Active status for ADR neutrals moves forward

Two committees of the State Bar Board of Governors agreed last month, without any discussion to seek public comment on a rule change that will require members who offer private dispute resolution services to be active attorneys. The full board is expected to decide the issue in June, after the comment period ends.

The proposal would require anyone “occupying a position wherein he or she provides dispute resolution services such as arbitration or mediation” to maintain active State Bar status.

The bar has a longstanding policy that requires any person to be active if they “examine the law or pass upon the legal effect of any act, document or law.” However, the policy has not been enforced, and bar officials have taken notice as the number of lawyers and particularly retired judges who provide private judging services has increased — and changed their status to inactive. As such, they pay annual dues of $50, compared with $390 required of active lawyers.

A 1996 survey of what the bar calls “ADR neutrals” showed that 50 percent were active, 40 percent inactive and the remainder were in some other category. Bar officials are uncertain what current numbers are.

According to a background paper submitted to the board committees, the question of what constitutes the practice of law is not at issue. Rather, bar officials rely on the language of Article 1, Section 2 of the Rules and Regulations of the State Bar to state their case: No attorney can be inactive if they “examine the law or pass upon the legal effect of any act, document or law.”

“An attorney who serves as an ADR neutral is likely to be called upon to use these skills in providing ADR services,” according to the background paper. “Attorneys who are ADR professionals often advertise their attorney status (and/or former judicial service) as a benefit to those who retain them to provide ADR neutral services, thus emphasizing that legal skills enhance the process.”

The policy has been used in the past to deny inactive status to attorneys who act as law clerks, paralegals, real estate brokers, certified public accountants and others who examine the law, even though non-lawyers could engage in the same activities without breaking the law.

Although no judges testified before the committees last month, the California Judges Association has created a three-person group of retired judges to study the issue. JAMS, waiting for the CJA to act, has taken no position.

In general, retired judges who serve as ADR neutrals are concerned that forcing them to be active lawyers means, in effect, that mediation and arbitration constitute the practice of law. Under those circumstances, they worry that insurance carriers may shy away from providing the relatively low-cost liability insurance now available to them. Some retired judges also have expressed concern that if they have to return to active status, their exposure to discipline complaints will increase. In addition, they’re unhappy about MCLE requirements and, of course, higher dues.

The proposed amendment specifies that a member must be active if he or she is “occupying a position wherein he or she provides dispute resolution services such as arbitration or mediation.” Bar officials say that language intentionally does not define mediation or arbitration as the practice of law.

The bar proposal also offers a period of time for judges who have paid no fees since retiring from the bench to pay up. When judges retire, the State Bar advises them that bar membership, which is stayed while a judge remains on the bench, automatically is reactivated, and the judge must choose whether to go active or inactive. Although the vast majority respond to the advisory, about 60 retired judges statewide have not responded and are in arrears on bar dues.

The full proposal can be found at calbar.ca.gov. Comments must be submitted within 90 days.