February 2, 1994
The Michigan Rules of Professional Conduct are silent, and therefore impose no obligation, on the subject of whether a lawyer who functions as a neutral arbitrator or mediator must retain records relating to the arbitration or mediation for any specific period of time or notify the parties to such proceedings prior to the time the lawyer disposes of or destroys those records.
References: MRPC 1.12(d), 1.15(a), 1.16(d).
A lawyer reports having been appointed to mediate or arbitrate civil matters on a frequent basis, resulting in amassing more than 300 files in which the arbitration or mediation proceedings have been concluded. The lawyer now wishes to destroy those files, asserting that, in the lawyer's role as mediator or arbitrator, there were no attorney-client relationships, the lawyer having functioned as a neutral. The lawyer wishes to destroy the files within one year after conclusion of the arbitration or mediation assignment, and wonders whether ethics rules impose any retention requirement.
MRPC 1.15(a) states:
"A lawyer shall hold property of clients or third persons that is in a lawyer's possession in connection with a representation separate from the lawyer's own property. All funds of the client paid to a lawyer or law firm, other than advances for costs and expenses, shall be deposited in an interest-bearing account in one or more identifiable banks, savings and loan associations, or credit unions maintained in the state in which the law office is situated, and no funds belonging to the lawyer or the law firm shall be deposited therein except as provided in this rule. Other property shall be identified as such and appropriately safeguarded. Complete records of such account funds and other property shall be kept by the lawyer and shall be preserved for a period of five years after termination of the representation."
An arbitrator selected as a partisan of a party in a multi-member arbitration panel might be deemed to be involved in a "representation," in light of MRPC 1.12(d), a question on which no present opinion is expressed because it is not necessary to the question presented on these facts.
MRPC 1.12(d) clarifies that, generally, a neutral arbitrator is not involved in a "representation," due to the absence of a lawyer-client relationship, which of course would be inconsistent with any effort to function as a neutral. Compare MRPC 1.2(a) with MRPC 6.5(b). The neutral arbitrator must be exactly that, in light of the oath requirement of MCR 3.602(1), and by virtue of the fact that the arbitrator's award could be vacated if an arbitrator, appointed as a neutral, based a decision on partiality.
MRPC 1.16(d) similarly protects the interests of a client in papers and property held by a lawyer "upon termination of representation." Again, arbitrators who function as neutrals are not involved in a "representation," whether they are lawyers or not.
It must be concluded that the Michigan Rules of Professional Conduct are silent upon the subject, and do not impose any requirements on a lawyer functioning as a neutral arbitrator or mediator with respect to retention of documentation. It should, however, be noted that MCR 3.602(I) allows an arbitration award to be confirmed if a judicial proceeding to do so was instituted within one year after the award was rendered. Hence, it would seem clearly advisable for the inquiring lawyer to retain the files for a minimum of one year, and to dispose of such files after one year only if it is first ascertained that no judicial proceeding in relation has yet been instituted. It is also conceivable that a court called upon to confirm an arbitration award has equitable powers which could affect the question presented, a point of law outside the competence or bailiwick of this Committee.
For the purpose of this discussion, no distinction has been drawn between arbitrators and mediators. MCR 2.403(E) would disqualify as a mediator, in mediation under that rule, any lawyer who, if a judicial officer, would be disqualified by MCR 2.003, which latter rule disqualifies a judge presiding in a case in which the judge was lawyer for a party, or a member of a law firm representing a party within the preceding two years, or a partner of a party, or was otherwise consulted or employed as a lawyer in the matter in controversy. That would seem to reflect a general characteristic mediators and arbitrators share in common, neutrality, which would be inconsistent with the lawyer-client "representation" addressed in the record retention provisions of the Michigan Rules of Professional Conduct. Accordingly, any record retention requirements are external to the Michigan Rules of Professional Conduct, precluding further discussion consistent with this Committee's limited function.