The Ethics of ADR
Energy Bar Association
November 14, 2008
Richard L. Miles
Dispute Resolution Service and
Office of Administrative Litigation
Federal Energy Regulatory Commission
• Synopsis: Client’s case has been before FERC for
one to two years; many pleadings and possibly even
an administrative hearing before an ALJ is held; no
previous use of an ADR process but parties did
engage in unassisted settlement negotiations; case is
now in the court of appeals and your case is selected
for mediation; mediation works and at the end of
mediation, the mediator asks your client, why didn’t
s/he consider mediation or another ADR process
when unassisted negotiations failed Client then turns
to you – the lawyer - and asks, why didn’t we talk
about this? What is your response?
“Does an attorney have a duty to
advise client of ADR options when
practicing before a federal agency
such as FERC or a federal court?”
Does a duty exist?
What are the parameters of the duty?
Does it solely depend on state bar rules?
Could there be any consequences if ADR
options not discussed?
Federal Support for ADR
• United State Courts of Appeals
• U.S. District Courts
• Executive Branch (White House, DOJ, OMB)
• Administrative Agencies
• 2007 ADR Report to the President
Administrative Dispute Resolution Act of 1990
(initially passed in 1990; later finalized in 1996)
• promotes the use of alternative means of dispute
• ADR is any voluntary procedure used instead of
traditional adjudication to resolve matters in
• each agency required to designate a senior official to
be the Dispute Resolution Specialist
• ADR may be used only "if the parties agree to such a
Alternative Dispute Resolution Act of 1998
ADR when supported by the bench and bar, and utilizing
properly trained neutrals in a program administered by the
court, has the potential to provide a variety of benefits,
including greater satisfaction of the parties, innovative
methods of resolving disputes, and greater efficiency in
ALSO: Each district court is required to implement its own ADR
program and to authorize the use of at least one form of ADR.
Forms of ADR include but are not limited to mediation, early
neutral evaluation, minitrial, and voluntary arbitration.
• In 1994, the Commission in its NOPR to implement the
“It is the policy of the Commission to conclude its
administrative proceedings as fairly, effectively, efficiently,
and expeditiously as possible. . . . The ADRA gives the
Commission the opportunity to further develop and refine its
policies to achieve less costly, less contentious, and more
timely decisions in its proceedings. . . . [T]he Commission
intends to foster the effective and sound use of innovative
ADR procedures pursuant to the guidelines established in the
• Order No 578 issued in April 1995 integrated ADR techniques into
the Commission's dispute resolution procedures. The final rule also
modified, and added to, the Commission's regulations to achieve
this goal. Alternative Dispute Resolution, Order No. 578, FERC
Stats. & Regs. ¶ 31,018 (1995).
• Order No. 602, issued 3/31/99, revised the Commission’s
regulations governing complaints: encourages and supports the
consensual resolution of complaints; offered the services of the new
Office of Dispute Resolution Service and the Commission's
Enforcement Hotline to achieve this goal; and filings must state
whether ADR has been tried and if ADR under the Commission's
supervision should be considered.
When is ADR Appropriate at FERC –
• Have unassisted negotiations failed?
• Is your client seeking certainty?
• Are you contemplating filing a complaint?
• Are there time concerns?
• Should determining who has the winning position
have a higher priority over meeting client’s business
or resource interests?
When is ADR appropriate at FERC?
• Are your client’s interests not being met?
• Is your client interested in learning more on
the other party’s interests?
• Is your client committed to a resolution?
• Is there a history of communication problems?
• Are long-term relationships important to your
Do the issues involve policy or require
resolution to establish precedent?
ADR may not be appropriate at FERC if:
• A definitive resolution is required
• The resolution will define policy
• Outcome would affect non-participants
• A full record is important (e.g., enforcement action)
• Parties do not have full commitment to the process or
want a definitive ruling based on their position
Are there barriers to the increased use of ADR?
If so, are the barriers cultural or behavioral?
• Does federal support for ADR provide a culture
for increased use of ADR?
• Are lawyers one of those barriers?
• If so, why?
• Lack of understanding
• What Is ADR?
• Is ADR Mandatory?
• When Is ADR Appropriate?
• Who Controls Or Selects An ADR Process?
• Can the Insertion of a Third Party Neutral Make a
• Should Clients Educate Lawyers on When To Use a
FERC ADR Process?
Quotes on Why ADR Is Not Appropriate
• has attempted for almost a year to resolve this dispute
“. . .
informally with . . . . [We even] sent . . . . a settlement
proposal . . . For these reasons [we] believe that further
discussions with . . . would not be productive.”
• “. . . the parties have already discussed the issues
presented . . . without a successful resolution.
Consequently, the issues have already been joined
through those direct discussions with little possibility for
success of alternative dispute resolution procedures.”
Any thoughts on these quotes?
• Written by attorneys –
Do the quotes reflect an understanding of
Are lawyers giving ADR less attention than
If yes to the above, are there potential .......?
Questions - Restated
• Does A Lawyer Have A Duty To Advise
Client of ADR Options?
• If A Lawyer Has A Duty To Advise Client Of
ADR, When Should It Be Done?
• What Are The Parameters of Any Duty To
Advise Client of ADR?
• Are There Consequences If Any Duty Is Not
Model Rules of Professional
• Model Rule 1.2(a):
“[a] lawyer shall abide by a client’s decisions
concerning the objectives of representation . . .
and shall consult with the client as to the
means by which they are to be pursued.”
• Model Rule 1.4(b):
“[a] lawyer shall explain a matter to the extent
reasonable necessary to permit the client to
make informed decisions regarding the
Model Rules of Professional
Model Rule 3.2:
“[a] lawyer shall make reasonable efforts to
expedite litigation consistent with the interests of
Model Rule 2.1:
“In representing a client, a lawyer shall exercise
independent professional judgment and render
candid advice. In rendering advice, a lawyer
may refer not only to law but to other
considerations such as moral, economic, social
and political factors, that may be relevant to the
client’s situation.” 18
• If you the attorney or your client raise the
question whether settlement should be
pursued, should you also discuss the use
• Do Lawyers Practicing Before FERC Have A
Higher Obligation To Consider The Use of
Federal Court-Annexed ADR Programs-At-A-Glance
• for specific and current information on the operation of each
federal district court and court of appeals ADR program, go to
http://www.uscourts.gov/, search “ADR” to look for
information about ADR programs
• for an overview of the federal district court ADR programs,
see the Federal Judicial Center's publication at:
• for an overview of the federal appeals court ADR programs,
see the Federal Judicial Center's publication at:
• Law Review Articles
– Marshall J. Berger, Should an Attorney be
Required to Advise a Client of ADR Options?,
13 Geo. J. Legal Ethics 427 (2000)
– ADR and The Professional Responsibility of
Lawyers (A Symposium Sponsored by the
Association of American Law Schools), 23
Fordham Urban Law Journal 888 (2001)
Call Richard Miles, 202 502-8702 or email at