National Arbitration Forum Ends Administration of Consumer Arbitrations

Within the last week, as part of a settlement with the Minnesota Attorney General, the National Arbitration Forum decided to voluntarily cease accepting new consumer arbitration case filings in response to mounting legal and legislative challenges.

Unfortunately, American consumers now will have no meaningful alternative to length and costly court litigation, a fact that the National Arbitration Forum acknowledged in its July 19th statement.

Sunday's statement explains that the FORUM lacks the necessary resources to defend against increasing legal challenges to arbitration on all fronts. It is important to note that the Minnesota Attorney General's complaint did not allege that arbitration proceedings administered by the FORUM were unfair. In fact, as stated in the FORUM's July 14th statement, this issuing of fair and just decisions was ensured by the independence of the neutral arbitrators who decided consumer arbitrations for the FORUM. The lawsuit instead took issue with the FORUM's communications.

Effective Friday, July 24, 2009, the FORUM will no longer accept any new arbitration case filings involving an individual consumer and business entity where the dispute involves consumer debt, credit cards, consumer loans, telecommunications services, utilities, healthcare services, or consumer leases.

This change does not impact the FORUM's administration of Internet domain name disputes, personal injury protection claims, and cargo disputes that are under the supervision of the Internet Corporation of Assigned Name and Numbers, the New Jersey Department of Banking and Insurance, and the American Moving and Storage Association, respectively.

Faced with Fiscal Crisis, States are Cutting Court Budgets and Choosing Low-Cost Mandatory Mediation

Mediation can help overburdened court systems resolve foreclosure disputes says commentator Nick Thomas, Esq. in a TCPalm.com story (Mediation loosens the budget squeeze for courts and litigants, 6/23/2009).

Mandatory mediation programs have began in Indian River, Martin, St. Lucie, and Okeechobee counties in Florida. Thomas supports this move and thinks the system could serve as a model for other disputes:

A better system would be to follow the lead of the foreclosure program and refer divorce cases out to mediation immediately upon filing.

Even better, if the public knew more about the benefits of mediation, informed parties with disputes of all sorts would seek out mediation before they even considered filing in court.

In other states, foreclosure mediation is a mixed bag. The July edition of Court ADR Connection highlights proposed legislation to create foreclosure mediation programs in multiple states. Connecticut, Florida, Indiana, Maine, and Nevada passed mediation bills, while proposed foreclosure mediation bills in Minnesota and New Mexico were not successful.

5 New ADR Blogs to Add to Your Reading List, By Diane Levin

We are pleased to share from alternative dispute resolution professional Diane Levin the following "Top 5 Tuesdays" post.

5 New ADR Blogs to Add to Your Reading List

Over four years ago, I launched my mediation blog, Mediation Channel. At that time just a handful of ADR practitioners published blogs. Since that time, there's been an exponential increase in the number of ADR practitioners and scholars who have turned their talents for writing to the medium of blogging, where many now share their best thinking. The rest of us benefit: no longer dependent upon subscription-only scholarly journals or member-only web sites for news about the ADR field, any ADR practitioner with an internet connection and a computer today can access the latest news and ideas from the cutting edge of practice and scholarship, thanks to these bloggers.

The unofficial taxonomist of the ADR blogosphere at my other site, ADRblogs.com, I've been tracking and cataloging bloggers world-wide who write about ADR, negotiation, and conflict resolution. It gives me the ability to introduce new and worthy ADR blogs to readers – like the following five blogs. I hope you enjoy them:

• Loree Reinsurance and Arbitration Forum provides discussion and insights on reinsurance litigation and arbitration and is published by New York-based boutique commercial and industry arbitration firm Loree & Loree. This blog demonstrates quality writing on newsworthy topics that distinguish the top ADR blog; a recent example is "The AAA Commercial Rules and the Pig in a Poke: Gilbert Street Developers, LLC v. La Quinta Homes, LLC".
• Business Conflict Blog provides perspectives on managing the business disputes that companies around the globe face, a focus reflected in posts such as "Contract Drafting for Dispute Management", aimed for the transactional lawyer seeking to protect the value of the deal. This blog is written by F. Peter Phillips, a commercial arbitrator and mediator based in New Jersey.
• Mediation Matters is published by California lawyer and mediator Steve Mehta, who has translated his experience litigating and mediating complex cases into engaging posts that share his reflections on ADR practice, including this one on his experiences going green to conserve energy at his office.
• Cross Collaborate serves as a learning resource for all those involved in shaping or influencing governmental decisions, offering commentary on leading issues and innovative practices. It is published by John Folk-Williams, a practitioner and writer in the field of public policy collaboration and interest-based negotiation. His thoughtfulness as a practitioner is evident in posts like "Power Differences, Consensus Building & Collaborative Networks".
• Disputing: Conversations about Dispute Resolution is a dependable source for news, updates and commentary on the law pertaining to arbitration, with a special focus on Texas demonstrated by posts such as "Texas HB 2256 Makes Possible a New Mediation Procedure for 'Balance Billing'".

