Negotiating Licensure Reporting Capability During Mediation
Adopted: July 25, 2025
Opinion affirms prohibition on lawyers participating in a settlement agreement that includes a limitation on a party’s or counsel’s ability to report misconduct to the North Carolina State Bar and rules a lawyer serving as a mediator may not assist with or participate in a mediated settlement agreement that includes such a term.
Inquiry #1:
Lawyer A and Lawyer B represent Client A and Client B, respectively. Throughout the dispute and representation, the interaction between the parties and their respective counsel has been tense and difficult, including accusations from both parties of alleged misconduct by counsel. The parties, however, have agreed to pursue resolution of their dispute prior to trial and have instructed counsel to negotiate a settlement agreement. While discussing settlement terms, Lawyer A informs Lawyer B that Client A is exploring whether to file a grievance complaint against Lawyer B with the North Carolina State Bar, but that Client A would be willing to disregard a potential grievance complaint if Lawyer B and Client B agree to pay a larger monetary amount to Client A in the settlement. Lawyer B responds by suggesting that the settlement terms include a provision prohibiting both Clients A and B as well as Lawyers A and B from filing a grievance complaint with the North Carolina State Bar against either lawyer. All involved agree with this term.
May Lawyer A and Lawyer B suggest and agree to the settlement term prohibiting the lawyers and their represented parties from filing a grievance complaint with the North Carolina State Bar against the lawyers involved?
Opinion #1:
No.
The Ethics Committee has previously stated that, “an attorney may not condition settlement of a civil dispute on an agreement not to report lawyer misconduct.” RPC 84. The opinion provides,
In order for the North Carolina State Bar to fulfill its responsibility to regulate the legal profession, it is imperative that persons who are aggrieved by apparent lawyer misconduct or who have otherwise become aware of such misconduct feel free to transmit relevant information to the Grievance Committee for investigation. A lawyer who attempts to dissuade a person from reporting his or her alleged misconduct in the course of settlement negotiations or in any other context would be engaging in conduct prejudicial to the administration of justice in violation of Rule 1.2(d) [currently codified as Rule 8.4(d)] of the Rules of Professional Conduct.
Id.
Permitting lawyers to participate in a settlement agreement whereby the lawyers involved negotiate and agree to a term that prohibits an individual from reporting misconduct to the State Bar undermines and threatens the legal profession’s ability to carry out the critically important responsibility and privilege of self-regulation. Accordingly, Lawyers A and B cannot suggest, demand, or agree to a settlement term prohibiting the lawyers and parties involved in a dispute from filing a grievance with the North Carolina State Bar.
Inquiry #2:
Attorney mediator (Mediator) was designated to mediate a court-ordered mediation. The parties and their respective lawyers were present at the mediation. While Mediator caucuses with each party and their lawyers, Mediator took private notes on paper of the settlement terms being discussed. One of the terms to be included in the mediated settlement agreement (agreement) was proposed by one of the lawyers and provides that no party shall file a grievance complaint against any lawyer involved in the case, based on a claim arising out of the current cause of action, with the lawyer’s regulatory agency, i.e., the North Carolina State Bar. The lawyers asked Mediator to act as a scribe for the agreement and commit to writing the agreed upon terms.
Is Mediator in violation of the Rules of Professional Conduct by acting as a scribe and committing to writing the term prohibiting the filing of a grievance complaint with the State Bar?
Opinion #2:
Yes. The Preamble to the Rules of Professional Conduct emphasizes that a lawyer is subject to the Rules of Professional Conduct when a lawyer serves “as a third-party neutral, a nonrepresentational role helping the parties to resolve a dispute or other matter. Some of these Rules apply directly to lawyers who are or have served as third-party neutrals. See, e.g., Rules 1.12 and 2.4.” Preamble [3]. In essence, the Preamble indicates that, unless otherwise noted, a licensed lawyer is always subject to the requirements of the Rules of Professional Conduct regardless of the capacity in which the lawyer is acting. To maintain the privilege and ability to self-govern, all lawyers have a professional obligation to adhere to the Rules of Professional Conduct. Lawyers who serve as a third-party neutral, including mediators, are not excused from such obligations. Additionally, Rule 8.4(a) states that it is misconduct for a lawyer to “violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another.”
