May 7, 1996
A lawyer may establish a nonlaw business offering alternate dispute resolution services, train lawyer and nonlawyer staff to be arbitrators and mediators in the business, establish rules governing the proceedings, and charge participants for costs and expenses incurred and for the presiding officials.
A lawyer may, as a condition of using the nonlaw business services, require participants to release the presiding officials and staff from all liability arising from the exercise of their duties.
References: MRPC 1.8(h)(1), RI-2, RI-88, RI-196, RI-256.
A lawyer proposes to establish a nonlaw business offering alternate dispute resolution [ADR] services. The lawyer will train lawyer and nonlawyer staff to be arbitrators and mediators, will establish a set of rules governing the proceedings, and will charge the participants for costs and expenses incurred and a daily charge for the presiding officials. The lawyer asks whether, as a condition of using the nonlaw business services, the participants may be asked to release the ADR presiding officials and ADR staff from all liability arising from the exercise of their ADR duties.
MRPC 1.8(h)(1) states:
In RI-88 this Committee opined that a lawyer may not offer or make and agreement restricting a party or counsel for a party from bringing information concerning a lawyer's ethical misconduct to the attention of the Attorney Grievance Commission. In RI-2 and RI-196 this Committee rendered opinions on the propriety of fee agreements containing arbitration clauses requiring arbitration in compliance with MCL 600.5001, of any and all claims or disputes arising out of the lawyer's representation.
The instant inquiry is clearly distinguishable. First, the proposed agreement relates to the prospective limitation of liability stemming from the ADR process itself. Secondly, unlike the prior inquiries, there is no identifiable client-lawyer relationship. MRPC 1.8(h)(1) conditions agreements prospectively limiting the lawyer's liability to a client for malpractice. Whether a client-lawyer relationship exists for any specific purpose depends on the circumstances and may be a question of fact. Traditionally, the process of arbitration or mediation is presided over by neutral arbitrator(s) or mediator(s). A neutral arbitrator or mediator, by definition, has no client with respect to the matter being arbitrated or mediated. In accord RI-256. The facts, as set forth in the instant inquiry, fail to establish a client-lawyer relationship between the ADR presiding officials or staff, and any prospective participants. Consequently, there is no ethical prohibition preventing the lawyer from, as a condition of using the ADR services, asking the participants to release the ADR presiding officials and ADR staff from all liability arising from the exercise of their ADR duties.