FFA Technical Fix: Extension Agreements

At the all-stakeholders work group meeting December 14 we discussed a number of things, one that I had agreed to address before our next meeting on January 4 was the issue of extension agreements. It would be helpful to have the benefit of others' thinking on this and even an official position of the ADR Section.

Background. The FFA requires mediators to schedule a mediation session to be held within 45 days of receiving the referral from Commerce. The parties may extend that period by written agreement. Borrower's advocates in the workgroup wanted to propose giving the mediators discretion to decide to extend the period without the agreement of the parties. See RCW 61.24.163(4)(a)

More Discretionary Authority for Mediators is Contrary to Best Practice. I suggest that it is contrary to ADR best practices - especially the foundational mediation principles of party self-determination and impartiality - for more authority to be given to mediators to make decisions and impose them on the parties. See Model Standards of Conduct for Mediators, Standards I and II.

The idea of giving mediators  discretion to decide comes from a mindset that incorrectly sees a mediation as if it were an adjudicative process. This is another opportunity for us to show that it is informed use and best practices in mediation for mediators to encourage the parties reach agreements, even on process issues.

Though the FFA mediation is a hybrid, it is still an agreement-oriented process and not an adjudicative one. In an adjudicative process both the outcome and the process are imposed on the parties. In a mediation the mediator assists the parties to come to their own agreements on both outcome and process.

In the FFA hybrid there are already compulsory aspects to the mediation, but it is not the mediator imposing his or her decision. The participation by the beneficiary is mandatory, but that is the legislature's statement of policy that beneficiary's will participate, not the mediator mandating it. And the statute requires the mediator to make a certified determination of whether the parties participated in good faith, but that is after the mediation is completed. The mediator should not be given even more discretion to make decisions and impose them on the parties.

If the statute were changed to allow a mediator to extend the period without an agreement of the parties, it would compromise the mediator's impartiality. It would allow the mediator deciding to extend when one party, by definition, does not want to extend. This necessarily places the mediator in a position of opposing the party that doesn't want to extend and favoring the party that does want to extend. That's poor mediation practice.

Mediators are in the business of helping parties reach their own agreements. Mediators can continue to help parties reach agreements on whether to extend, too.

I see no need to change the language of the statute that currently allows the parties to reach agreement to extend. However, I do think there is some incremental efficiency by removing the requirement that the agreement be in writing.

Opposing the idea of granting more discretion to mediators is the important issue here. Removing the "in writing" requirement is not as important, but may be helpful. 

It would be helpful in these stakeholder agreements if the LegComm could recommend to the ExecComm to adopt the following legislative position.

Proposed Position on FFA Extensions to Mediate:

The Alternative Dispute Resolution Section of the Washington State Bar Association takes the following positions regarding possible amendments to the Foreclosure Fairness Act:

1. Mediators should not be given the discretion to decide to extend the period in which mediation sessions must be held without the parties agreement.

2. Convening the mediation will be more efficient if the agreement of the parties to extend is no longer required to be in writing. RCW 61.24.163(4)(a) is recommended to be amended: 

(4)(a) Within forty-five days of receiving the referral from the department, the mediator shall convene a mediation session in the county where the borrower resides, unless the parties agree on another location. The parties may agree in writing to extend the time in which to schedule the mediation session. If the parties agree to extend the time, the beneficiary shall notify the trustee of the extension and the date the mediator is expected to issue the mediator's certification.