Why Mediation Needs Regulation

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Mediation should be regulated for the good of the public, argues legal scholar.

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When Gary Karpin was disbarred in Vermont, he moved to Arizona, hung his law degree on the wall, and branded himself a “divorce mediator.” Karpin promised his clients “divorce with dignity.” Instead, a court found that he scammed dozens of Arizonans out of hundreds of thousands of dollars.

Karpin was presumably able to get away with his so-called mediation practice for so long because states often do not regulate mediation, unlike most occupations. To reduce abuses, states need to start regulating mediators, one legal scholar argues in a recent paper.

Today, people can claim to be mediators, regardless of their qualifications, and individuals wronged by these mediators have few effective means of recourse. But Art Hinshaw of the Sandra Day O’Connor College of Law at Arizona State University proposes a licensure scheme he suggests would both protect the public and the mediation profession. Hinshaw proposes awarding mediation licenses based on a mediator’s ability to collect and analyze information to facilitate communication.

It is often difficult for consumers to evaluate the quality of mediators, since most consumers lack information about the general cost and process of mediation.” Further, regulation would aim to ensure that everyone claiming to be a “mediator” is appropriately qualified.

Although Hinshaw and other scholars raise compelling policy justifications for regulating mediators, states have not done so. Mediators have argued against regulation, but Hinshaw finds their arguments unpersuasive.

For example, mediators contend that the market sufficiently regulates their profession: With an oversupply of mediators, ineffective or unscrupulous mediators are pushed out of the market. But Hinshaw points to Gary Karpin, the unscrupulous mediator the market failed to push out for over 15 years.

Mediators also worry that regulation will favor certain styles of mediation—especially those that resemble lawyering—to the detriment of other styles, such as those derivative of counseling, social work, or psychology. Hinshaw acknowledges this as a reasonable concern; however, he suggests that regulatory bodies should not consist of just lawyers but also include counselors, social workers, and others.

A final argument mediators raise against regulation is the possibility of increased costs that could price some customers out of the service. Mediators are concerned that if they have to pay to renew their licenses every year, they would need to pass that cost along to customers.

Hinshaw admits that regulation would increase costs, but he claims that no one would be priced out of mediation services. Mediators would spread any increased costs across all the parties to a mediation. For instance, if a licensing fee were $600 annually and the mediator only did one mediation involving two parties a month—resulting in a total of 24 mediation clients a year—mediators would only increase their prices by $25 a mediation.

Hinshaw proposes a two-pronged method for determining exactly which activities constitute mediation that should be regulated. States should regulate those who take advantage of the benefits that derive from mediation, such as confidentiality, Hinshaw argues. Further, Hinshaw suggests that states should also regulate anyone who claims to be a mediator, performs mediation services, and is compensated for those services. A party who benefits legally, financially, or both legally and financially from claiming to be a “mediator” would be subject to regulation under Hinshaw’s approach.

This two-pronged approach is broad enough to extend regulation to parties who benefit from the mediation profession legally or financially and is narrow enough not to overextend regulation, suggests Hinshaw. For example, a boss who is resolving a conflict between two employees would not need a license to mediate.

Hinshaw argues that requiring mediators to be licensed would provide the most effective means of regulation for the profession. Hinshaw contends that regulators would only license qualified mediators and could revoke the license of any mediator who consistently exhibits unscrupulous or incompetent behavior. Hinshaw proposes that in determining the quality of a mediator, a regulator would assess the candidate’s ability to gather, communicate, and analyze information in order to facilitate communication. Hinshaw suggests that mediators would have to pass an initial assessment to qualify for an initial license and have to renew that license periodically throughout their tenure as a mediator.

Hinshaw’s article was recently published in the Harvard Negotiation Law Review.