THE INNOVATION OF LAY PARTICIPATION IN THE CHILDREN'S HEARING SYSTEM IS UNDER CLOSE SCRUTINY. POWERS GIVEN TO THE THREE LAY PANEL MEMBERS WHO PRESIDE AT THE HEARINGS ARE CONSIDERABLE. ONCE THE FACTS HAVE BEEN ESTABLISHED, THE PANEL MEMBERS MUST DECIDE WHICH MEASURES ARE APPROPRIATE IN EACH CASE. THEY CAN SEND THE CHILD TO A STATE INSTITUTION FOR AN INDEFINITE PERIOD, SUBJECT TO PERIODIC REVIEW AND APPEAL TO THE COURTS. ALTERNATIVELY, THEY CAN PLACE A CHILD UNDER THE SUPERVISION OF THE SOCIAL WORK DEPARTMENT AND MAY RECOMMEND SPECIFIC CONDITIONS OF THE SUPERVISION. THE VIEW THAT THE CHILDREN'S HEARINGS ARE DIRECTED TOWARDS TRAINING AND EDUCATION BUT NOT PUNISHMENT JUSTIFIES THE EXTENSIVE DISCRETION ALLOWED PANEL MEMBERS. DECISIONS ON THE FUTURE WELFARE OF THE CHILD AND HOW TO ALTER HIS BEHAVIOR ARE NOT TO BE MADE BY APPLYING FIXED RULES BUT BY CONSIDERING EACH CASE IN ITS PARTICULAR SETTING. THE 'TREATMENT' PHILOSOPHY ALSO JUSTIFIES DECISIONS MADE BY THOSE SELECTED NOT ON THE BASIS OF LEGAL, MEDICAL, OR SOCIAL QUALIFICATIONS, BUT BECAUSE THEY ARE CONSIDERED QUALIFIED THROUGH KNOWLEDGE OR EXPERIENCE TO EVALUATE CHILDREN'S PROBLEMS. THE EXCLUSION OF PUNISHMENT IN ALL CASES IN INAPPROPRIATE. PUNISHMENT MAY BE IN THE CHILD'S BEST INTERESTS WHEN HE IS REFORMED BY IT. IN ADDITION, THE ESSENTIAL AND ORIGINAL FUNCTION OF THE HEARING SYSTEM IS TO PROTECT THE WELFARE OF OTHERS WHOSE INTERESTS ARE AFFECTED BY THE DAMAGE DONE AND THE HARM INFLICTED ON SOCIETY BY JUVENILE DELINQUENCY. IT IS THEREFORE MISLEADING TO SAY, AS PANEL MEMBERS TEND TO, THAT THE FUNDAMENTAL PURPOSE OF THE SYSTEM IS TO ACT SOLELY OR EVEN PRIMARILY. 'IN THE BEST INTERESTS OF THE CHILD.' LAY PARTICIPATION CAN ONLY BE EFFECTIVE WHEN DETERRENT OR REFORMATIVE PUNISHMENTS ARE INCLUDED AS POSSIBLE RECOMMENDATIONS AND WHEN PANEL MEMBERS VIEW THEIR FUNCTION IN A JUDICIAL AS WELL AS A SOCIAL CONTEXT. FOOTNOTES ARE PROVIDED IN THE ARTICLE. (LWM)