NEUTRALITY IN MEDIATION: NEEDED, IS BOTH THE PERCEPTION AND THE REALITY
At the heart of mediation is independence, nonpartisan and neutrality. We examine other attempts at independence to realize how challenging being, and being viewed as independent is for a mediator dispute resolver.
Many have wondered how the President of the United States can fire a U.S. Attorney like Jeff Berman, Southern District of New York when this attorney is investigating the Trump administration. Common sense would indicate that this is a conflict of interest. Legally, although the law is a bit unsettled, it seems possible and legal.
This provokes an overall discussion of independence, impartiality and neutrality in the legal system. Part one of the discussion is U.S. Attorneys and Part 6, Mediation and Arbitration.
(Breaking news on Independence of the CFPB. On June 29, 2020, the United States Supreme Court issued its opinion on the Consumer Financial Protection Board (CFPB) The majority did not strike the creation of the board but the one director configuration violates the separation of power basically stating that the Director was too independent. The CFPB was a brainchild of Senator Elizabeth Warren creating the independent body in reaction to the past financial crisis. It was passed by Congress as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, 2010)
Part 1: U.S. Attorneys
US Attorneys love to declare their independence, but…
When people declare their independence, one must ask some basic questions:
-Who Hires and fires?
-Who pays the salary?
US Federal Attorneys are appointed by the President and confirmed by the Senate. If there is a vacancy, the Attorney General (AG) can appoint someone for up to 120 days. When that time period expires, the federal bench can appoint a person who will serve until that position is filled. This is how Jeff Berman got the seat, by federal judicial appointment. The law seems to be unclear as to whether the AG could fire but is clearer that the President can.*
U.S. Attorneys are part of the U.S. Department of Justice so administratively they report to the AG.*
Part 2: Federal Inspectors General: The same independence issue comes about with federal inspector generals-are they really independent? “Statutory inspectors general (IGs) are intended to be independent, nonpartisan officials who prevent and detect waste, fraud, abuse, and mismanagement within federal departments and agencies”** “ IGS serve a very unique role in bridging the executive branch and the congressional branch in our government, because they are required by statute to report to the agency to which they’re assigned and to Congress.”**
There are about 74. About ½ are selected by the President and need confirmation. If they get Senate confirmation. The other ½ are appointed by the President. It is odd system since they are supposed to be independent investigators of certain federal agencies, but the President believes that he can fire any of them.
Part 3: US Special Prosecutors or Counsels: Independence is surely an issue with these folks. Special Counsels are appointed in unique cases where there might be a conflict of interest with the USDOJ (Department of Justice). An AG usually appoints the Special Counsel, but either the AG or the President can fire.
Here is a twist: During Clinton administration, AG Reno appointed Robert Fiske as special prosecutor. He came back with no evidence of wrong doing. Republicans were dissatisfied and beseeched the US Circuit Court to appoint another one and they did, Kenneth Starr.***
Part 4: Federal Judges including SCOTUS: Independence is a clear reason why judges are appointed for life (with a few cases of impeachment/removal).
State and local judges: This is why there is such a struggle to determine whether these judges should be elected or selected. Some states like California have a combination. The judge is appointed and then stands for election. Most of these judges list themselves as nonpartisan but research will reveal that they have a political background either Republican or Democratic. These appointments usually reflect the political party of the appointers.
Part 5: Independent FBI Director? From the FBI’s (Federal Bureau of Investigation) inception 108 years ago, most wanted the director to be independent, impartial and neutral. J. Edgar Hoover’s ruthless independent 48 year reign demonstrated the folly of complete independence. So Congress tried to ensure the independence by passing a 1968 law giving the director a 10 year term that could be renewed with Senate approval. (Hence the reappointment of Robert S. Mueller for a second, 2 year term.)
Many believe that the President could only fire the director “for cause” but the majority view is that since the director falls within the Executive Branch, the director is an “at will” employee. And so there was the firing in May, 2017 of James P. Comey, a Republican who was appointed by President Obama. Comey attempted to show his independence by issuing statements on Hillary Clinton’s email without consulting with the Attorney General or Congress.****
Part 6: Independence, neutrality, impartiality-Mediation/Arbitration:
So, it is clear from the five examples above that independence is greatly challenging, maybe close to impossible.
