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Should the States Certify and Regulate Mediators?

July 30th, 2009 Mediation, Reinsurance Mediation 4 Comments » By Philip J. Loree Jr.

One of the reasons we enjoy reading the Mediation Channel so much is that Diane Levin’s posts are designed to make you think.  In her recent post, “To Certify or Not to Certify:  That is the Question as the Mediation Field Struggles with Professionalization,” she discussed a number of arguments for and against state licensing and regulation of mediators.  (A copy of the post is here.)   I found this post to be particularly thought provoking. 

From what I have heard (and I am not a mediator) state regulation of mediators is a controversial subject.  And it should be. 

Mediation is a highly competitive field.  Victoria Pynchon, blogmaster of the highly-regarded Settle it Now Negotiation Blog, recently posted an interesting piece about whether ADR is a rescession-proof industry, which is available here.  One thing she said really stuck in my head:  “[l]et me give a word to the wise:  [a mediation practice is] .  .  .  70% marketing and 30% paying work during a good year.”  I am willing to wager that building such a practice is 110% marketing and 0% working for paying clients.  Let’s face it, making a living as a mediator is no walk in the park.

Apparently, some mediators believe that their ability to obtain new business would be enhanced by state regulation of mediation.  It is tempting  to believe that one’s own ability to attract potential clients would be aided if the state put its imprimatur on your practice.  It is also easy to understand why certain mediators may believe that state certification will materially decrease the number of competitors in the local market for mediation services.   And perhaps state certification, and the attendant power of the state to enforce through discipline a code of ethics for mediators, might lend some comfort to consumers of mediation services that the selected mediator will not engage in some sort of unspecified misconduct and will not be entangled in conflicts of interest. 

We do not believe that state regulation of mediation will be the boon to business that some mediators apparently think it could be.  First, we do not believe that a state license to mediate would be a meaningful marketing tool.  It may be that, if state certification is enacted, the mediators who are able to get certified first may get more clients while everyone else scrambles to get certified.  In time, however, everyone will be certified and state certification will be no more of marketing tool than bar admission is for lawyers.  

Second, we do not believe that licensing will materially decrease the competition pool, at least as far as local business is concerned.  We suppose that proponents could argue that only “serious” mediators will get certified, and that competition will be limited to a pool consisting of such mediators.  That may well be true, but it is beside the point:  we would be surprised if the business-getting ability of serious mediators has ever been threatened by the not-so-serious, so removing the not-so-serious from the competition pool is not going to affect competition much.

Third, we do not believe that a significant number of potential consumers of mediation services are shying away from mediation because they fear that unlicensed mediators are likely to engage in unethical or improper conduct.  Certainly, mediations are confidential affairs and it may be difficult to assess whether improper conduct on the part of mediators is a significant risk.  We have not seen too much written about actual or alleged misconduct on the part of mediators, and we certainly do not perceive much concern that significant numbers of mediators are engaging in improper or unethical conduct, at least in commercial and industry mediation.  

There are already in place some market checks against such misconduct.  Reputation is an important factor in selecting a mediator, and those who engage in unethical conduct take a very serious risk that their reputations may be sullied, thereby diminishing their ability to obtain future business.   The presence of a disciplinary system for mediators arguably might increase public confidence in mediators, but we do not see sufficient evidence that public confidence is lacking, let alone evidence that unethical or improper conduct is a widespread problem in commercial and industry mediation. 

There is a caveat here:  it may be that certain court-sponsored or court-ordered mediation may be conducted by persons who do not have the requisite skills to help the parties, and we suppose participants in such programs could suffer harm as a result.  Ms. Pynchon has indicated that this is a real problem in her home state, especially as respects small claims matters and civil harassment disputes.  (See post here.)  Problems like these are within the power of the courts to address, and address them they should. 

Apart from the debate over whether mediator licensing would enable mediators to obtain more business, we believe that state regulation would, if anything, impair the ability of the better  mediators to compete for  business.   If a significant number of states — particularly contiguous ones — start imposing certification requirements, balkanization will result, and the geographic market in which each mediator can compete will shrink.  The flip side of state regulation is that states will likely exclude unlicensed mediators from mediating disputes within the state or perhaps from mediating in any state a dispute pending in the court of the certifying state or to be heard before an arbitration panel in that state.  Just as certain states have imposed residency or in-state office maintenance requirements on attorneys as a condition of admission to the bar, so too might some or all states impose similar requirements on mediators. 

Suppose New York and Massachusetts both decide to regulate and certify mediators,  impose a residency or office maintenance requirement on certified mediators, and require that mediators must be certified to mediate cases that are pending in their home courts or are to be heard by arbitrators within the state.  Suppose that parties to a litigation pending in Massachusetts want to hire a well-known and highly-regarded mediator that is certified to mediate in New York, but not Massachusetts.  The parties will not be able to use the mediator of their choice  and the preferred mediator  will not get the business unless the parties are willing to pay for the added cost of also having a state-certified mediator present at the mediation. 

The customer and the better mediators would suffer as a result.  The effective geographic market of every mediator would be reduced, and the better  mediators who, in the absence of regulation would be able to compete freely in a national market, would find their ability to compete hampered by the need to hire “local mediators.”  The real loser would be the customer, who would  have to pay two mediators to obtain the one mediator it really wants.  The winners would be the mediocre mediators, whose competition would be reduced to in-state mediators and who would benefit from having additional, “local mediator” assignments when an out-of-state mediator is called in.

These are not the only issues raised by the spectre of state regulation of mediation, and we may return to the subject in a future post….

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4 Responses to “Should the States Certify and Regulate Mediators?”

  1. Diane Levin says:

    Phil, I hope you’ll forgive my delay in acknowledging this post. I’ve been away on vacation and have only just returned.

    Thanks for your kind words, first of all. You do me a great honor, and I’m pleased to know that you have found my posts useful. Secondly, thanks for taking this discussion to a higher level and for presenting such well-reasoned objections to initiatives to credential mediators. I am particularly concerned about the limits on multi-state practice that jurisdictional restrictions on the practice of mediation could give rise to. I’d hate to see the day when mediators could be prosecuted for the unauthorized practice of mediation. If we’re not careful, that day might come.

    Thanks again, Phil.

  2. Diane,

    Thanks so much for your kind words!

    I am not sure that proponents of state regulation of mediators have given much thought to the multi-jurisdictional practice issue. I suppose the assumption is that most or all states will simply grant reciprocity to one another, but the history state regulatory regimes suggests otherwise.

    The result will be that highly-skilled mediators (like you) will find it much more difficult to maintain a national practice.


  3. […] The hot-button issue of mediator credentialing and credentialing seems to be on the minds of many folks in the ADR field these days. It has generated discussion, here and on other blogs (including Tammy Lenski’s, Vickie Pynchon’s and Philip Loree’s). […]

  4. […] worldwide ADR blogs,  Diane is a very talented writer, and as we have said before (here), her posts really make you think.  She’s been blogging for a number of years now, and she’s […]