At the request of CALDA President Rob VanSteen, CALDA's advising counsel Richard Lubetzky has provided the following analysis SB940 and its application to LDA's:

You have requested an opinion letter from me as to how newly enacted SB940 will impact LDA' s, and more particularly how the legislation will affect those LDA' s who provide mediation services to the public. In forming my opinion, I have reviewed the legislative history of the bill, including, among other things, the Executive Summary of the bill prepared by the Senate Judiciary Committee, the Synopsis of the bill prepared by the Assembly Committee on Judiciary, the Senate Floor Analysis and the Assembly Floor Analysis, as well as various published commentaries about the bill.

Of particular concern to the association is the provision of the bill, which provides for the establishment of an Alternative Dispute Resolution Certification Program by the State Bar, and which is now codified in Section 6173 of the Business and Professions Code. Section 6173(d)(l) of the Business and Professions Code defines alternative dispute resolution to mean "mediation, arbitration, conciliation, or other nonjudicial procedure that involves a neutral party in the decision making process."  The program is modeled after the State Bar's Legal Specialization Program, which certifies attorneys as specialists in various areas of the law. Both programs are self-funded, and no bar dues are used to support them.

Of particular note, the bill does not require arbitrators or mediators to seek certification under the program. Participation in the program is entirely voluntary, a fact which is confirmed in the Comments section of the Assembly Floor Analysis, and in various published commentaries about the bill. The bill merely requires the State Bar to establish a program and the requirements for participation in it. The bill also provides that non-attorney alternative dispute resolution providers may participate in the program if they wish to do so. Opponents of the bill argued that the certification program would mislead consumers into believing that a certified business is superior to and has more experience than a business that is not certified, when, in fact, under the program, a firm can become certified almost immediately after its creation without ever having to conduct an arbitration or mediation, and before it acquires either competency or experience. The program only requires that participants comply with certain ethical standards and implement a procedure, which would allow consumers to complain about lack of compliance with the standards. Senator Umberg, the bill's sponsor, was quoted in the Daily Journal as stating that it was his hope that the market will eventually push most providers into obtaining and maintaining this certification, as consumers become reluctant to choose uncertified providers.

Therefore, because the program is voluntary, LDA's should be able to continue to provide mediation services to the public as they have been doing and are not required to participate in the program. Of course, if an LDA wishes to participate in the program, they may do so if they meet the requirements of the program.

I am also aware that some members of CALDA have expressed concerns that the establishment of the program is an expansion of the State Bar's attempt to extend their regulation over non-attorneys, such as LDA's. However, it should be noted that the State Bar was not a sponsor of the bill, and it was the Legislature that required the State Bar to establish this program. Also, since the program is voluntary, only those who choose to participate in the program will be subject to State Bar regulation. Nevertheless, CALDA should be careful to monitor any other actions of the Legislature, which could set a precedent for the State Bar to extend direct regulation over non-attorneys.

Respectfully submitted,

Richard Lubetzky