State ADR: New Jersey Beefs Up ADR Practice Requirements for Out-of-State Attorneys (Web)

This month, New Jersey has issued two bar notices of importance to ADR practitioners.

The first is a Supreme Court Committee opinion that modifies the state’s rules on how out-of-state attorneys may represent their clients in alternative dispute resolution settings. It almost certainly means more paperwork will be needed before out-of-state attorneys take on an ADR matter in the state, and may require registration steps before representation in private matters, including mediation.

The second concerns a proposal that would establish a more formal review process for complaints against mediators. It would include a central complaint registry.

Opinion 43, “Out-of-State Attorney Representing Party Before Panel of the American Arbitration Association in New Jersey,” which the N.J. Supreme Court Committee on the Unauthorized Practice of Law issued on Jan. 4, 2007, requires out-of-state attorneys seeking to practice in ADR settings in New Jersey to comply with all requirements of Rule of Professional Conduct 5.5, or otherwise risk engaging in the unauthorized practice of law. The opinion is available at http://www.judiciary.state.nj.us/notices/ethics/UPLC_Opinion43supplementingop28.pdf

The opinion supplements Opinion 28, which the Court committed issued in 1994. The older opinion provided that an out-of-state attorney may represent a party in an American Arbitration Association proceeding in New Jersey if no complaint had been filed in New Jersey on the issue, and if the attorney was admitted and in good standing in another U.S. jurisdiction.

Opinion 28 hasn’t been changed, according to the new opinion. But in the Court committee’s view, the 2004 adoption of a new Rule 5.5 altered a customary judicial deference to out-of-state ADR representatives as creatures of contract. The committee issued Opinion 43 to incorporate new prerequisites it says are now required by Rule 5.5.

Rule 5.5 provides the rules for out-of-state attorneys who are not admitted to engage in the practice of law in New Jersey, including, among others, pro hace vice requirements, and special requirements for in-house counsel.

Rule 5.5(b)(3) also allows in-state practice for nonadmitted attorneys under the following ADR-related provisions:

(i) the lawyer engages in the negotiation of the terms of a transaction in furtherance of the lawyer’s representation on behalf of an existing client in a jurisdiction in which the lawyer is admitted to practice and the transaction originates in or is otherwise related to a jurisdiction in which the lawyer is admitted to practice;

(ii) the lawyer engages in representation of a party to a dispute by participating in arbitration, mediation or other alternate or complementary dispute resolution program, the representation is on behalf of an existing client in a jurisdiction in which the lawyer is admitted to practice, and the dispute originates in or is otherwise related to a jurisdiction in which the lawyer is admitted to practice . . .

New Jersey courts use the term “complementary dispute resolution” instead of ADR.

The new Opinion 43 addresses Rule 5.5's multi-jurisdictional practice issues by noting that it supplements to original opinion. But it also eliminates the 1994 opinion requirement that there be no related action pending in the attorney’s state of admission.

Moreover, the additional requirements make Rule 5.5 arguably reach beyond courtroom matters, potentially applying ADR representation restrictions to private matters–including mediation.

Specifically, the new opinion adds additional Rule 5.5(c)(1) through (6) requirements to Opinion 28. Now, once qualified under one of the categories in Rule 5.5(b), the lawyer must then satisfy the six criteria set forth in RPC 5.5(c):

(1)be licensed and in good standing in all jurisdictions of admission and not be the subject of any pending disciplinary proceedings, nor a current or pending license suspension or disbarment;

(2)be subject to the Rules of Professional Conduct and the disciplinary authority of the Supreme Court of this jurisdiction;

(3)consent to the appointment of the Clerk of the Supreme Court as agent upon whom service of process may be made for all actions against the lawyer or the lawyer's firm that may arise out of the lawyer's participation in legal matters in this jurisdiction;

(4)not hold himself or herself out as being admitted to practice in this jurisdiction;

(5)maintain a bone fide office in conformance with R. 1:21-1(a), except that, when admitted pro hac vice, the lawyer may maintain the bona fide office within the bona fide law office of the associated New Jersey attorney pursuant to R. 1:21-2(a)(1)(B); and

(6)annually complies with R. 1:20-1(b) and (c) [Annual Fee and Registration], R. 1:28-2 [payment to Lawyers' Fund for Client Protection], and R. 1:28B-1(e) [payment to Lawyers Assistance Program] during the period of practice.

The opinion extends to mediation. The Court committee, according to the opinion, “finds that [representing an existing out-of-state client in mediation] is akin to arbitration and that an out-of-state attorney may participate in mediation and may prepare an order for the court reflecting a memorandum of understanding/agreement reached in mediation, provided that the out-of-state attorney has satisfied the requirements of RPC 5.5.”

Finally, with respect to the recovery of attorney fees, the committee determined that provided the out-of-state attorney has complied with the Rule 5.5 requirements, the attorney may collect fees for arbitration or mediation matters “pursuant to the rules of the dispute resolution forum,” the opinion states, and any applicable New Jersey statutes and court rules governing the recovery of attorney fees.

In recognition of the inherent challenges of monitoring the new requirements of Opinion 43 and Rule 5.5, the committee also recommended that “the AAA and other alternate [sic] dispute resolution forums require, as part of the initial filing process, that out-of-state attorneys seeking to practice in New Jersey under the multi-jurisdictional practice rule be required to submit proof of compliance with Rule 5.5, particularly proof that they have registered with the Clerk of the Supreme Court and have paid the required fees.”

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On Jan. 8, the New Jersey Administrative Office of the Courts published a proposal for a formal review process for complaints against civil and family court mediators by the Supreme Court’s Advisory Committee on Mediator Standards.

The purpose of publishing the notice, which is available at http://www.judiciary.state.nj.us/notices/2007/n070108a.pdf, is to solicit comments. The comment period is open until Feb. 23. Details are available at the state site.

The AOC would collect the complaints under the proposal. It provides for an informal resolution procedure, literally: The AOC manager would forward the complaint to the mediator and the advisory committee’s chairman and members. After committee review, the manager or a committee member “will seek to resolve the complaint informally unless the Committee determines otherwise.”

If the dispute can’t be resolved with informal talks, the committee under the proposal would determine the course of action, which may include asking the mediator to file a written response to be given to the complainant; requesting more information from the complainant, the mediator or other parties, or determining that the complaint requires no further action. Or, “on review of the papers,” the committee may decide that “no further action shall be taken or that action should be taken against the mediator.”

The proposal would allow the committee to require the mediator to attend additional training; observe other mediators; or be mentored by other mediators currently on the roster. The committee also would be empowered to determine that the mediator should not conduct any mediation until the completion of the remedial actions it requires.

The committee also could remove the mediator from the court roster under the proposal, or ban the mediator from providing court mediation services.

The mediator would have an appeals process under the committee’s proposal, under which a local appellate panel appointed by an assignment judge or designee where the grievance originated would make a final determination on a banned mediator’s gate.

–Russ Bleemer, Editor, Alternatives, and Lauren A Gray, CPR Intern