North Carolina Administrative Code › Title 27 - STATE BAR › Chapter 02 - RULES OF PROFESSIONAL CONDUCT OF THE NORTH CAROLINA STATE BAR › Section .0200 - COUNSELOR › Section 02 RULE 2.04 - LAWYER SERVING AS THIRD-PARTY NEUTRAL

Current through Register Vol. 39, No. 2, July 15, 2024
(a) A
				lawyer serves as a third-party neutral when the lawyer assists two or more
				persons who are not clients of the lawyer to reach a resolution of a dispute or
				other matter that has arisen between them. Service as a third-party neutral may
				include service as an arbitrator, a mediator or in such other capacity as will
				enable the lawyer to assist the parties to resolve the matter.
(b) A lawyer serving as a third-party neutral
				shall inform unrepresented parties that the lawyer is not representing them.
				When the lawyer knows or reasonably should know that a party does not
				understand the lawyer's role in the matter, the lawyer shall explain the
				difference between the lawyer's role as a third-party neutral and a lawyer's
				role as one who represents a client.
Comment
[1]
				Alternative dispute resolution has become a substantial part of the civil
				justice system. Aside from representing clients in dispute-resolution
				processes, lawyers often serve as third-party neutrals. A third-party neutral
				is a person, such as a mediator, arbitrator, conciliator or evaluator, who
				assists the parties, represented or unrepresented, in the resolution of a
				dispute or in the arrangement of a transaction. Whether a third-party neutral
				serves primarily as a facilitator, evaluator or decisionmaker depends on the
				particular process that is either selected by the parties or mandated by a
				court.
[2] The role of a
				third-party neutral is not unique to lawyers, although, in some court-connected
				contexts, only lawyers are allowed to serve in this role or to handle certain
				types of cases. In performing this role, the lawyer may be subject to court
				rules or other law that apply either to third-party neutrals generally or to
				lawyers serving as third-party neutrals. Lawyer-neutrals may also be subject to
				various codes of ethics, such as the Rules of the North Carolina Supreme Court
				for the Dispute Resolution Commission and the North Carolina Canons of Ethics
				for Arbitrators.
[3] Unlike
				nonlawyers who serve as third-party neutrals, lawyers serving in this role may
				experience unique problems as a result of differences between the role of a
				third-party neutral and a lawyer's service as a client representative. The
				potential for confusion is significant when the parties are unrepresented in
				the process. Thus, paragraph (b) requires a lawyer-neutral to inform
				unrepresented parties that the lawyer is not representing them. For some
				parties, particularly parties who frequently use dispute-resolution processes,
				this information will be sufficient. For others, particularly those who are
				using the process for the first time, more information will be required. Where
				appropriate, the lawyer should inform unrepresented parties of the important
				differences between the lawyer's role as third-party neutral and a lawyer's
				role as a client representative, including the inapplicability of the
				attorney-client evidentiary privilege. The extent of disclosure required under
				this paragraph will depend on the particular parties involved and the subject
				matter of the proceeding, as well as the particular features of the
				dispute-resolution process selected.
[4] A lawyer who serves as a third-party
				neutral subsequently may be asked to serve as a lawyer representing a client in
				the same matter. The conflicts of interest that arise for both the individual
				lawyer and the lawyer's law firm are addressed in Rule 1.12.
[5] Lawyers who represent clients in
				alternative dispute-resolution processes are governed by the Rules of
				Professional Conduct. When the dispute-resolution process takes place before a
				tribunal, as in binding arbitration (
see
Rule 1.0(n)), the
				lawyer's duty of candor is governed by Rule 3.3. Otherwise, the lawyer's duty
				of candor toward both the third-party neutral and other parties is governed by
				Rule 4.1.