Increasing Ethical Scrutiny in ADR: California’s SB 940 Seeks to Professionalize Mediators and Arbitrators
California has long been a bellwether in legal innovation. Now, with Senate Bill 940 — introduced by Senator Tom Umberg and advancing through the Statehouse — ethical accountability in alternative dispute resolution (ADR) is set for a major overhaul. The bill proposes a mandatory certification system under the California State Bar, targeting ethical compliance among arbitrators, mediators, and ADR providers.
Here’s what to know about SB 940 — and why its potential ripple effects may influence ADR standards nationwide.
What SB 940 Proposes
At its core, SB 940 aims to build upon California's Consumer Contract Awareness Act of 1990 by adding ADR-specific ethical oversight. If passed, the State Bar would be required to develop a certification program for ADR entities, complete with a tiered level system. Certified neutrals and providers could then market their status — creating a significant incentive to meet the new standards.
Key certification criteria would include:
Adherence to Neutral Arbitrator Ethics: Compliance with Ethics Standards for Neutral Arbitrators in Contractual Arbitration under CCP § 1281.85.
Mediation Ethical Requirements: Alignment with the Rules of Conduct for Mediators in Court-Connected Programs (CRC 3.850–3.860).
Complaint Mechanism: A formal process for filing grievances against ADR providers or neutrals.
Enforcement Remedies: Protocols for disciplining neutrals who violate ethical codes.
With these structures in place, certified ADR professionals would be grouped into compliance tiers, creating market differentiation based on ethical standards — something that could eventually influence national practices.
California as the ADR Ethics Vanguard
Innovations emerging from California often echo nationwide — particularly when tied to consumer protection and legal oversight. The state has already enacted strong data privacy, consumer laws, and rules around wages, discrimination, and professional ethics. ADR regulation is the logical next frontier.
SB 940 is part of a broader movement toward greater accountability for neutrals — driven in part by public scrutiny stemming from high-profile cases like the Tom Girardi legal-ethics scandal. When mediators, arbitrators, or ADR firms lack transparency or accountability, the integrity of private dispute resolution is at stake.
Why Ethics Accountability Matters
Private ADR depends on firm — but invisible — ethical foundations. Unlike courts, ADR sessions generally occur in private settings, potentially with no public record. This confidentiality is a key benefit — but it also means that misconduct can remain hidden.
SB 940’s certification system would:
Enhance trust by making ethical compliance visible and verifiable.
Allow consumers and counsel to choose neutrals or providers at higher tiers.
Create consequences for misconduct, going beyond mere reputational harm.
Show that California takes ADR credibility seriously — and that may spur other jurisdictions to follow suit.
Tiered Certification: A Game Changer
One of the more novel aspects of SB 940 is its plan for tiered certification levels. Similar to how local governments certify contractors, this model encourages neutrals and firms to continually improve and maintain their ethical standing.
Possible tier levels could include:
Basic Certification: Meets minimum education, ethical, and professional standards.
Advanced Certification: Requires continuing education, complaint-free track record, or peer recommendations.
Platinum or Elite Tier: Reserved for neutrals with advanced training, diverse experience, public recognition, or service in court-annexed programs.
In a competitive ADR market, certification tiers could become brand signals. Parties selecting mediators might seek higher-tier neutrals for high-stakes cases, while other neutrals may focus on consumer or family matter experience.
Potential Concerns and Criticisms
As with any regulatory reform, SB 940 raises questions:
Could mandatory certification hinder inclusivity, especially for sole practitioners or volunteers?
Is a state bar enforcement mechanism the right model, or should it be an ADR organization-led system?
Will the State Bar be able to enforce the program effectively and consistently?
Could tiers unintentionally pressure neutrals into unnecessary continuing education or fees, increasing costs?
The bill’s drafters appear aware of these concerns — hence the tiered structure and voluntary participation. But as the certification program takes shape, California courts and stakeholders will be watching closely for unintended consequences.
SB 940’s Forward Trajectory
SB 940 has cleared key Senate committees and now heads to the floor for a vote. If the legislature approves, the governor may sign it into law later this year — or allow it to pass without signature.
Implementation would likely begin in early 2026, giving the State Bar time to organize committees, create training modules, tiered frameworks, and complaint mechanisms. ADR firms and neutrals can start preparing now — by comparing their practice to current ethical codes and tracking complaints, if any, as part of risk management.
What This Means Beyond California
Even if SB 940 remains California-specific for now, national ADR bodies and other states often emulate successful frameworks. SB 940 may influence:
Uniform certifications through bodies like AAA, CPR, or JAMS
State-level reforms, especially in large ADR jurisdictions like New York, Florida, or Texas
Private ADR firms, who may adopt voluntary tiered certification standards in anticipation of market demand
Certification may prove to be the next step in the ADR ecosystem’s maturation — bringing private dispute resolution closer to the regulated professionalism seen in law, accounting, or real estate.
Strategic Takeaways for ADR Professionals
Monitor SB 940’s progress, and be prepared for certification requirements in professional circles.
Explore voluntary training and compliance workshops aligned with CRC §§ 1281.85 and 3.850–3.860.
Develop ethics documentation and procedures, including complaint handling and remediation processes.
Evaluate marketing options for tiered status — should SB 940 pass, clear communications around certification may be a strategic advantage.
Nationwide ADR: Ethics in Action
Ethical integrity isn’t optional — it’s foundational. At Nationwide ADR, neutrals and staff embrace ethical accountability every day:
Strong practices in conflict checks, disclosure, and impartiality
Complaint procedures that are transparent but confidential
Regular staff training aligned with California’s standards and national best practices
Whether in arbitration, mediation, consumer law, employment, or tort disputes, Nationwide ADR operates with clarity, balance, and professionalism — laying groundwork for any future credentialing or certification.
Unlocking Solutions for Demanding Cases
Trusted. Balanced. Resolution Driven.
To learn more about how ADR certification could affect your dispute strategy — or to evaluate compliance across jurisdictions — visit NationwideADR.com.