Rule 2.4 Lawyer as a Dispute Resolution Neutral
(a) A lawyer serves as a dispute resolution neutral when the lawyer impartially assists two or more persons who are not clients of the lawyer to reach a resolution of disputes that have arisen between them. Service as a dispute resolution neutral may include service as a mediator; an arbitrator whose decision does not bind the parties; a case evaluator; a judge or juror in a mini-trial or summary jury trial as described in Supreme Court Rule 31; or in such other capacity as will enable the lawyer to impartially assist the parties resolve their dispute.
(b) A lawyer may serve as a dispute resolution neutral in a matter if:
(1) the lawyer is competent to handle the matter;
(2) the lawyer can handle the matter without undue delay;
(3) the lawyer reasonably believes he or she can be impartial as between the parties;
(4) none of the parties to the dispute is being represented by the lawyer in other matters;
(5) the lawyer’s responsibilities to a client, a former client, or a third person, or the lawyer’s personal interests will not prevent the lawyer from providing competent and diligent service to each of the persons the lawyer will serve as a dispute resolution neutral;
(6) the lawyer communicates with each of the parties to the dispute, or their attorneys, about the lawyer’s qualifications and experience as a dispute resolution neutral, the rules and procedures that will be followed in the proceeding, and the lawyer’s responsibilities as a dispute resolution neutral; provided, however, that any party to the dispute who is represented by a lawyer may waive his or her right to all or part of the communication required by this paragraph;
(7) the lawyer communicates with each of the parties, or their lawyers, about any responsibility of the lawyer, or a lawyer associated with the lawyer in a firm, to a client, a former client, or third person, or a personal interest of the lawyer or a lawyer associated with the lawyer in a firm, that presents a significant risk of materially affecting the lawyer’s impartiality or materially limiting the dispute resolution services the lawyer will provide to the parties;
(8) unless the service is pursuant to Supreme Court Rule 31, each of the parties, or their attorneys, provides informed consent, confirmed in writing, to the lawyer’s service as a dispute resolution neutral in the matter; and
(9) when the service is pursuant to Supreme Court Rule 31, the lawyer is qualified to serve in accordance with the requirements of that Rule.
(c) While serving as a dispute resolution neutral, a lawyer shall:
(1) act reasonably to assure that the parties understand the rules and procedures that will be followed in the proceeding and the lawyer’s responsibilities as a dispute resolution neutral;
(2) act impartially, competently, and expeditiously to assist the parties in resolving the matters in dispute;
(3) promote mutual respect among the parties for the dispute resolution process;
(4) as between the parties to the dispute and third persons, treat all information related to the dispute as if it were information protected by RPCs 1.6 and 1.8(b);
(5) as between the parties to the dispute, treat all information obtained in an individual caucus with a party or a party’s lawyer as if it were information related to the representation of a client protected by RPCs 1.6 and 1.8(b);
(6) render no legal advice to any party to the dispute, but, if the lawyer believes that an unrepresented party does not understand how a proposed agreement might affect his or her legal rights or obligations, the lawyer shall advise that party to seek the advice of independent counsel;
(7) accept nothing of value, other than fully disclosed reasonable compensation for services rendered as the dispute resolution neutral, from a party, a party’s lawyer, or any other person involved or interested in the dispute resolution process;
(8) not seek to coerce or unfairly influence a party to accept a proposal for resolution of a matter in dispute and shall not make any substantive decisions on behalf of a party; and
(9) when the service is pursuant to Supreme Court Rule 31, comply with all other duties of a dispute resolution neutral as set forth in that Rule.
(d) A lawyer shall withdraw from service as a dispute resolution neutral or, if appointed by a court, shall seek the court’s permission to withdraw from service as a dispute resolution neutral, if:
(1) any of the parties so request;
(2) the lawyer reasonably believes that further dispute resolution services will not lead to an agreement resolving the matter in dispute or that any of the parties are unwilling or unable to cooperate with the lawyer’s dispute resolution initiatives; or
(3) any of the conditions stated in paragraph (b) are no longer satisfied.
