When a lawyer is being considered to sit on an arbitration panel, what disclosures do the ethics rules require about contacts with the parties, counsel, or witnesses?

Plain-English summary

The Committee was asked what disclosures the ethics rules require when a lawyer is under consideration to sit on a three-member arbitration panel (two arbitrators chosen by the parties, the third by the two nominees), including professional, business, family, or social contacts with parties, principals, counsel, and witnesses, and when those disclosures must be made.

The opinion concluded that the Michigan Rules of Professional Conduct do not dictate an arbitrator's duties, whether the arbitrator is a lawyer or not, because a lawyer serving as an arbitrator has no clients among the participants. It distinguished MRPC 2.2 (lawyer as intermediary among multiple clients) as a tempting but false analogy, since an intermediary serves all the clients, is not the decision-maker, and may be discharged at will, whereas an arbitrator does not share confidences and renders decisions disadvantageous to one side, so client-loyalty duties are neither expected nor required. The opinion observed that ethics rules govern lawyers' conduct as lawyers and do not regulate outside activities except where incidental to or likely to affect professional duties; it cautioned generally about opining on ADR providers' duties (RI-188). As to disclosures to participants, the opinion concluded none are required by the Michigan rules.

The opinion added that this does not fully dispose of the question, because the lawyer's other legal work carries obligations under the rules. A lawyer may not undertake an outside activity if doing so would breach professional duties; MRPC 1.7(b) applies regardless of whether a conflict's source is professional, reaching the lawyer's own interests or nonprofessional duties to third parties such as arbitration parties, because the rule addresses the effect on professional duties, not the source of the conflict. The opinion therefore concluded the lawyer may accept the appointment if it will not place the lawyer in default of an existing ethical obligation, which may require preliminary inquiry into the identities of the participants and the nature of the matter, an assessment of the impact on the lawyer's professional relationships, and in some cases disclosure to and consent of a client. Those duties arise out of the lawyer's work other than as arbitrator; the participants must look to sources other than the Michigan rules for the arbitrator's duties to them.

Currency note

This opinion was issued in 1996, before later amendments to the Michigan Rules of Professional Conduct. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Must a lawyer disclose contacts with the parties to the arbitration participants?

A: No. The opinion concluded the Michigan Rules of Professional Conduct require no disclosure to the arbitration participants.

Q: What does the lawyer have to do, then?

A: The opinion concluded the lawyer must inquire enough into the participants and the matter to determine whether serving would breach the lawyer's own existing professional obligations, and handle any conflict under the rules.

Q: Can a conflict arise even from nonprofessional connections?

A: Yes. The opinion concluded MRPC 1.7(b) applies regardless of the source of the conflict, reaching the lawyer's own interests or nonprofessional duties, because the rule addresses the effect on the lawyer's professional duties.

Q: Might the lawyer have to consult a client before serving?

A: Yes. The opinion concluded that, depending on the circumstances, accepting the appointment may require disclosure to and consent of a client whose matter could be affected.

Background and rules framework

The opinion interpreted MRPC 1.7(b) (Model Rule 1.7), the material-limitation conflict rule, which it concluded applies regardless of whether a conflict's source is professional, and MRPC 2.2 (the former lawyer-as-intermediary rule), which it distinguished because it applies only among clients. The opinion relied on RI-188 on the caution due in opining on ADR providers' duties.

Citations and references

Rules of Professional Conduct:

• MR 1.7 / MRPC 1.7(b) (representation materially limited by the lawyer's own interests or duties to third persons)
• MR 2.2 / MRPC 2.2 (lawyer as intermediary among clients; distinguished)

Other opinions cited:

• Michigan RI-188: caution in opining on the ethical duties of lawyer ADR providers

See also

• Mich Ethics Op. RI-268: no ethics-rule disclosure duty for a lawyer-arbitrator
• Mich Ethics Op. RI-188: file retention for a neutral arbitrator or mediator
• Mich Ethics Op. RI-256: lawyer-neutral dealing with self-represented parties

Source

• Landing page: https://www.michbar.org/opinions/ethics/numbered_opinions?OpinionID=1141&Type=6

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

RI-271

June 19, 1996

SYLLABUS

A lawyer under consideration for selection as an arbitrator on a three-member arbitration panel is ethically required only to conduct such inquiry and make disclosures with regard to the matter and participants as are necessary to ascertain whether ethical constraints are in place as a result of the lawyer's professional activities, and, if so, to deal with them in accordance with ethics rules.

References: MRPC 1.7(b), 2.2; RI-188.

