland Courts

Last week I posted a notice that the Maryland Standing Committee on Rules of Practice had published a draft rewrite of Rule 17 and Rule 9 regarding the provision of ADR services to disputants in the Maryland Courts. A link to both a clean copy of the proposed rules and a red-lined copy of that draft is here.

The ADR Section of the Maryland State Bar Association has submitted comments to the draft Rules.

As a member of the Section Council and chair of the ad hoc committee established to draft these comments for submission by ADR Section Council chair Craig Distelhorst, I have been significantly involved in this issue as I believe that this is an important issue not only for disputants referred to an ADR procedure in the courts, but to all who provide mediation in Maryland. A copy of those comments follows:

I submit this letter as Chair of the ADR Section Council of the Maryland State Bar Association on behalf of the Council and the 400+ members of the Section, all of whom are dedicated to the provision of quality ADR services to litigants in the Maryland courts.

We are grateful to the members of the ADR Rules Subcommittee for their efforts to propose changes to Maryland Rules 17 and 9. We appreciate that the Subcommittee has addressed a concern previously expressed by the Council regarding possible ambiguities in the current Rule as to what cases the confidentiality provisions apply. We commend the Subcommittee for these changes which address a major concern of the Council by drafting Rules that are clear and unambiguous in this regard.

We believe that there are a number of serious questions that need some additional study, input and discussion by the Maryland community of attorneys, ADR practitioners, and ADR practice organizations if mediation, as one of the available ADR procedures, is to be an effective means for dispute resolution in Maryland. We offer the following suggestions and comments, in numerical order for your ease in review, in the hope that they will assist the Subcommittee to ensure that all, including the courts, litigants and their attorneys, and those in the ADR community understand and apply the Rules as intended.

Rules 17-102(b) and 17-202(b)(2) – ADR Organizations and Indirect Designation

The Council does not understand the problem the draft Rule is designed to address when it establishes new provisions that authorize the courts to designate an “ADR organization” who would then select the specific practitioner for the parties. On the contrary, we see problems if this new procedure results in an increase in the number of civil cases referred to various community mediation centers. There is already a considerable amount of consternation about community mediation centers, largely funded by taxpayer dollars and other public funds, providing free services to parties who could otherwise afford to pay. As written, this proposed rule would only exacerbate that concern. ADR services should not be provided free-of-charge to parties who have the ability and means to pay for them.

Analogous to publicly supported pro bono legal services in appropriate civil and criminal legal matters, free mediation should be available for those litigants in the Circuit Courts who cannot afford to pay. The too-frequent delivery of free services to parties in the Circuit Courts is unnecessary and could have unintended consequences on the provision of mediation services throughout Maryland. Additionally, it poses the real risk of significantly devaluing mediation everywhere in Maryland, not just in the Circuit Courts. We are concerned that the draft rule changes enabling the courts to designate community mediation centers will only add to this problem.

Thus, we provide the following draft language for the Subcommittee’s consideration:

Rule 17-102

(b) ADR Organization

“ADR Organization” means an entity, designated by the court for purposes of a non-fee-for-service ADR, which selects individuals who possess the qualifications required by Rule 9-205 or the Rules in this Title to conduct ADR ordered by the court.

Rule 17-202

(b) Tentative Designation of ADR Practitioner

(1) Direct Designation

In an order referring an action or matter to ADR, the court may tentatively designate, from a list of approved ADR practitioners maintained by the court pursuant to Rule 17-206, an ADR practitioner to conduct ADR.

(2) Indirect Designation

Should one or more parties in a case referred to ADR submit an acceptable fee-waiver request, the court may modify its order of referral to require a non-fee-for-service ADR and tentatively delegate to an ADR organization from a list maintained by the court pursuant to Rule 17-206, the authority to select an ADR practitioner qualified under Rules 17-204 or 17-205, as applicable, to conduct ADR. An individual selected by the ADR organization pursuant to the court order shall be deemed to be a court-designated ADR practitioner.

Rule 17-102(f) Definition of Fee for Service

Rule 17-102(f) defines “fee-for-service” as meaning that a party “may or will (emphasis added) be charged by an individual designated by a court to conduct ADR under the Rules in this Title or by the ADR organization that selects the individual.” This definition is confusing as to the meaning and purpose. Is it intended to allow for fees to be waived for some parties? For some services but not others? Does the Committee intend to provide any guidelines about when or under what circumstances fees would or would not be assessed?

