In January of this year, a petition to amend Rules of the Supreme Court was submitted to the Arizona Supreme Court. Included in the petition was a recommendation to revise Rule 31, which addresses mediators.
Pursuant to the petition, the proposed changes would “clarify the status of mediators.” The significant proposed changes included the following: (1) inserting “Serving as a mediator is not the practice of law” in the “mediator” definition; (2) deleting exemptions which allowed courts and professional associations, amongst others, to use mediators without compensation; and (3) inserting verbiage that if a mediator is not an active member of the state bar and that mediator prepares a written mediation agreement resolving the dispute, the mediator must then be either supervised by an attorney or be a certified legal document preparer.
The proposed changes would be detrimental to AAR and its mediation program. Currently, at the end of a successful mediation, volunteer REALTOR® mediation officers assist the parties in memorializing their agreement by filling out a pre-printed mediation agreement, which was drafted by an attorney.
If the proposed changes were adopted and AAR’s mediators continued with their current practice of memorializing settlement agreements, the mediators would be exposed to sanctions for the unauthorized practice of law. Alternatively, mediators would either have to become a certified legal document preparer or avoid preparing mediation agreements without the supervision of an attorney.
In order to become a certified legal document preparer, the volunteer REALTOR® mediation officers would have to invest time and resources to obtain the certification. Because of this, AAR believed there would be a significant decrease in the number of REALTORS® willing to serve as mediators.
Notwithstanding the potential loss of volunteer mediators, in the event a mediator was not a certified legal document preparer, AAR would have to ensure an attorney was present at the mediation, which would be cumbersome and undermine the economic benefits offered by the mediation program.
Because AAR’s mediation program would be greatly impacted by the proposed changes, in April, AAR filed a comment with the Arizona Supreme Court outlining the positive benefits of AAR’s mediation program – which has been widely adopted by the industry and enjoys a success rate of approximately 80 percent on average.
In 2012, AAR had 23 mediations with a 100 percent success rate. By way of its comment, AAR advised the court of the dire consequences the proposed changes would have on its mediation program. Accordingly, AAR requested that the committee and Arizona Supreme Court maintain the exemptions that allow AAR to offer its mediation program.
On Monday, August 31, the Arizona Supreme Court issued minutes advising interested parties of its decision regarding Rule 31, which encompasses mediators, amongst other rules. AAR is pleased to announce that while the Supreme Court adopted some portions of the proposed changes, it ultimately left the subject mediator exemptions in place. Accordingly, with the help of its remarkable volunteer REALTORS®, AAR’s mediation program will continue as-is.
Nikki J. Salgat, Esq. is associate counsel to the Arizona Association of REALTORS®. This article is of a general nature and reflects only the opinion of the author at the time it was drafted. It is not intended as definitive legal advice, and you should not act upon it without seeking independent legal counsel.