Increasing Ethical Scrutiny in ADR

California has proposed legislation pending in its Statehouse that takes direct aim at arbitrators whose ethics are questionable.  It was acted on as recently as yesterday, so it appears to be moving along in the process.

 SB 940, introduced by Orange County state senator Tom Umberg, is designed to enhance California's Consumer Contract Awareness Act of 1990.  Specifically as to arbitrators and mediators, though, it would require the State Bar of California to create a new program to certify alternative dispute resolution firms, providers, or practitioners.  This would include specified components, including procedures for a firm, provider, or practitioner to become a certified alternative dispute resolution firm, provider, or practitioner and different levels of tiers for certification. 

 The components would include:

• Making sure that arbitrators comply with the Ethics Standards for Neutral Arbitrators in Contractual Arbitration, pursuant to Section 1281.85 of the California Code of Civil Procedure;

• Making sure that mediators comply with the ethical standards contained in the Rules of Conduct for Mediators in Court-Connected Mediation Programs for General Civil Cases, pursuant to Rules 3.850 to 3.860, inclusive, of the California Rules of Court;

• Establishing a complaint procedure; and

• Establishing a procedure to remedy the failure of neutrals to comply with the ethics rules.

 As an incentive, the bill would allow for there to be tiers or levels of compliance which, no doubt, would be used as a marketing tool.

 California has long been viewed on the cutting edge of legal developments and this bill, if passed, would hold in line with that.  But it would be unwise to dismiss these ideas as being limited to California as it is likely that they will spread to other states if successful.

 To read the bill, click here.