Impartiality and neutrality are essential in mediation and arbitration as well as other dispute resolution processes such as Early Neutral Evaluation (ENE), Summary Jury Trials (SJT). It is so challenging. There are so many corporations and nonprofits who send their employment disputes to mediation. Who are the mediators? They are employees of the HR (Human Resources )Department. So the questions must be asked again,
-Who can hire and fire them?
-Who pays them?
How can HR mediators possibly be neutral when there is a management/supervisee dispute?
Mediation and Arbitration:
So, the bedrock of effective mediation and arbitration is neutrality and impartiality. How is that being achieved?
Example: One Nonprofit Mediation Program: This is a unique program. This nonprofit has a unique culture., so unique that they do not believe an effective mediation can be conducted unless knowledge of the culture is included. Thus, in their co-mediation team model: one is from their HR Department and the second co-mediator is an outside mediator. This program is consider to be mildly successful.
Based on mediation evaluations, mediation participants scored the inside mediators 60% in re being impartial; the outside mediators score, 95%. This nonprofit realizes the incongruency of this but they still believe knowledge of the culture during mediation is vital even if neutrality suffers.
Evaluations probably measure the perception of neutrality more than the reality of it.
BBB (Better Business Bureau) mediation/arbitration program: What about the BBB’s program? First, who funds the BBB? Their members, businesses. Who funds the mediators? The mediators are generally volunteers. Who selects the mediators to be trained? BBB. Who trains the mediators? BBB. Who appoints the mediators? BBB. It is clear there is a neutrality issue here. At the same time, because they are volunteers, there is the neutrality perception.
“BBB is a nonprofit organization supported by local businesses. It is dedicated to promoting and fostering the highest ethical relationship between businesses and the public through consumer and business education and voluntary self-regulation.
Your BBB assists in the resolution of disputes between a business and its customers. BBBs have a national reputation for fairness because they remain neutral in a dispute. They do not take sides with either party and work to get the problem settled as quickly as possible.”****
The Federal Trade Commission (FTC) has conducted audits of the BBB mediation and has determined it to be “fair.” But, in 2018, the BBB and FTC joined a partnership to combat small business scams. This is great but how is this independent?
Columbus, Ohio, Night Prosecutor’s Mediation Program: Initially funded by the U.S. Department of Justice this program is known as one of the first criminal mediation programs in the nation. It was considered to be successful with a 90% settlement rate.
In the 1980’s dispute resolution advocated throughout the nation questioned the neutrality of such a program when it was located with the Prosecutor’s Office.
Locally neutrality was not questioned, maybe for two reasons. One is that both the prosecutor and the defense generally had the same goal of resolving these disputes which the program did efficiently and effectively. Second although the program worked out of the prosecutor’s office, the Columbus, Ohio, City Council actually provided the funds. The Prosecutor then via a contract paid these funds to Capital University Law School. They then used law and social work students to work in this program. Locally, this program was then neutral in implementation and neutral in perception by the defense and prosecution.
FINRA: FINRA’s mediation and arbitration program is an excellent example of capturing the reality and the perception of neutrality.
“In the United States, the Financial Industry Regulatory Authority, Inc. (FINRA) is a private corporation that acts as a self-regulatory organization (SRO). FINRA is the successor to the National Association of Securities Dealers, Inc. (NASD) and the member regulation, enforcement, and arbitration operations of the New York Stock Exchange. It is a non-governmental organization that regulates member brokerage firms and exchange markets. The government agency which acts as the ultimate regulator of the securities industry, including FINRA, is the Securities and Exchange Commission.”*****
FINRA operates the largest arbitration forum in the United States for the resolution of disputes between customers and member firms, as well as between brokerage firm employees and their firms. (This function had been performed by both NASD and NYSE's regulation committee until their merger in 2007 to form FINRA. Each entity had its own set of rules on arbitration procedures.
FINRA has a roster of approximately 3,000 industry related panelists and 4,000, nonindustry panelists (public). Parties can choose a 3 member panel of all public arbitrators
Statistics show that about 48% of the complainants “win” meaning they get some monies. Most of the cases settle before that actual full arbitration.
This financial regulatory body is independent and has a neutral roster of mediators and arbitrators. Each side is given a list and then they can strike 3 out of 10. This seems fairly neutral.
CONCLUSION: There is a wide consensus that neutrality, independence and impartiality are vital to many dispute resolution processes ranging from mediation, arbitration to ENE and SJT. The above Parts 1-5 describe how challenging this is. FINRA might be a model as to how to achieve both the perception and the reality of independence.