(e) Upon termination of a lawyer’s service as a dispute resolution neutral, the lawyer:
(1) may, with the informed consent of all the parties to the dispute and in compliance with the requirements of RPCs 1.2(c) and 2.2, draft a settlement agreement that results from the dispute resolution process, but shall not otherwise represent any or all of the parties in connection with the matter, and
(2) shall afford each party to the dispute the protections afforded a client by RPCs 1.6, 1.8(b), and 1.9.
Comment
[1] Mediation, arbitration, and other forms of alternative dispute resolution have been in use for many years, but increasing demands in recent years for more prompt and efficient means of resolving disputes of all kinds have led to an increase in the demand for the services of dispute resolution neutrals skilled in the analysis of disputes and in conflict resolution. Lawyers are often particularly well-suited to perform this role and should be encouraged to do so.
[2] Although service as a dispute resolution neutral is considered a law-related service governed generally by these Rules, see RPC 5.7, the unique nature of a lawyer’s role when serving as a dispute resolution neutral demands separate, more specific treatment in this Rule for the guidance of the profession and the public.
[3] This Rule provides that a lawyer may serve as a dispute resolution neutral, whether as a mediator, a non-binding arbitrator, a case evaluator, or a judge or juror in a mini-trial or summary jury trial. The scope of a lawyer’s possible service as a neutral is intended to be generally the same as that adopted in Tennessee Supreme Court Rule 31 governing court-annexed alternative dispute resolution. However, although Rule 31 covers only court-annexed alternative dispute resolution, this Rule covers services as a dispute resolution neutral whether rendered in connection with court-annexed dispute resolution proceedings or in another, perhaps wholly private, context not covered by Rule 31.
[4] This Rule does not cover the rendering by a lawyer of services related to alternative dispute resolution that are not neutral in nature, but are more judicial in nature, such as service as an arbitrator in a binding arbitration. Although RPC 5.7 may address a lawyer’s obligations in such a context, this Rule does not purport to address them.
[5] Although a lawyer who serves as a dispute resolution neutral is subject to the Rules of Professional Conduct, see RPC 5.7, many of the Rules do not directly apply to such service because the participants in a dispute resolution proceeding are not the lawyer’s clients. Other Rules do apply, however, and this Rule further provides specific applications of certain rules that must apply differently in this context (including, for example, the application of rules governing conflicts of interest).
[6] Although the requirements of this Rule are generally intended to be consistent with those imposed on dispute resolution neutrals under Rule 31, there are duties additional to those set out in Rule 31 that are imposed on lawyers who serve in this role. See also Tenn. Sup. Ct. R. 31, Appendix: Standards of Professional Conduct for Rule 31 Mediators. Even though nonlawyers certified by the Supreme Court under Rule 31 as dispute resolution neutrals may not be subject to these Rules and the parties to the dispute are not deemed to be the clients of the lawyer serving as their dispute resolution neutral, the parties are properly entitled to assume that lawyers serving in this capacity are largely subject to the same broad standards of conduct as are applicable to lawyers when they are providing legal services to clients.
[7] The Supreme Court has set forth in Rule 31 rules and standards of professional conduct applicable to all Rule 31 neutrals, including lawyers and nonlawyers. Thus, paragraph (b) contemplates that a lawyer may serve as a Rule 31 neutral if the lawyer complies with these requirements. Paragraph (b)(9) further requires that a lawyer serving as a dispute resolution neutral pursuant to Supreme Court Rule 31 must comply fully with the requirements of that Rule as well.
[8] Paragraph (b) specifies the circumstances in which a lawyer may serve parties to a dispute as a dispute resolution neutral. With respect to the parties to the dispute, RPC 1.7 is inapplicable because there is no client-lawyer relationship between the neutral and the parties to the dispute. RPC 1.7 remains applicable, however, to protect a client, as distinct from parties the lawyer is serving as a neutral, if the lawyer’s service as a neutral will materially limit the lawyer’s representation of that client. Similarly, if the lawyer’s service as a neutral would be materially adverse to one of the lawyer’s former clients, and the matters are substantially related, the lawyer must afford the former client the protection of RPC 1.9.