TEXT

The Committee has been asked to address what disclosures are ethically required when a lawyer is under consideration for selection as an arbitrator. The arbitration panel will have three members, all lawyers, two of whom are selected by the parties and the third by the two party nominees. The questions posed are what disclosures must a lawyer make when being considered as a possible arbitrator, e.g., professional, business, family or even social contacts with parties, principals of parties, counsel, witnesses, and the like, and when must required disclosures be made.

Alternate dispute resolution ["ADR"] systems and techniques are evolving and gaining popular acceptance rapidly, with lawyers, courts and the organized bar not always at the forefront. One aspect of this phenomenon is that the profession has begun only recently to devote attention to the differences, as well as the similarities, between the lawyer's traditional role as partisan advocate of a client's interest and that of a decision maker or facilitator for all of the parties in an ADR setting. Much of what has developed piecemeal, through ethics opinions in other state and city bar associations, is either contradictory or severely limited to specific factual settings. Bodies such as the American Arbitration Association or the National Association of Securities Deals, which themselves operate formal organized ADR systems, typically have published their own codes of ethics or rules for arbitrators, to which a lawyer (or anyone) selected to serve becomes subject by agreement. Where no such specific rules exist, the prospect that panels may be composed of both lawyers and nonlawyers gives rise to a concern for uniformity in duties that cannot be totally addressed by ethical constraints applicable only to lawyers. Indeed, it may eventually be concluded that service as an arbitrator or mediator is not necessarily lawyering at all. It is thus with considerable caution that the Committee ventures opinions concerning the ethical duties of lawyers who serve as ADR providers. RI-188.

An examination of the Michigan Rules of Professional Conduct themselves will reveal that a lawyer's duties are directed to clients or, to a lesser extent, tribunals, other lawyers, or the public at large. But the lawyer who serves as an arbitrator has no clients among the participants. By contrast, MRPC 2.2 which applies when a lawyer serves as an intermediary between two or more clients (a temptingly close but false analogy), actually puts the lawyer into an almost reciprocal role, i.e., the lawyer serves all the clients' interests, is not the decision-maker, may not keep information of one client from the another of the clients, and may be discharged at will by any of the participants. See Comment to MRPC 2.2, which confirms that it does not apply when non-clients are parties.

Arbitration proceedings, on the other hand, often contemplate that arbitrators will not share confidences and will render decisions that are disadvantageous to one side or the other, so that fidelity to bedrock ethical duties such as loyalty to a client's cause is neither expected nor required. It will not do to define the arbitrator's duties by reference to rules bearing upon the lawyer-client relationship or a lawyer's role as advocate of a partisan interest.

The Michigan Rules of Professional Conduct do not dictate an arbitrator's duties, whether the arbitrator is a lawyer or not. As long as a lawyer being considered for selection as a member of an arbitration panel can undertake the activity while remaining in compliance with ethical constraints, the lawyer's conduct while serving as an arbitrator is governed by rules other than the Michigan Rules of Professional Conduct. Ethics rules apply to lawyers' conduct as lawyers; they do not regulate a lawyer's outside activities except where they are incidental to or likely will affect the fulfillment of the lawyer's professional duties.

This does not entirely dispose of the question, however, which asks what disclosures must a lawyer make when being considered for selection as a member of an arbitration panel. If the thrust of the question is what disclosures must be made to the arbitration participants, none are required by the Michigan Rules of Professional Conduct.

But a lawyer contemplating service as an arbitrator has a workload of lawyer projects to deal with in addition to the arbitration, and those duties carry obligations that are imposed by the Michigan Rules of Professional Conduct. A lawyer must not do anything outside the practice of law that will cause an ethics violation or problem professionally. A lawyer may not undertake those outside activities if doing so will result in a breach of professional duties. MRPC 1.7(b), for example, applies without regard to whether the source of a conflict situation is professionally related or not. The source of a proscribed conflict need not be a professional duty owed to another client. It may be nonprofessional and may be the lawyer's own interests or nonprofessional duties owed to third parties, such as parties to an arbitration proceeding in which the lawyer is an arbitrator. It is the effect upon the discharge of professional duties that the rule addresses, not the source of any distracting or disabling conflict.

Therefore, a lawyer being considered for selection as an arbitrator may accept the appointment if doing so will not place the lawyer in default of an existing ethical obligation under the Rules. Depending upon the particular circumstances, this will require the lawyer to make preliminary inquiry as to the identities of the participants and the nature of the matter, to assess the potential impact of such service upon the lawyer's professional relationships and engagements, and to proceed accordingly. In some situations, this may require disclosure to, and consent of, a client. Such duties arise out of the lawyer's work other than as an arbitrator. The arbitration participants must look to other sources than Michigan Rules of Professional Conduct for rules applicable to the lawyer/arbitrator's duties to them.