A settlement term that prohibits a party from filing a grievance complaint against any lawyer involved in the case interferes with the profession’s ability to regulate itself and is therefore conduct prejudicial to the administration of justice. See Rule 8.4(d); Opinion #1. Although Mediator was not the one to propose the language, it is professional misconduct for the mediator to knowingly assist the lawyers involved in the mediation to violate the Rules of Professional Conduct. Rule 8.4(a). Because lawyers cannot negotiate away the filing of a grievance complaint with the State Bar, Mediator is professionally obligated to avoid assisting the lawyers with negotiating a settlement term that prohibits a party from reporting one or more of the lawyers to the State Bar.
Inquiry #3:
Same scenario as #2 above, except one of the lawyers involved in the mediation drafted the agreement. The drafting lawyer provided Mediator with a copy of the agreement to review with all the parties.
Is Mediator in violation of the Rules of Professional Conduct by taking the term prohibiting the filing of a grievance complaint with the State Bar, in writing, back and forth between the parties while working toward a resolution?
Opinion #3:
Yes. See Opinions #1 & #2.
Inquiry #4:
Same scenario as #2 above, except Mediator did not take notes, but only verbally transmitted the settlement terms, including the agreement not to report any lawyer to the State Bar, between the parties.
Is Mediator in violation of the Rules of Professional Conduct by verbally transmitting the term prohibiting the filing of a grievance complaint with the State Bar between the parties while working toward a resolution?
Opinion #4:
Yes. See Opinions #1 & #2. Whether Mediator shares the settlement terms in writing or verbally is immaterial. Mediator may not violate the Rules of Professional Conduct through the acts of another and may not knowingly assist another in violating the Rules of Professional Conduct. Participating in or facilitating the inclusion of a term that is prohibited by the rules as described in this scenario constitutes a violation of Rule 8.4(a) and is prejudicial to the administration of justice. Rule 8.4(d).
Inquiry #5:
Same scenarios as Opinions #2, #3, and #4. Mediator is unaware of the rules and ethics opinions and does not know the term prohibiting the filing of a grievance complaint with the State Bar is a violation of the Rules of Professional Conduct. Under these circumstances, will Mediator be in violation of the Rules of Professional Conduct if the term is included in the agreement?
Opinion #5:
Yes. Although the Standards of Professional Conduct for Mediators do not require mediators to know the law relative to the issue in dispute, it is well settled that “[e]very lawyer is responsible for observance of the Rules of Professional Conduct[;]” therefore, lawyers are expected to have at least a general knowledge of the rules. Preamble [16]. Lawyers acting as mediators are not exempt from this expectation and are required to have a basic understanding of the Rules of Professional Conduct. Ignorance of the rules is no excuse.
Inquiry #6:
Same scenario as Opinions #2, #3, and #4; except the parties do not reach a resolution at the mediation but did discuss with Mediator the inclusion of a term in the agreement to not report any lawyer to the State Bar. The parties and their lawyers subsequently signed the agreement—including the aforementioned term regarding reporting any lawyer to the State Bar—two days later outside the presence of Mediator. Mediator subsequently learned of the agreement and the inclusion of the problematic term regarding reporting any lawyer to the State Bar.
Does Mediator have a duty to report the lawyers’ professional misconduct to the State Bar regarding their inclusion of a term in the agreement to not report any lawyer to the State Bar?
Opinion #6:
No, unless the Standards of Professional Conduct for Mediators permit disclosure of the lawyers’ misconduct.
