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New Mediation Option Available to Licensees

New Mediation Option Available to Licensees in The Event of Any Agency Adjudicative Hearing

On May 29, 2018, Governor Hickenlooper signed into law House Bill 18-1224 (the “Act”), which amends C.R.S. § 24-4-105 (4)(a) to require mediation for a licensee in certain circumstances. The Act also amends C.R.S. § 24-4-106 (7), the portion of the administrative procedure act applicable to judicial review of agency actions, adding a new requirement for the licensee to be afforded an opportunity to mediate the matters in dispute under C.R.S. § 24-4-105 (4) as a pre-cursor to continuing with any proceedings in the case. These changes represent a significant improvement to licensees’ due process rights, including real estate brokers, when faced with a disciplinary proceeding to be determined by a Hearing Officer or Administrative Law Judge.

Specifically, as it pertains to judicial review of agency actions, the Act amends C.R.S. § 24-4-106 (7)(b) and (7)(b)(IX), which now provides that “the court shall hold unlawful and set aside the agency action…if the agency action is…otherwise contrary to law, INCLUDING FAILING TO COMPLY WITH SECTION…24-4-105 (4)(b)” which refers to the Act’s new requirement for mandatory mediation upon licensee request to the extent the licensee’s license was not summarily suspended under C.R.S. § 24-4-104 (4). Accordingly, should a licensee not be afforded his/her opportunity to mediate any issues raised in a notice of hearing by the agency when requested by the licensee or the agency, the Act now provides that such failure to afford the licensee an opportunity to attend mediation is unlawful, constituting grounds to set aside the agency action. In other words, Colorado real estate brokers, or other licensees covered by the Act, must now be afforded an opportunity to mediate any charges brought by the Real Estate Commission or other regulatory authority before a decision is rendered on those charges by a Hearing Officer or Administrative Law Judge.

With regard to the intended purpose of the new mediation requirement, it is evident from the language in the Act that the Colorado legislature thoughtfully reviewed whether the mediation process should be afforded to licensees with pending agency cases, as the Act indicates that these amendments to the administrative procedure act were appropriate as mediation would generally save the “state and licensee time and money.” C.R.S. § 24-4-105 (4)(b)(I)(A). Moreover, the legislature further declared that “the policy of Colorado is to use mediation whenever appropriate to settle disputes between agencies and licensees.” C.R.S. § 24-4-105 (4)(b)(I)(B).

When mediation is ordered by the Administrative Law Judge or Hearing Officer following a request by either the licensee or the agency, the agency is required to provide a person with settlement authority to be present during the settlement communications and negotiations, including the mediation, and mediate in good faith.

The licensee has the option of requesting a private or public mediator to mediate the issues in dispute.  If a private mediator is selected, the licensee bears the burden of the cost of the mediation.  However, administrative law judges will also be available to serve as public mediators without any additional cost to the licensee.

Pursuant to Section 5 of the Act, the Act applies to “judicial review of an agency’s actions under preexisting law, on or after the effective date of this act.”  C.R.S. § 24-4-104 (4).  Accordingly, if you are a licensee with a pending agency proceeding, mediation may now be an option for you.  Please contact me should you wish to discuss mediation options that may be available to you under the Act.

This article should not be construed as legal advice.  To the extent you have any questions regarding the contents of this article or your rights as a licensee, please contact an attorney.