Rule 17-103. Role of the Mediator

The Council has learned that there is significant concern in the mediation community of ambiguity regarding the drafting of agreements by Mediators. Therefore the Council requests that the Rule and Committee Note acknowledge current practices and provide guidance on best practices in this regard and provide some clarity. Currently the proposed Committee Note to Rule 17-103 acknowledges that “(m)ediators often will record points of agreement expressed by the parties to provide documentation of the results of the mediation,” however this fairly clear language becomes less clear when in the second sentence the Note states that “(b)ecause a mediator who is not a Maryland lawyer is not authorized to practice law in Maryland, and a mediator who is a Maryland lawyer ordinarily would not be authorized to provide legal advice or services to the parties in conflict, a mediator should not be drafting agreements regarding matters in litigation for the parties to sign."

Without more, these two provisions fail to meaningfully distinguish between “drafting” and “recording points expressed.” This confusion is heightened when Mediators in various jurisdictions are given sample parenting plan templates to modify and rewrite agreements with the parties.



Toward resolving the perceived confusion, we note that the American Bar Association Section of Dispute Resolution has addressed this issue in a 2002 resolution in which the Dispute Resolution Section has expressly concluded that drafting a “memorandum of understanding or settlement agreement by a mediator, incorporating the terms of settlement specified by the parties, does not constitute the practice of law.” This view was re-enforced by their 2010 opinion which sets forth the circumstances, i.e., "best practices" for mediator drafting. Rather than summarize these documents we have provided copies with this letter.

To ensure that mediators are engaging in appropriate and ethical conduct, the Council requests for the Rules to provide clarity when mediators are at risk of crossing the line into practicing law without a license or violating the Maryland Lawyers' Rules of Professional Conduct. With that objective in mind, the Council suggests that the Committee Note be rewritten as follows:

Mediators often will prepare a document entitled points of agreement reached by the parties. Use and completion of forms provided by the Court with language adopted by the parties is consistent with this rule. A mediator who is not a Maryland lawyer is not authorized to practice law in Maryland and should not be preparing documents outside of the mediation session and without party input. A mediator who is a Maryland lawyer is not authorized to provide legal advice or services to both parties to a conflict unless the conflict of interest is knowingly waived by the parties pursuant to the Maryland Lawyers' Rules of Professional Conduct. Any document prepared by the mediator to be signed by the parties should clearly state in bold above the signature line that the parties should obtain counsel before signing the document. The mediator should advise the parties of the bold statements above the signature lines. Language in a document which is fully discussed and adopted by the parties as their own is consistent with this rule.



Beyond the drafting quagmire, Rule 17-103 seems to ignore and raise doubts about common Mediator practices. The Rule appears to prohibit mediators from offering their opinions, engaging in other ADR processes and recommending the terms of an agreement. There is a long running debate about whether mediators are purely facilitative or can ever be analytical in style. The use of the analytical mediation style is successfully employed in this State and many other States and responds to those situations when counsel for the parties and the parties themselves want to hear a Mediator’s analysis of certain positions. The Council requests that the Rule acknowledge this practice to provide further clarity and guidance to the ADR community.




Rule 17-202 – Settlement Conferences

When read in its entirety, Rule 17-202 appears to favor settlement conferences as the preferred and first-in-time ADR procedure. In particular, the first and second sentences of draft Rule 17-202(a) imply that a free settlement conference should be the first method of dispute resolution utilized, with the other ADR methods, including mediation, accomplished subsequently, if at all. Since we do not believe that is the intent of the Subcommittee, it would be helpful if some additional language were added to this subparagraph that clarified when settlement conferences should be generally held. To that end, we propose the following language for your consideration:

17-202 (a) Participation Requirements

The court may refer an action or matter to one fee-for-service ADR process in accordance with sections (b), (c), and (d) of this Rule, but participation in that ADR may not be required if a timely objection to participation is filed. The court may also require the parties and their attorneys to participate in one non-fee-for-service settlement conference, which should generally be conducted, if at all, subsequent to an earlier ADR process. Any objection to participation in the ADR process selected by the court other than a non-fee-for-service settlement conference or to the ADR practitioner tentatively designated by the court shall be made in accordance with section (e) of this Rule.

