Current through Register Vol. 39, No. 6, September 16, 2024
(a) A
lawyer serves as a third-party neutral when the lawyer assists two or more
persons who are not clients of the lawyer to reach a resolution of a dispute or
other matter that has arisen between them. Service as a third-party neutral may
include service as an arbitrator, a mediator or in such other capacity as will
enable the lawyer to assist the parties to resolve the matter.
(b) A lawyer serving as a third-party neutral
shall inform unrepresented parties that the lawyer is not representing them.
When the lawyer knows or reasonably should know that a party does not
understand the lawyer's role in the matter, the lawyer shall explain the
difference between the lawyer's role as a third-party neutral and a lawyer's
role as one who represents a client.
Comment
[1]
Alternative dispute resolution has become a substantial part of the civil
justice system. Aside from representing clients in dispute-resolution
processes, lawyers often serve as third-party neutrals. A third-party neutral
is a person, such as a mediator, arbitrator, conciliator or evaluator, who
assists the parties, represented or unrepresented, in the resolution of a
dispute or in the arrangement of a transaction. Whether a third-party neutral
serves primarily as a facilitator, evaluator or decisionmaker depends on the
particular process that is either selected by the parties or mandated by a
court.
[2] The role of a
third-party neutral is not unique to lawyers, although, in some court-connected
contexts, only lawyers are allowed to serve in this role or to handle certain
types of cases. In performing this role, the lawyer may be subject to court
rules or other law that apply either to third-party neutrals generally or to
lawyers serving as third-party neutrals. Lawyer-neutrals may also be subject to
various codes of ethics, such as the Rules of the North Carolina Supreme Court
for the Dispute Resolution Commission and the North Carolina Canons of Ethics
for Arbitrators.
[3] Unlike
nonlawyers who serve as third-party neutrals, lawyers serving in this role may
experience unique problems as a result of differences between the role of a
third-party neutral and a lawyer's service as a client representative. The
potential for confusion is significant when the parties are unrepresented in
the process. Thus, paragraph (b) requires a lawyer-neutral to inform
unrepresented parties that the lawyer is not representing them. For some
parties, particularly parties who frequently use dispute-resolution processes,
this information will be sufficient. For others, particularly those who are
using the process for the first time, more information will be required. Where
appropriate, the lawyer should inform unrepresented parties of the important
differences between the lawyer's role as third-party neutral and a lawyer's
role as a client representative, including the inapplicability of the
attorney-client evidentiary privilege. The extent of disclosure required under
this paragraph will depend on the particular parties involved and the subject
matter of the proceeding, as well as the particular features of the
dispute-resolution process selected.
[4] A lawyer who serves as a third-party
neutral subsequently may be asked to serve as a lawyer representing a client in
the same matter. The conflicts of interest that arise for both the individual
lawyer and the lawyer's law firm are addressed in Rule 1.12.
[5] Lawyers who represent clients in
alternative dispute-resolution processes are governed by the Rules of
Professional Conduct. When the dispute-resolution process takes place before a
tribunal, as in binding arbitration (see Rule 1.0(n)), the
lawyer's duty of candor is governed by Rule 3.3. Otherwise, the lawyer's duty
of candor toward both the third-party neutral and other parties is governed by
Rule 4.1.