I'd like to extend my thanks to the National Arbitration Forum Blog for the opportunity to contribute today to this great new weekly feature, "Top 5 Tuesdays". I count you folks among my oldest friends here in the blogosphere – I have always appreciated your collegiality and your support. NAF Bloggers really get the "social" in social media – you’re the best of neighbors here on the web. Cheers!

Thank you Diane for the kind words and for taking the time to recommend five new blogs to our readers for "Top 5 Tuesdays"! Without a doubt, you have significantly guided us in our ADR blogosphere practices. And, a big thank you for the nudge to join Twitter!

Stay tuned for Top 5 Tuesday posts from Victoria Pynchon and Disputing's Victoria Van Buren in the upcoming weeks. To participate, contact us for more details.

The National Arbitration Forum Makes Blawg Review #220

Housed on Overlawyered.com, this week's law blog review rounded up some highlights of the past week from around the legal blogosphere, including a guest post to the National Arbitration Forum Blog from last Tuesday. Thanks to Walter Olson for including us in the "international" section:

Kenneth Cloke tells "Why We Need to Mediate [International] Environmental Conflicts".

Other fellow ADR bloggers made the review. Take a peek at Blawg Review #220. Here's our post from last week:

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Reasons Why We Need to Mediate Environmental Conflicts, By Kenneth Cloke

This post is part of our "Top 5 Tuesdays" series.

We are pleased to share the following post by Kenneth Cloke, President of Mediators Beyond Borders.

Mr. Cloke, pictured at right, shares 5 reasons why he thinks mediators are needed to resolve environmental issues:

5 Reasons Why We Need to Mediate Environmental Conflicts

1. As human populations have become more numerous and technologically advanced, we have increasingly wasted precious exhaustible resources, despoiled and desecrated our environment, and created the preconditions for mass extinction and global catastrophe.

Read on...

Court-Ordered Mediation Is a Good Alternative to Trial

In his weekly law column at Victoria Advocate, University of Houston Law Professor Richard Alderman explains mediation to a Texan wondering:

I filed a claim in small claims court. I have been told that before my trial I will have to mediate the case. What is this? Do I have to do it? How much does it cost?

He explains that mediation is a form of alternative dispute resolution that gives the parties an opportunity, with a mediator, to work things out before a trial. He opines that court-mandated mediation "is always a good idea" because it does not cost anything, and settling a claim is almost always better than taking the chance on a trial.

(Mediation is an alternative way to resolve disputes, 6/25/2009)

Case Study: How One Medical Center Better Serves Their Patients, Saves Money with ADR

Chatón T. Turner, assistant counsel at the University of Pittsburgh Medical Center, documents her experience with the Medical Center's mediation programs in Bringing Mediation In-House Is Cost-Effective in More Ways Than One (Legal Intelligencer, 6/25/2009). Five years ago, the hospital designed two ADR programs to give their "customers" (i.e., patients or families) additional legal recourse – mediation — against the hospital.

1. Claims Mediation Program - Mediation used to resolve some lawsuits filed against the system by customers.
2. Intermediation Program - Mediation used to resolve complaints and grievances filed with the Medical Center's patient relations department.

Previously, the customers' only option if the grievance process was unsuccessful was patient-unfriendly litigation. Now, says Turner, the hospital sees a decrease in legal costs from mediating disputes involving patient care. Moreover, because healthcare disputes are personal and emotional, mediation gives the opportunity to tell one's story without doing so in public court. Mediation also allows for efficient resolution of disputes meaning parties can focus on their health instead of their dispute.

Forbes Articles Defend Securities Arbitration

Amidst a sea of articles about securities arbitration, Kevin Carroll and Seth E. Lipner, each in June Forbes articles (Arbitration Works, 6/17/2009 and Should Securities Arbitration Be Mandatory?, 6/29/2009 , respectively), defend arbitration for the resolution of securities industry disputes between investors and securities firms. See SEClaw.com for a look at Professor Lipner's article.

Mr. Carroll, in his article, makes several points in favor of pre-dispute arbitration agreements:

• Arbitration Process is Quicker. "Arbitration cases are resolved 40% faster than court cases, saving investors time and money."
• Good Option for Investors with Small Claims. "Specifically, 25% of all claims are for less than $10,000, a sum for which litigation is usually not cost effective."
• Investors Get a Fair Shake in Arbitration. "The percentage of claimants who recover--either by award or settlement--has held steady during the past several years, and in 2006 was 66%. In addition, between 1995 and 2004, investors' average inflation-adjusted recoveries in securities arbitration have followed a generally increasing trend, from approximately $25,000 in 1995 to over $50,000 in 2004."

Carroll is managing director and associate general counsel for the Securities Industry and Financial Markets Association. Many of his points were informed by a study that SIFMA conducted with its Legal and Compliance Division.

5 Reasons Why We Need to Mediate Environmental Conflicts, By Kenneth Cloke

This post is part of our "Top 5 Tuesdays" series.

