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The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 6573 February 28, 1989 ADMINISTRATIVE LAW AND PROCEDURE: Non-attorney representing party in mediation conference of Bureau of Workers' Disability Compensation ATTORNEYS: Representation of party in mediation conference of Bureau of Workers' Disability Compensation WORKERS' DISABILITY COMPENSATION: Non-attorney representing party in mediation conference A non-attorney may represent a party at the informal and non-binding mediation conference conducted by the Bureau of Workers' Disability Compensation under the Worker's Disability Compensation Act of 1969. Elizabeth P. Howe Director Department of Labor 611 West Ottawa Lansing, Michigan 48909 You have requested my opinion on the following question: May non-attorneys represent parties at mediation conferences under section 223 of the Worker's Disability Compensation Act of 1969? Workers' compensation mediation conferences are conducted pursuant to the Worker's Disability Compensation Act of 1969, 1969 PA 317, Secs. 222, 223, and 847, as added by 1985 PA 103, MCL 418.222, 418.223, and 418.847; MSA 17.237(222), 17.237(223), and 17.237(847), hereinafter Sec. 222, Sec. 223, and Sec. 847, respectively. Section 222 sets forth the procedures for mediation conferences. The procedures require an extensive exchange of factual information between employee and employer (or insurance carrier) before a claim is set for mediation. Section 847(1) reflects that a workers' compensation magistrate need not be present at a case set for mediation. While magistrates must be attorneys, MCL 418.213(1); MSA 17.237(213)(1), there is no comparable statutory requirement for mediators. Section 223, in pertinent part, provides for the mediation of disputed workers' compensation claims: "(1) A claim, except a claim concerning a petition to stop or reduce the payment of compensation or involving a carrier terminating the payment of benefits which had been voluntarily paid, shall be mediated by the parties pursuant to this section under any of the following circumstances: (a) The claim concerns a definite period of time and the employee has returned to work. (b) The claim is for medical benefits only. (c) If the claimant is not represented by an attorney. (d) If the bureau determines that the claim may be settled by mediation." "(2) All other claims shall be mediated pursuant to this section by the parties unless a party refuses in writing to mediate that claim." "(3) The bureau, upon proper notice to all parties, shall schedule a mediation conference for a claim that is to be mediated." Thus, all cases in which a claimant is not represented by an attorney shall be mediated. Section 223(2), above, further indicates that most disputed claims, except those as outlined in Sec. 223(1), shall be mediated unless a party declines in writing. It is noted that in Sec. 223(4) the Legislature has imposed a duty upon the Bureau of Workers' Disability Compensation to explain to the employee the pertinent rights and responsibilities of the employee under the Worker's Disability Compensation Act of 1969 before the mediation conference is held, particularly noting the amounts that could be deducted for attorney fees and costs if the claim is ultimately approved: "(4) Immediately before the mediation conference is held, the bureau shall review the carrier's response with the employee. The bureau shall also provide to the employee a clear and concise explanation of his or her rights and responsibilities under this act including a reasonable estimate of the maximum amount of benefits to which he or she would be entitled if the claim is approved and the amounts that could be deducted for attorney fees and costs." Section 223(5) establishes the procedure applicable to unresolved claims: "(5) If a mediation conference has been held and the claim has not been resolved, the mediator shall recommend 1 of the following: (a) If the amount of the claim is for $2,000.00 or less, that the claim be heard in the small claims division. (b) If the amount of the claim is for more than $2,000.00, that the claim be heard at a hearing held pursuant to section 847." In those instances, the mediator recommends that the disputed claim be heard in the small claims division, or through the formal hearing process as provided in Sec. 847, supra. Section 223(5) is significant in that certain post mediation procedures, namely small claims division hearings, specifically exclude attorneys from participating in the hearings. See MCL 418.841(5); MSA 17.237(841)(5). A summary review of Secs. 222, 223, and 847 reveals the following. First, the Legislature has specifically designated two mutually exclusive procedures in which to resolve disputed workers' compensation claims, mediation conferences and contested hearings. Second, the mediation procedures are intended to make the disputed resolution process less adversarial by requiring a prompt and complete exchange of factual information between the employee and employer (or insurance carrier) before the claim is formally advanced. Third, there is no requirement that the mediator be an attorney as is required of magistrates who conduct contested hearings. Fourth, the Act mandates mediation when the claimant is not represented by an attorney. Fifth, certain post mediation procedures statutorily exclude attorneys from participating. Sixth, there is no requirement that the mediation conference be recorded. Seventh, mediation is non-binding, and the mediator is without authority to resolve claims short of a stipulation of the parties. Eighth, mediation is non-appealable. While Secs. 222, 223, and 847 do not specifically address the issue of representation of the parties at the mediation conference, the sections clearly imply that these conferences are to be non-binding and informal and may be heard before non-attorneys prior to the formal contested hearing stage. The mediation provisions contemplate that a claimant may appear without an attorney. The mediation provisions also do not prohibit the accompaniment of a claimant's relative or friend, or the appearance of an employer's (insurance carrier) representative. Further, 1984 AACS, R 408.40(b), which was promulgated prior to enactment of Sec. 223 providing for mediation, does not address appearances. The Director of the Bureau of Workers' Disability Compensation, pursuant to authority conferred by MCL 418.205; MSA 17.237(205), and in accordance with the Administrative Procedures Act of 1969, 1969 PA 306, Sec. 45, MCL 24.245; MSA 3.560(145), may promulgate rules covering representation of parties at mediation conferences. While the exclusive province of the judiciary may define and