Administrative agencies perform numerous functions. Some of these functions are informal. Different laws and regulations govern these functions, but statute does not govern majority of informal procedures. Thus, agencies exercise some discretion. Limits and types of discretion will be described below. A current research paper will focus on arbitration and mediation.
Administration agencies have numerous functions, such as providing services to individuals and public and solving specific issues. The example, the Occupation Safety and Health Agency has been created for performing audit of health hazards and safety in the workplace.
There are different categories of administrative agencies, which perform different functions and solve different problems. Examples of these agencies are the following: independent (environmental), social welfare (social security), regulatory (commerce), and executive (national defense).
Agencies have numerous rights. They can create standards, regulations, and rules. They can make prosecution against individuals and organizations, which break these standards or refuse to obey rules. Also agencies have a right to perform investigation of complaints and make decisions on those actions that come before it claims and hearings.
Majority of agency actions are informal. However, formal procedures must be used in adjudication and rule-making. The Administrative Procedures Act (APA) and other laws govern rule-making and adjudication. Agencies perform numerous functions and informal procedures in addition to rulemaking and adjudication, which form the lifeboat of the administrative process. Numerous acts and laws govern these functions, but the statute does not govern majority of informal procedures. Thus, agencies exercise some discretion during performing them, i.e. they can choose from two or more different alternatives. Agencies have power to use different expertise for making their choices and solving different issues. For example, the agency can decide to levy fines against an individual violating a rule instead of choosing to issue a warning.
Existing laws and regulations are not perfect. They can not regulate all possible issues and cover all possible situations. The laws enacted by the legislatures are not detailed and specific enough to apply to individual action that presents itself before the agency. At the same time, agency’s statutes do not cover all aspects of life. That is why administrative agencies have to be flexible enough for adaptation to changes in social and economic life. Agencies have an ability to choose from different reasonable options, i.e. they have their inherent discretion.
Discretion can be used in numerous situations. Examples of these situations are the following: informal hearings, levying of penalties for noncompliance with agency rules, negotiations, rulemaking, and processing claims. More concrete examples will be described below.
If the agency regularly imposes overburdening penalties, the agency becomes domineering….if the agency makes no discretionary decisions to impose penalties, quite possibly no one will comply with the rules. Excessiveness of this discretion and lack of control of agencies can cause arbitrariness. At the same time, lack of this discretion can cause inflexible and unjust public administration. If there is too little discretion, the agency may become ineffective in the daily decision-making. Thus, there should be some middle position.
As it was mentioned above, excessiveness of discretion and lack of any control over agencies can lead to arbitrary decisions of these agencies. That is why the Federal Constitution, state constitutions, and statutory laws protect the civil rights of framers.
Discretion of agencies has numerous benefits. Philip Howard in his book The Death of Common Sense: How Law is Suffocating America stated that discretion is necessary and inherent part of public administration. It is extremely necessary for insuring humanity in the process of governance.
Efficient control of agency discretion is rather difficult task, because in some cases this control may have unintended and counterproductive consequences. Philip Howard gave an example that, nowadays, excessiveness of workplace safety rules leads to the situation when inspectors can choose the rules for enforcement. However, these rules were developed to limit the authority of inspectors. Howard stated that rule makers can not foresee any possibility and danger. At the same time, strict enforcement of rules can lead to certain problems: enforcing rules when the objective of the rule is not satisfied, and not acting when needed because the drafters of the rues did not foresee the problem. Thus, agency’s discretion is extremely necessary for achievement fairness. At the same time, existence of certain rules does not mean total solving of problems. In this case, discretion with some limits is necessary to address numerous problems and issues that confront public administrations.
Limits of Agency Discretion
People remain unprotected or protected by very few procedures when agencies perform informal actions. Only a few constraints can unfetter or hamper the discretion. So, fairness can not be obtained in such situations. At the same time, the court can not review all of the discretionary decisions. It should be mentioned that discretion of agencies can be also limited by political accountability. For example, control from the side of the Congress, the President, or the public.
People can protect themselves form negative influence of agency discretion by constitutional protections, politics, and statutes. Personal basic rights are protected by the Constitution of the USA. The general boundaries of the enabling statute / act that specified the agency’s mission also protect people from agency discretion. Politics and public perform thorough examination and overview of agency discretion.
Examples of Agency Discretion
Majority of actions performed by agencies are informal. That is why these actions are the subject to a little judicial review, i.e. they are discretionary. Some examples of agency discretion will be provided below. Arbitration and mitigation are among these examples together with prosecution discretion, rulemaking and policy discretion, claims and applications decisions, protective action, tests and inspections generally, and advisory opinions and declaratory orders.
