California’s New ADR Ethics Law Takes Effect in 2025: What Neutrals and Practitioners Should Know
In a move that could reshape the professional landscape of alternative dispute resolution (ADR) in California, Governor Gavin Newsom signed into law a new bill establishing a voluntary certification process for mediators and arbitrators operating in the state. The law, set to take effect on January 1, 2025, follows months of discussion, critique, and anticipation within the ADR community.
At its core, the legislation aims to foster greater public trust in private dispute resolution by providing structured oversight and ethical accountability for neutrals. Although the certification regime is not mandatory, many believe that market pressures will incentivize widespread participation. With stakeholders increasingly emphasizing transparency, neutrality, and integrity in dispute resolution, this law may mark the beginning of a new chapter for ADR ethics—one that could influence jurisdictions well beyond California.
Background: A Push for Ethical Oversight
The new law is part of a broader response to concerns over ethical conduct and transparency in private ADR, particularly in high-stakes cases involving vulnerable or unrepresented parties. These concerns gained national attention following the fallout from the Tom Girardi scandal, in which the now-disbarred California attorney allegedly misappropriated millions of dollars in client funds.
Although Girardi was not a neutral, the controversy illuminated the lack of oversight mechanisms within the private ADR system. As many of Girardi’s cases were resolved through confidential ADR processes—and as some neutrals were implicated in failing to act ethically or impartially—the issue prompted legislative interest in creating ethical safeguards for arbitrators and mediators.
The newly signed bill represents California’s attempt to formalize those safeguards—without upending the foundational privacy and flexibility that make ADR attractive.
Key Features of the Law
The legislation introduces a voluntary certification system for mediators and arbitrators in California. Here are some of the core components:
Certification Through a State-Approved Agency: Neutrals can choose to apply for certification through an agency designated by the state. Certification will be tied to adherence to an approved code of ethics, including continuing education requirements and, in some cases, disclosure obligations.
Voluntary, Not Mandatory: Participation in the certification program is entirely optional. However, neutrals who opt in will be allowed to market themselves as “certified” under California law, which may carry persuasive weight with counsel and parties selecting an ADR provider.
Ethical Standards Enforcement: The certifying agency will be responsible for monitoring compliance with ethical standards and addressing complaints of misconduct. Though the law does not grant this agency formal disciplinary power akin to a bar association, it may suspend or revoke certification in cases of serious ethical breach.
Consumer Awareness: The legislation requires the state to publish a list of certified neutrals and provide educational materials to help the public and legal professionals understand the implications of choosing a certified provider.
Reactions from the ADR Community
Not surprisingly, the law has generated a mix of support, skepticism, and curiosity.
Supporters argue that:
Voluntary certification will raise the overall quality and credibility of ADR services;
Public trust may increase if parties know their neutral has met defined ethical and training standards;
Certification may serve as a helpful guidepost for parties unfamiliar with ADR or selecting a neutral for the first time.
Critics contend that:
ADR is inherently a private, consensual process, and introducing oversight—even voluntary—could undermine its flexibility;
The creation of a certifying agency adds bureaucracy that may have unintended consequences or be inconsistently applied;
This law may be more reactive than proactive, a symbolic gesture responding to the notoriety of the Girardi scandal and the negative press surrounding reality television, rather than to systemic problems in ADR.
Some critics have gone so far as to suggest that the law is a “knee-jerk reaction” to recent scandals, without fully considering the practical nuances of regulating private mediation and arbitration.
The Privacy-Ethics Tradeoff
One of the central tensions underlying the new law is the balance between privacy and oversight. ADR—particularly arbitration—is prized for its confidentiality, speed, and finality. Court proceedings, by contrast, are public, often slow, and subject to appeal.
But privacy can also shield problematic conduct from view, including conflicts of interest, bias, or inadequate procedural fairness. The law attempts to thread this needle by making certification optional while providing public-facing ethical guardrails for those who seek additional credibility.
This dual-track approach may create a new market dynamic: certified neutrals who promote their ethical credentials versus non-certified neutrals who continue to rely on reputation and experience alone.
Will the Market Embrace Certification?
Much will depend on how legal consumers—attorneys, insurers, employers, and individual parties—respond to the new certification regime. If institutional clients begin to require or prefer certified neutrals, the program may gain rapid traction.
Similarly, if courts or governmental agencies begin to recommend certified neutrals for court-annexed ADR programs, certification could become a de facto requirement, even if not legally mandatory.
Conversely, if the certification process is seen as burdensome or if enforcement mechanisms lack clarity, neutrals may choose to remain outside the system—particularly those with well-established practices and reputations.
Nationwide Implications
Although this is a California-specific law, it will likely be watched closely by ADR professionals across the country. California is often a bellwether state, particularly when it comes to consumer protection and legal innovation. Other jurisdictions with active ADR ecosystems—such as New York, Illinois, and Washington—may evaluate similar approaches depending on how California's law is received.
Additionally, national ADR service providers may find themselves adjusting policies, marketing language, or training programs to accommodate the new certification regime and ensure consistency across jurisdictions.
The Bottom Line for Neutrals and ADR Users
Whether this law succeeds in bolstering public confidence or merely adds a new layer of red tape will depend on its implementation and the buy-in it receives from the legal community.
In the meantime, parties selecting a mediator or arbitrator in California may begin to ask: “Are you certified?”—and neutrals should be prepared to answer not only whether they are, but why they chose to certify or not.
Trusted ADR Services in a Shifting Landscape
As ethical standards and credentialing mechanisms evolve, legal professionals and clients alike will need to think carefully about who they entrust with resolving their most significant disputes. Experience, fairness, and neutrality remain paramount.
At Nationwide ADR, those principles are more than aspirational—they are foundational. With services spanning business torts, consumer law, employment matters, and complex arbitration and mediation, Nationwide ADR maintains a reputation for integrity, sound judgment, and procedural excellence.
Regardless of jurisdiction, venue, or format, the mission remains constant:
Unlocking Solutions for Demanding Cases.
Trusted. Balanced. Resolution Driven.
To learn more about arbitration, mediation, and ethical ADR services nationwide, visit NationwideADR.com.