We are pleased to share the following post by Kenneth Cloke, President of Mediators Beyond Borders. Mr. Cloke, pictured at right, shares 5 reasons why he thinks mediators are needed to resolve environmental issues:

5 Reasons Why We Need to Mediate Environmental Conflicts

1. As human populations have become more numerous and technologically advanced, we have increasingly wasted precious exhaustible resources, despoiled and desecrated our environment, and created the preconditions for mass extinction and global catastrophe.
2. The environmental problems we currently face can no longer be solved by individual nations, or by using military, bureaucratic, or autocratic methods that only increase opposition and delay remedial efforts. These problems now demand the collective attention of everyone.
3. To implement sustainable solutions to global environmental problems, all the disparate races, religions, cultures, societies, organizations, political entities and institutions on the planet need to learn better ways of working together to solve our common problems.
4. To do so, we need to create better ways of communicating across borders and improved techniques for collaboratively negotiating our differences, engaging in open and honest dialogue, and resolving environmental disputes equitably without warfare or coercion.
5. Mediation and alternative dispute resolution (ADR) techniques encourage fair, respectful, participatory, and democratic ways of communicating, solving problems, negotiating collaboratively, engaging in constructive dialogues, and resolving conflicts internationally based on consensus. Without these methods we will be unable to sustainably solve our problems or survive, and for these reasons, it is critical that the world's nations adopt mediation and ADR as the primary methods for resolving environmental conflicts.

Thank you Ken for guest blogging about the importance of mediators in the discussion on climate change!

Stay tuned for Top 5 Tuesday posts from Diane Levin, Victoria Pynchon, and Victoria Van Buren in the upcoming weeks. To participate, contact us for more details.

Guidelines for Discovery in Domestic Commercial Arbitration

Begins a new arbitration report issued by the New York State Bar Association (Report on Arbitration Discovery in Domestic Commercial Cases, June 2009):

Arbitration has been in use for millennia, and has long been on the scene in the United States. George Washington’s will had an arbitration clause, and some labor disputes made use of arbitration beginning in the early 1800s.

In addition to the following guidelines, the report also includes factors an arbitrator should consider in determining the appropriate scope of discovery, including the nature of the dispute, the characteristics of the parties, the terms of their agreement, the relevance of requested discovery and the parties' reasonable need for it, and matters of privilege and confidentiality.

Five Arbitration Discovery Guidelines for Arbitrators (from the report announcement):

1. Arbitrators must exercise judgment to produce a discovery regimen that is appropriate to the given case.
2. The ground rules should be clearly established in the period immediately following the initiation of the arbitration. The arbitrator should promptly study the facts and the issues and be prepared to preside over the early stages of the case in a way that will lead to an expeditious and fair process.
3. While there is no universal objective standard for the appropriate scope of e-discovery, an early order setting reasonable bounds for e-discovery can be an important first step in limiting such discovery in a large number of cases.
4. The arbitrator must maintain control of the proceedings and move the case forward to an orderly and timely conclusion. The arbitrator has many tools that can be used to ensure fairness and prevent disruption where one side may withhold its cooperation. Those tools may include, for example, the making of adverse factual inferences, the preclusion of proof, and cost allocation.
5. It is essential that arbitration discovery disputes be resolved promptly and efficiently because exhaustive discovery motions unduly extend discovery and significantly add to the cost of the arbitration.

The NYSBA's Dispute Resolution Section performed research, conducted interviews with members of the arbitration bar and representatives of arbitration organizations, and reviewed other literature on the subject of arbitration discovery and work done by JAMS; the International Centre for Dispute Resolution/American Arbitration Association; the Chartered Institute of Arbitrators; the CPR International Institute for Conflict Prevention and Resolution; the American College of Trial Lawyers; the International Bar Association; and the College of Commercial Arbitrators.

Top 7 Arbitration Agreement Elements to Ensure Enforceability

This post is part of our "Top 5 Tuesdays" series. Have an idea for a "Top 5 Tuesdays" post? Let us know!

Human resources policy and compliance experts Personnel Policy Service, Inc. recently covered the topic of employment arbitration. According to their HR Matters e-tips newsletter from this week, Seven Steps to Effective Arbitration Agreements, more employers have turned to arbitration as a means to settle employment disputes quickly and cost-efficiently.

The e-tips writers recommend, based on what they've seen in recent court decisions, the inclusion of the following seven elements when drafting fair, enforceable arbitration agreements.

1. Clear delineation of claims subject to arbitration.
2. No limitation on statutorily-imposed remedies.
3. Adequate discovery.
4. Safeguards to ensure neutral arbitrators.
5. No unreasonable employee fees or costs.
6. A written decision containing sufficient detail to ensure meaningful judicial review.
7. Adequate consideration for the arbitration agreement.

To read more of their drafting tips, access Personnel Policy Service, Inc.'s Seven Steps to Effective Arbitration Agreements.