Mediation and Arbitration
Different administrative agencies are responsible for conducting arbitration and mediation.
The most common type of resolution of private is arbitration. Arbitration is special kind of a process when parties of this process submit their own respective arguments and positions to third parties and all concerned for taking a decision. Arbitrators perform functions of decision-making. In the other words, arbitration is a process of having the parties to a dispute present their evidence and arguments to a neutral third party for decision. It is also known as a process where one or more arbitrators issue a judgment (binding or non-binding) on the merits after an expedited adversarial hearing. Arbitration can be voluntary and statutory. There are different formalities of arbitration. These formalities can be presented as a simple council’s summary or may additionally involve presentation of different documents and witnesses. A decision is rendered that address liability and damages, if necessary in different forms. These forms include incentives, ‘high-low’ or ‘bounded’, ‘final-offer’ or ‘baseball’, binding and non-binding.
State agencies are obliged to have legislative authorization, which is granted by sovereignty of immunity issues. Legislative authorization enables state agency’s engagement in binding activities.
As it was mentioned above, in some cases, arbitration is non-binding. Thus, arbitrator’s rulings are only advisory. It is intended to provide the parties with a realistic assessment of the strengths and weaknesses of their respective positions so that the parties may be able to reach an agreed settlement. It should be mentioned that in these cases parties that win the non-binding ruling may become more insistent that any resolution should be heavily weighted in its favor.
The process of mediation is also known as conciliation. During this process, the parties enter the dispute. The goal of this dispute is to assist the parties and all concerned to reach some particular resolution. The objective of this intervention is to assist the parties involuntary reaching an acceptable resolution of issues in dispute. Mediating parties are go-betweens. Mediator plays a role of facilitator. This party proposes ways how parties can resolve a dispute between them. In other words, mediation is a process of having a neutral third party intervene in a dispute in an attempt to assist the parties in reaching a resolution. Mediation can be statutory and voluntary.
This form of agency discretion is extremely useful in highly-polarized disputes. In these disputes, parties have either been unable to initiate a productive dialogue, or where parties have been talking and have reached a seemingly insurmountable impasse.
Mediating parties are go-betweens. Mediator plays a role of facilitator. This party proposes ways how parties can resolve a dispute between them. Mediating party can make propositions of different substantive options. These options can help the parties to expand the range of possible resolutions under consideration. Usually mediators work with each party separately in caucuses, to explore acceptable resolution options or to develop proposals that might move the parties closer to resolution. The mediator is involves in negotiations from the time or receiving of contract notification from the Federal Mediation and Conciliation Service. Additionally, the case assignment is required.
There are different kinds of mediators depending on their degree of control during their consultations. Mediators can present only on the stage of bargaining. They can offer some prepositions of solving the dispute between parties. These mediators can intervene in the negotiations only to avoid or overcome a deadlock. However, other mediators can be deeply involved in dispute, details, and interests of different parties. Regardless of how directive the mediator is, the mediator performs the role of catalyst that enables the parties to initiate progress toward their own resolution of issue in dispute.
In some cases collective bargaining mediation is used. It is a voluntary process. Collective bargaining mediation takes place in case when neutral third party mediator renders assistance to other two sides for reaching certain agreement between these two parties.
Using a mediator does not mean that negotiations have failed. Using the mediator means that the parties use the true and tried resource for environment creation where parties can listen to each other. Also, mediators help improvement of the bargaining process.
The Federal Mediation and Conciliation Service (FMCS) is an administration agency that performs mediation. Mediation services are provided in government and community agencies all over the world, industrial issues. The Federal Mediation and Conciliation Service stipulates mediation of different labor disputes in the USA. It is an independent agency. The Federal Mediation and Conciliation Service was formed in 1947.
The statute of this agency helps to conduct arbitrations upon agreement of the parties. The Federal Mediation and Conciliation Service performs numerous functions. The agency plays a role of the mediator in labor disputes which affect interstate commerce. Also, it encourages different parties of dispute to engage arbitration for solving of disputes between these parties.
It should be mentioned that majority of FMCS services concerning collective bargains are free of charge. However, other services are not free of charge. Special modest charges are applied to them. Example of such services is arbitration referral.