Rule 17-202 – Fees for Service

Rule 17-202(d) provides that a circuit court’s order of referral “shall specify the hourly rate that the ADR practitioner may charge for ADR services in the action, which may not exceed the maximum stated in the applicable schedule.”^[1] We understand that a maximum rate would apply for the work accomplished by a mediator who was tentatively designated by the court, but we are concerned that the language of Rule 17-202(d) also could be interpreted as setting a maximum rate that would apply even if the parties select their own mediator.

Rule 17-202(e)(3) adds to this confusion. This draft subsection authorizes the courts to revoke or modify their orders of referrals if a party timely objects, including instances in which a party objects and identifies a different ADR practitioner to conduct the mediation. Thus, if the parties select their own mediator, the court could either revoke its order (thereby releasing the parties from any obligation to go forward with it) or modify it with the name of the new mediator. If it’s the latter, is that new mediator also bound by the maximum hourly rate set forth in the order of referral? If so, the effect would be to allow parties to select their own private mediator, request that a court so designate that person in its modified (or new) order, and impose the maximum court rate for the service. The Council believes that this type of situation would be impractical and damage private mediation practice throughout Maryland. We do not believe that is the intent of the Subcommittee in drafting this Rule.

We believe that there is a simple and very effective approach that would address this potential problem directly. Specifically, we request that the well-drafted language currently proposed for the selection of mediators for custody and visitation disputes under Rule 9-205(d)(5) also be used in Rule 17-202. Draft Rule 9-205(d)(5) identifies the procedures parties may use to substitute someone else in place of the court-designated mediator, including a sample Request to Substitute Mediator, and it makes clear that a mediator selected by stipulation of the parties is not subject to the maximum fee schedule.

The Council does not believe the fee rules should be different for custody/visitation mediation and other types of civil mediation. Rather, we believe that there is a great benefit to the courts, the bar, and the public if the fees language is consistent between the two mediation rules.^[2] Thus, we strongly urge the Subcommittee to amend Rule 17-202 so that it mirrors Rule 9-205(d)(5) (or use the same language verbatim)

Rule 17-202 -- Alternatives A and B

In response to the Subcommittee’s request for comments about Alternative A and Alternative B, the Council believes Alternative A, of the two choices, is by far the better option for disputants, their attorneys and ADR professionals. Alternative A mandates that parties participate in one non-fee-for-service settlement conference. Alternative B appears to require the parties to participate in a non-fee-for-service settlement conference and a non-fee for service mediation. While these options are described as free, they are not free – the parties will have to spend the time, money and in cases of represented parties, attorney fees – to participate in two such proceedings. The Council questions the value to anyone of such an approach. Further, it would be useful to have a better understanding about the reasons for contemplating a non-fee-for-service settlement conference as provided in Rule 17-202(a) Alternatives A and B.

Rule 17-204(a) – Qualifications of Court-Designated Mediators

The Council supports policies that give the courts discretion to consider mediator subject matter knowledge and or experience with the type of case when referring cases to mediation. This would allow court mediation programs to emphasize the knowledge, training and experience of mediators when referring civil litigation cases to mediation. Rule 17-204(b) – (e) already provides that in certain types of case mediators should have additional knowledge and experience. This would explicitly allow courts to consider such additional experience in other types of cases where appropriate.

Many members of the Council also question the basis of and reasons for eliminating the requirement of a bachelor’s degree from an accredited college or university as one of the basic qualifications, especially given that the current Rule provides that this requirement can be waived by the courts.

It is not too late to submit comments about the Rule changes, if not to the Standing Committee, then certainly to the Maryland Court of Appeals which will hold a public hearing before the final Rules are approved. If you are interested in participating in this debate - even if you do not practice in Maryland - please feel free to contact me or submit comments below.

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[1] “ADR Practitioner” is defined earlier in the draft Rules as an “individual who conducts an ADR under the Rules in this Title.” Rule 17-102(c).

[2] We also note that our proposed change would make Rule 17 more consistent with the proposed Rule 9-205.2 currently before the Court of Appeals for review and adoption. Rule 9-205.2 concerns the appointment of Parent Coordinators and, similar to Rule 9-205(d)(5), makes clear that the court’s maximum fee schedule does not apply to parent coordinators selected by the parties, even if those selections are entered by the courts in a consent order.