Do You Need Pro Hac Vice Admission to Represent a Client in Mediation?

In In re Anne Elder Kershaw, No. 2018-031 (S.V.I), the Supreme Court of the Virgin Islands affirmed the denial of a motion for pro hac vice admission based on the following facts. The non-Virgin Islands counsel in question filed a motion in the trial court to be admitted pro hac vice that was granted, but subject to the attorney taking a required oath. After the motion was granted, but before the attorney took the oath, she represented her client at a mediation in the Virgin Islands. The Court not only vacated the prior order granting the pro hac vice motion, it also referred the matter to disciplinary authorities, ruling that pro hac vice admission was required for any “practice of law” in the Virgin Islands, and that representing a client in mediation in the Virgin Islands, even in a private mediation, constituted the practice of law. Since the attorney had not yet taken the oath, the attorney was not yet admitted and therefore violated the local rules of ethics by participating in the mediation.

Lest you think this a quirk of Virgin Island law, cases from many other states are cited:

See In re Roswold, 249 P.3d 1199, 1208 (Kan. 2011) (“Without admission pro hac vice, out-of-state attorneys appearing in Kansas courts, or actively participating in pretrial proceedings such as depositions or mediations, would be engaged in the unauthorized practice of law in this state.”); In re Dox, 152 P.3d 1183, 1187 (Ariz. 2007) (attorney not admitted in the state engaged in the unauthorized practice of law by representing a party in a private mediation in that state); In re UPL Advisory Opinion 2003-1, 623 S.E.2d 464, 464-65 (Ga. 2005) (representing a client in settlement discussions is the practice of law); Cincinnati Bar Association v. Telford, 707 N.E.2d 462 (Ohio 1999) (same).

Guided Choice Dispute Resolution – A New Approach That Might Boost A Mediation’s Chances Of Success

The earlier a case can be settled the better. But what is the right moment to attempt a mediation?  While it is good to try to mediate as early as possible, some mediations fail because the parties find out they were not yet ready to have a meaningful settlement discussion.

Guided Choice is a process where the parties retain a mediator early in a dispute, but, at least initially, not to conduct a settlement discussion. Rather, after confidential conferences with each side, the mediator makes a determination as to whether the case is ripe for a settlement discussion. If not, the mediator determines what issues preclude having a productive settlement discussion, and proposes a procedure designed to get the parties to the right point as quickly as possible. This could involve getting certain discovery done up front, presenting a motion on a key issue to a judge or arbitrator, getting other parties involved, or having one or both sides prepare expert reports on damages. Once those tasks have been completed, a mediated settlement discussion can take place.

Think you can decide for yourself when mediation is appropriate? Probably. Would having a neutral involved be useful? Probably. If you would like more information on this cutting-edge ADR process, give me a call or take a look at this web site:

Making Sure Your Mediation Settlement Is Binding

It is not uncommon in a complex case for the parties to reach a settlement during a mediation, reflected in a written, signed, settlement term sheet, but also intend to later draft and sign a more formal and comprehensive document. The law is clear that if the agreement reached during the mediation includes all the “material” terms, the settlement is binding, even if the parties intend to execute a more formal document. I have nonetheless always included language in mediation settlement agreements specifically stating that the document is intended to be binding, even though the parties intend to later execute a formal settlement agreement.

A court in California recently cited just such language in rejecting a challenge to a mediation settlement, Mullahey v. Feldman (Cal. App., 2018):

“Parties agree to be bound by the terms set forth herein, and agree that the terms shall be further reduced to writing in a more comprehensive and complete settlement agreement to be executed at a later date, but such further agreements shall not detract from or impair the enforceability of this Agreement.” The parties’ stated intent to enter into a more formal agreement at a later date does not preclude enforcement of the mediation agreement.

Language this this effect cannot make a truly unenforceable agreement (i.e. one lacking a material term) enforceable, but such language may well give that last needed push to get a court to enforce a settlement agreement in a close case.

An Interesting Mediation Clause

In Hughes Socol Piers Resnick & Dym, Ltd. V. G3 Analytics, LLC, No. 18 C 2114 (N.D. Ill. Aug. 28, 2018), Judge Aspen affirmed an arbitration award where the parties’ contract contained the following alternative dispute resolution clause:

Any disputes relating to this Agreement . . . will be resolved by alternate dispute resolution. Alternative dispute resolution means that you and our Law Firms agree to submit all disputes to an independent mediator mutually agreed upon. . . .

In the event the parties are unable to resolve their disputes through mediation, the parties agree that the mediator shall require the parties to submit their disputes to an independent arbitrator selected by the mediator. The mediator will have the right to appoint himself as arbitrator in that proceeding. The parties shall be bound by the decision of the arbitrator and such decision shall be final and not subject to review except as to the issue of malfeasance or bias on the part of the arbitrator. (emphasis added)

The interesting part is the power given to the mediator to appoint an arbitrator, and even to appoint him or herself to this role. Having the mediator appoint the arbitrator would seem both wise and non-controversial as it would save the parties the hassle of going back and forth on lists of potential arbitrators. Giving the mediator the power to appoint him or herself as the arbitrator, however, while it would likely provide some additional incentive to settle during the mediation, might also cause the parties to be less candid with the mediator during the mediation, making a settlement more difficult. A most interesting and creative ADR clause!

Litigation Arising Out of Mediation

It’s unfortunate, but not surprising, and definitely ironic, that with the increased use of mediation, people will sue for conduct that occurred during a mediation. One recent example is Doe v. JAMS Inc., (2nd Cir. 2018), in which a partner in a prominent New York law firm sued for discrimination and retaliation and included an allegation that conduct by a representative of the defendant law firm during a mediation session constituted unlawful retaliation. Another recent example is Dauber v. Fargey, (D.Or. 2018), in which the plaintiff attended a mediation that failed, fired her lawyer, attended a second mediation with a new lawyer that succeeded, and then sued the first lawyer for malpractice, alleging that his failure to properly prepare for the first mediation caused unnecessary delay and expense in resolving her claim.

Both of these cases, however, illustrate the difficulty in bringing claims based on conduct in mediation, which is probably a good thing. Both decisions concern discovery disputes where the defendant asserted, with some success, that documents sought by the plaintiff were protected by the mediation privilege, which exists by statute in Illinois and most states. While the mediation privilege has limitations, it can often be a significant obstacle to presenting evidence of misconduct that allegedly took place in a mediation.