regulate the practice of law in the courts, it is similarly the province of the Legislature to determine who a party in an administrative proceeding may select as his or her representative. See State Bar of Michigan v Galloway, 422 Mich 188, 195-197; 369 NW2d 839 (1985). In Galloway, the Supreme Court specifically held that the Legislature could authorize non-lawyers to represent parties in referee hearings of the Michigan Employment Security Commission. Other jurisdictions have had an opportunity to consider the involvement of insurance carrier workers' compensation adjusters in informal conferences. In Liberty Mutual Ins Co v Jones, 344 Mo 932; 130 SW2d 945 (1939), the court concluded that an insurance adjuster could participate within certain restrictions and set forth the parameters of authorized conduct: "7. The court declares the law to be that when a lay investigator or adjuster of an appellant company participates in an informal conference with or before the Workmen's Compensation Commission, such conference being held by and at the instance of such Commission or its representative for the purpose of endeavoring to bring about an amicable agreement between the insurer and the injured employee as to payment of compensation, such act of such lay investigator or adjuster does not constitute the practice of law or the doing of law business; but he shall be under the same restrictions as are imposed by findings 3, 4 and 8. "8. The Court declares the law to be that when a lay adjuster or lay claims manager of an appellant company determines for his employer the pecuniary limit which his employer will be willing to offer or pay in settlement of any claim arising under a policy of casualty insurance issued by such employer, this act of such lay adjuster or lay claims manager does not constitute the practice of law or the doing of law business; provided he does not determine the legal liability of his employer or its assured, but arrives at his conclusion either regardless of legal liability or upon the advice of counsel." 130 SW2d at 961-962. The court offered additional rulings regarding permissible activities by an adjuster: "4. The Court declares the law to be that when a lay adjuster employed by an appellant company, in the negotiation and settlement of a claim arising under a policy of casualty insurance issued by his employer, truthfully states to the claimant or claimant's representative what the company's attorney has advised such company as to the liability of the company or its insured upon such claim, this act of such lay adjuster does not constitute the practice of law or the doing of law business; but he shall not state or act upon his own opinion as to the legal rights of the company, insured or claimant. "5. The Court declares the law to be that when a lay investigator or adjuster employed by an appellant company, in his reports to his employer, expresses his opinion as to the monetary extent of the liability of his employer, or of the insured, upon any claim which he is charged with investigating or adjusting, such acts of such lay investigator or adjuster do not constitute the practice of law or the doing of law business; provided, he shall not pass on any question of law or legal liability." 130 SW2d at 961. Applying the holding in Liberty Mutual Ins Co v Jones, to the question presented herein, it would likewise be permissible for an employer or insurance company to send a salaried employee, who is not an attorney, to a mediation conference subject to the parameters and guidelines noted. The issue of non-lawyer representation with or without fee in Michigan workers' disability compensation proceedings was considered in OAG, 1937-1938, p 404 (January 19, 1938). At that time, the contested hearings were conducted by deputy commissioners of the former Department of Labor & Industry. The opinion concluded that representation of an individual or corporation by non-lawyers in a contested worker's compensation hearing constituted the practice of law and was prohibited. In so holding, Attorney General Starr quoted and relied upon a Dickinson County Circuit Court opinion in Michigan State Bar Assoc v McGregor (1934), [decision reported in Michigan Decisions, 14 Mich SBJ 145, 148 (1934) ] which recognized that contested administrative hearings are tantamount to trials in a court of law: " ' "It is a matter of common knowledge and a fact of which the court may take judicial notice, the Department of Labor and Industry, acting through its commissioners sitting as a board, and through its deputy commissioners, holds hearings throughout the state which are conducted under well defined and printed rules; considers legal questions, applies legal principles and weighs facts under legal rules. Litigating parties appear before deputy commissioners and before the full board by attorneys almost as universally as they do in courts of record. Practice before this board is an extensive branch of the law business." ' " OAG, 1937-1938, supra, at p 405. In contrast, workers' compensation mediation conferences were recently enacted by the Legislature and contain no such formal practices and procedures as found in contested hearings. Sections 222, 223 and 847 reflect that mediation conferences and contested hearings are, in fact, mutually exclusive. The Legislature may authorize non-lawyer representation in mediation proceedings. See Galloway, supra. As the former Act did not provide for informal mediation conferences, OAG, 1937-1938, p 404, supra, did not consider representation by lay members in mediation conferences. Representation of parties by non-lawyers at Michigan Public Service Commission hearings was also reviewed in OAG, 1979-1980, No 5456, p 63 (March 1, 1979). The opinion noted that it was not the function or duty of the Public Service Commission to define, prohibit or punish the unauthorized practice of law at its formal administrative hearings, that being the responsibility of the State Bar of Michigan and the courts. The opinion further concluded that not every form of participation in a representative capacity before an administrative agency constitutes the practice of law. This latter conclusion of OAG, 1979-1980, No 5456, supra, is applicable herein, and supports the premise that non-attorneys may not be precluded from participating in a representative capacity at informal workers' compensation mediation conferences. It is my opinion, therefore, that a non-attorney may represent a party at the informal and non-binding mediation conference conducted by the Bureau of Workers' Disability Compensation under the Worker's Disability Compensation Act of 1969. Frank J. Kelley Attorney General
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