Rule 8.3 requires a lawyer “who knows that another lawyer has committed a violation of the Rules of Professional Conduct that raises a substantial question as to that lawyer's honesty, trustworthiness or fitness as a lawyer in other respects [to]...inform the North Carolina State Bar or the court having jurisdiction over the matter.” Rule 8.3(a). However, Rule 8.3 recognizes that a lawyer who is serving as a mediator is also subject to the Standards of Professional Conduct for Mediators (the Standards), including the requirement to keep information learned during a mediation confidential. Std. 3, N.C. Stds. of Prof’l Conduct for Mediators (2023); see also Rule 8.3, cmt. [7] (a lawyer-mediator is required by the Standards “to keep confidential the statements and conduct of the parties and other participants in the mediation, with limited exceptions, to encourage the candor that is critical to the successful resolution of legal disputes.”). As of the date of this opinion, the Standards do not permit a mediator to disclose information concerning a lawyer’s professional responsibility that is learned during mediation. Consequently, Rule 8.3(e) sets out a different requirement concerning a lawyer-mediator’s duty to report the professional misconduct of lawyers that is learned of during mediation:
A lawyer who is serving as a mediator and who is subject to the North Carolina Supreme Court Standards of Professional Conduct for Mediators (the Standards) is not required to disclose information learned during a mediation if the Standards do not allow disclosure. If disclosure is allowed by the Standards, the lawyer is required to report professional misconduct consistent with the duty to report set forth in [Rule 8.3(a)].
Rule 8.3(e). As noted in the comment, “if the Standards allow disclosure, a lawyer serving as a mediator who learns of or observes conduct by a lawyer that is a violation of the Rules of Professional Conduct is required to report consistent with the duty set forth in paragraph (a) of this Rule.” Rule 8.3, cmt. [7].
Accordingly, if the Standards do not permit Mediator to disclose the professional misconduct of lawyers learned of during mediation, Mediator is not required to disclose the professional misconduct pursuant to Rule 8.3(a). If the Standards are amended to permit Mediator to report professional misconduct by lawyers that is learned of during mediation, Mediator would have a duty to report the lawyers’ professional misconduct pursuant to Rule 8.3(a).
Inquiry #7:
Although Mediator may not have a duty to report the lawyers to the State Bar pursuant to Rule 8.3(e) for their inclusion in the agreement of a term to not report any lawyer to the State Bar, what additional action, if any, should Mediator take in response to the parties’ and lawyers’ suggestion to include or inclusion of the problematic term in the agreement?
Opinion #7:
Presuming the Standards do not permit disclosure of the lawyers’ misconduct and Mediator does not have a duty to report the lawyers to the State Bar (see Opinion #6 above), Mediator retains the duty to not violate the Rules of Professional Conduct through the acts of another and to not knowingly assist another in violating the Rules of Professional Conduct. Rules 8.4(a), 8.4(d); see Opinions #2-4. To meet this professional responsibility, Mediator “should consider withdrawing from the mediation or taking such other action as may be required by the Standards” if the lawyers insist on conduct during the mediation that violates the Rules of Professional Conduct. Rule 8.3, cmt. [7]. Such other action may include informing the lawyers directly that the proposed term violates the Rules of Professional Conduct,1 suggesting the lawyers contact the State Bar for ethics advice providing the lawyers with a copy of this opinion, or explaining that Mediator’s own obligations under the Rules of Professional Conduct prohibit further participation in the mediation and shall require withdrawal if the lawyers or parties insist on including the term in future negotiations or draft agreements. If the lawyers or parties do not discontinue discussion or inclusion of the term in their settlement agreement, Mediator must withdraw from the mediation. Id.
Endnote
1. The Ethics Committee recognizes that Standard #6 of the Standards of Professional Conduct for Mediators (2023) prohibits a mediator from providing “legal advice or other professional advice during the mediation.” Whether this prohibition in the Standards permits a lawyer-mediator to opine on another lawyer-participant’s professional responsibility in a mediation is outside of the scope of the Rules of Professional Conduct. However, the Ethics Committee also recognizes that a lawyer—serving as a mediator or any third-party neutral—has a duty to advance and uphold the integrity of the legal profession and the administration of justice, which includes a lawyer’s obligation to not undermine the self-regulating nature of the legal profession. Warning or educating other lawyers regarding their professional misconduct during mediation serves the public interest, the legal profession, and the administration of justice.