[9] Conflicts of interest for lawyers serving as dispute resolution neutrals are specifically addressed because the parties to a dispute resolution proceeding are not the clients of the dispute resolution neutral. The lawyer serving as neutral, however, must be impartial, must fully disclose any pertinent relationships to the parties to the proceeding, and must obtain their consent to the lawyer’s service based on these disclosures. Paragraph (b)(4) does not provide for mandatory vicarious disqualification based on a lawyer’s current or prospective service as a dispute resolution neutral. If, however, a lawyer asked to serve as a neutral has a partner who currently represents one of the parties to the dispute in other matters, the lawyer obviously would be required to disclose this fact to the parties under (b)(7) and obtain informed consent, confirmed in writing, to service as a neutral. Of course, this lawyer must also possess a reasonable belief that impartiality was possible despite this and other such pertinent relationships. If a lawyer may not make the disclosures required by paragraph (b)(7) because of his or her confidentiality obligations to a client, then the lawyer may not serve as a dispute neutral.
[10] Paragraph (c) further provides various standards of conduct particular to service by a lawyer as a dispute resolution neutral. Again, these rules of conduct are intended to be consistent with Rule 31 and to address the particular situation of a neutral who occupies a significantly different relationship to participants in a dispute resolution proceeding than a lawyer does with clients. Paragraphs (c)(4) and (c)(5) treat the confidentiality of all information related to the dispute (including that obtained in individual caucuses with the parties) by analogy to the rules concerning the confidentiality of client information. Thus, for example, any question concerning the potential disclosure of fraud by a participant in a dispute resolution proceeding would be addressed under RPCs 1.6, 3.3, or 4.1 as though the participant were, in fact, a client of the lawyer. Likewise, the ethical duty of a lawyer serving as a dispute resolution neutral to report unethical conduct in a dispute resolution proceeding by a lawyer for a participant is limited by RPC 8.3(c). Other portions of paragraph (c), such as the ban on undisclosed compensation by one of the participants in paragraph (c)(7), the prohibition on coercion or decision making on behalf of parties in paragraph (c)(8), and the ban on giving legal advice to the participants in paragraph (c)(6), impose restrictions needed to insure and reinforce the necessary impartiality of the lawyer serving as a dispute resolution neutral.
[11] Paragraph (d) requires that a lawyer serving as a dispute resolution neutral withdraw or seek an appointing court’s permission to withdraw in certain specified circumstances, such as a request by a party to do so or the lawyer’s reasonable belief that the lawyer’s service will not be fruitful.
[12] Paragraph (e) establishes a lawyer’s duties toward participants in a dispute resolution proceeding upon the termination of the lawyer’s service as a neutral for any reason, whether because a settlement is achieved or because a party requests the lawyer’s withdrawal. Given the impartial role of a dispute resolution neutral, it is inappropriate for a lawyer who had served as a dispute resolution neutral to later represent any of the parties to the dispute in connection with the subject matter of that dispute resolution proceeding. This disqualification, however, does not extend to other lawyers associated in a law firm with the dispute resolution neutral. If, however, the parties have successfully resolved their dispute, paragraph (e)(1) permits the lawyer-neutral to draft the agreement settling their dispute, but this must be done in conformity with RPCs 1.2(c) and 2.2 and only with informed consent.
[13] Further, paragraph (e)(2) provides that, even though the participants to a concluded dispute resolution proceeding were not the clients of the lawyer who served as a dispute resolution neutral in that proceeding, these participants are nevertheless entitled to the protections relating to confidentiality and conflicts of interest afforded by RPCs 1.6, 1.8(b), and 1.9 as if they were former clients.
Definitional Cross-References
“Confirmed in writing” See RPC 1.0(b)
“Firm” See RPC 1.0(c)
“Informed consent” See RPC 1.0(e)
“Materially” See RPC 1.0(o)
“Reasonable” and “reasonably” See RPC 1.0(h)
“Reasonably believes” See RPC 1.0(i).