One more example of agency discretion is mediation-arbitration. It is also known as ‘med-arb’. It is “a variation of the arbitration procedure in which an impartial or neutral third party is authorized by the disputing parties to mediate their dispute until such time as they reach an impasse”. A third party can issue a binding opinion in case of the remaining issue in disputes or in the case of the impasse. This issuance can be performed if the impasse is reached. Sometimes, this type of agency discretion can perform utilization of two different outside parties. One party performs arbitration remaining issues after completion of mediation process. The second party performs mediation of dispute. Some parties of the dispute may presume that “the process, if handled by one third party, mixes and confuses procedural assistance (a characteristic of mediation) with binding decision making (a characteristic of arbitration)”.
Med-arb can be used in narrowing issues because it makes the process of solving quicker than solving the dispute with the use of arbitration only. It eliminates the helpless focus of party’s resources on the truly difficult issues involved in a dispute in a more efficient and effective manner.
Agencies of the USA perform are the part of executive power. They perform numerous law enforcement functions. For example, the Department of Justice and its offices is responsible for enforcing criminal statutes even when the subject matter of a criminal prohibition falls within the jurisdiction of another attorney. It should be mentioned that agencies perform prosecution any administrative sides of related violations. In these cases, agencies perform prosecutorial discretion, i.e. deciding the institution or cases for investigations and performing prosecution, relating actions and time of these actions. Agencies have not got enough resources to perform complete and thorough investigations. Subject of an investigation is chosen on the basis of numerous factors. Type of violation, its severity, etc. are among these factors. Thus, agencies investigate only selected decisions and cases.
Rulemaking and Policy Discretion
Sometimes, the Congress of the USA empowers agencies to perform promulgation of different regulations for mandate. According to this background, as agency that is delegated rulemaking authority has the discretion to promulgate what rules it finds necessary, and a party cannot claim that a better rule should have been promulgated. In some cases, the Congress has no clear vision “on a subject within an agency jurisdiction” and “the agency’s decision is to be respected by a reviewing court unless that decision is unreasonable”. At the same time, if some decision is in discretion of agency, it is considered as valid except the cases when such decision is unconstitutional or ultra vires. Ultra vires decision is the decision that is outside of any legal limits or outside the scope.
Claims and Applications Decisions
Administrative agencies perform numerous functions. Claims and applications decisions are among the most relevant functions. Claims are governed by different policies and practices developed by agencies. It should be mentioned that different agencies establish different processing methods. Such factors as equal protection between individuals and due process limit discretion of administrative agencies.
Different agencies protect public and individual aspects of life. Among such aspects are economic position, health, and safety. Protective actions of agencies include seizures of goods, recalls, case-and-desist orders, suspensions of licenses, and actions of civil penalties. Example of such agency that performs protection of personal and public rights is the Food and Drug Administration. This agency has the right to perform recalling and seizure of contaminated drugs, food, and cosmetics. General office of attorney has the right to “issue a cease-and-desist order to a company that engages in deceptive consumer practices”. Physician’s right on practice medicine can be suspended by a state licensing board.
Tests and Inspections Generally
Some of inspection and testing requirements are developed by administrative agencies. There are different kinds, subjects, and purposes of testing and inspections: ‘streams may be tested for contaminants; vehicles for emissions; food or drugs for contaminants; persons for driving skills; and lawyers for competence. Administrative agencies have a discretion to choose the time and, place of testing and to decide whether to perform test on people, goods, or equipment.
In some cases, administrative agency can issue advisory opinion. This issuance is performed upon request. The goal of this issuance is to propose ‘the agency’s interpretation of law or asserts the agency’s policy, practices, or procedures’. For example, a taxing authority has the right to issue the advisory opinion under request of taxpayer.
Different agencies have different procedures of issuance of their advisory opinions: ‘an agency may wish to promulgate a regulation to respond to a recurring problem…or a fact-specific advisory opinion can be issued’ (Hall, 2012). This freedom in issuance of advisory opinions can lead to considerable problems. For example, the Internal Revenue Service (IRS) established two different procedures of issuance of advisory opinions: ‘private letter rulings, which can be relied on only by the requesting party; and formal rulings, which are for the public at a large’. Different employees of the Internal Revenue Service have the right to issue different opinions. Agents in the field of this agency have the right to issue private letter rulings. However, official higher in the IRS administration have the right to issue formal rulings.
Administrative agencies perform numerous functions. Laws and statuses do not regulate all of these functions. Majority of informal procedures are not governed by any regulations. That is why agencies perform some discretion during performing these functions.
Above were described some examples of discretions of administrative agencies. Much attention was paid to mitigation and arbitration procedures and their characteristics. Arbitration is a special kind of discretion of administrative agencies when parties of the process submit their own respective arguments and positions to third parties and everyone concerned for taking a decision. Mediation was described as a process of having a neutral third party intervene in a dispute in an attempt to assist the parties in reaching resolution.