Business Conflict Blog
At a recent meeting of the Council of the ABA Dispute Resolution Section, R. Larson Frisby of the ABA Governmental Affairs Office gave a very useful summary of certain legislation currently before Congress that could have an impact on arbitration, mediation and other forms of ADR in the U.S. With his kind permission I note some of his report here.
Dodd-Frank: The Wall Street Reform and Consumer Protection Act, signed into law in July 2010, authorizes the Securities and Exchange Commission to issue rules prohibiting or regulating the arbitration of investor disputes involving securities. However, it requires the Consumer Financial Protection Bureau to study the use of pre-dispute arbitration practices in consumer cases. In April 2013, 37 Democratic Senators sent a letter to the SEC urging that mandatory arbitration of securities disputes be prohibited, but at this time there is little indication that much fundamental change will happen in the near future. By contrast, the CFPB released in December 2013 “Arbitration Study Preliminary Results” whose “nature and tone” have led many commentators to predict that CFPB may eventually propose rules that preserve the right of consumers to participate in class action arbitrations or require opt-out provisions in pre-dispute consumer “agreements.”
Arbitration Fairness Act: This bill (H.R. 1844 and S. 878), which would invalidate all pre-dispute arbitration agreements involving employment, consumer, antitrust or civil rights claims, has been floating around for many Congressional Sessions. The current version proposes amendments to the Federal Arbitration Act and excludes from its scope franchise disputes. It is not expected to advance.
Securities Arbitration: A bill (H.R. 2998) has been introduced that would discourage the use of arbitration to resolve securities or investment disputes by amending the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940. It was referred to the House Financial Services Committee and no further action has been taken.
Labor and Employment: By contrast to the various arbitration bills seeking to restrict the practice, H.R. 169 would require mediation of issues between an employer and a newly-certified employee representative in the event of initial impasse; if the mediation is unsuccessful they would transfer the matter to FMCS for mandatory and binding arbitration. A proposed amendment to an immigration law would mandate mediation as a condition precedent to a guest worker’s filing a claim against an employer for damages. Neither bill is expected to advance.
Ombudsman Legislation: Proposals have been advanced for the creation of an Ombudsman for Immigration Related Concerns (S. 744 and H.R. 15); a Federal Financial Institutions Examination Council Ombudsman (H.R. 1553); a Federal Air Marshall Service Ombudsman (H.R. 64); a Transportation Security Administration Ombudsman (H.R. 84); and a State Home Care Ombudsman (S. 998). With the exception of S. 744, none of these bills is progressing and no further action has been taken.
Copies of the legislation identified above can be obtained by clicking here.
A young, vibrant and alive mentor once taught me that it costs no more to dream big than to dream little. And Michael Leathes is dreaming big.
With IMI Chair Deborah Masucci, Michael has recently proposed a “Global Pound Conference.” Referring to the 1976 conference at which Prof. Frank Sander shared his vision of a “multidoor courthouse,” Masucci and Leathes are calling for an event to “shake ADR out of its slumber” and “kick-start” mediation on a global scale.
And when Masucci and Leathes say global, they mean global:
Placing cross-border dispute resolution at the center of attention would help maintain focus on issues that are widespread internationally rather than on those of a local or national nature that may have little relevance elsewhere. Since we live in the Internet Age, such an event can include diverse voices by leveraging massive stakeholder crowd-sourcing on a global scale, led by some 15 or more physical gatherings in different countries. On a single day, or perhaps two days, across 20 time zones, starting in Australasia and Japan and ending in the Americas, the GPC could instantaneously identify the prevailing needs of disputants, the positives and shortcomings of the status quo, debate the options for creating change, and end with a collective action plan that secures stakeholder buy-in. That would replace what Dean Pound described as tinkering with inspiration.
The format of the sessions and the nature of participation would be radically different from anything that has been staged previously in the dispute resolution field, or in any other field, nationally or internationally. There would be a common format, addressing common issues in cross-border dispute resolution, but with the flexibility to embrace local and regional issues and cultural considerations.
The event would be interlinked by live webinar to registered participants worldwide, some choosing to gather in smaller, ad hoc groups. Delegates attending the 15 or so locations in person would each have devices enabled for use in sessions so that they could be asked to vote on propositions, some of them spontaneous, and to offer remarks and comments that could be instantly clustered and projected onto a shared screen as well as the individual screens of participants everywhere. Those participating by live Internet feed would be able to vote electronically if they have registered for that capability, and contribute comments onto the collective screens. In a matter of seconds, thousands of informed opinions could be electronically harvested, segmented by stakeholder group, geography, culture and other categories, assembled by subject matter and agglomerated into mass opinions portrayed in numbers and graphs.
The proponents are aiming at Spring 2015, and envision the involvement of business end-users and academics as well as lawyer gate-keepers and ADR service providers. They want change, and they advocate providing inspired change through a new 21st-Century method of convening.
I have been importuned by the ABA Dispute Resolution Section to remind readers of its upcoming Spring Meeting in Miami,Florida on April 2-5, 2014. And who better to be importuned by? It is a great organization and the Spring Meeting has been “the place to see and be seen” since it started in 1999. The announcement follows.
ABA Section of Dispute Resolution Spring Conference | April 2-5,2014 | Miami, FL
Join the ABA Section of Dispute Resolution in Miami for programs presented by leading ADR professionals, practitioners, and academic faculty that will address core topics and cutting-edge issues in ADR. Hear keynote plenary speeches from Judge Rosemary Barkett and Governor Bill Richardson. In addition to the plenaries, there will be more than 80 concurrent CLE programs to choose from. Earn up to one years’ worth of CLE credit. Visit the web site for details about programs scheduling, presenters, session descriptions, and hotel and travel: www.ambar.org/spring2014. Take advantage of the early bird registration rates today! The early bird rate ends February 14th.
The International Bar Association has been responsible for several definitive guidelines to assist practitioners in international arbitration. These include the 2010 Guide for Drafting International Arbitration Agreements, the 2010 Rules for Taking of Evidence, and the 2004 Guide on Conflicts of Interest. To this we now add the IBA Guidelines on Party Representation in International Arbitration, adopted by the IBA Council on May 25, 2013.
Arbitration Committee Co-Chairs Alexis Mourre and Eduardo Zuleta explain these Guidelines in the November 2013 issue of Dispute Resolution International. They explain that, as Guidelines, they are contractual in nature and apply only when the parties have agreed and where the arbitrators wish to rely upon then (having determined that they have the authority to rule on matters of party representation).
Among the situations addressed are (a) where the panel has been constituted and a party representative is subsequently appointed who creates a conflict with one of the tribunal; (b) where a party representative attempts to communicate with an arbitrator concerning the arbitration ex parte; (c) the duties of party representatives to the tribunal with respect to assertions made in submissions; (d) the responsibilities of party representatives with respect to documents and information in her possession or in the possession of her client; (e) the relationship between counsel and witnesses or experts, “specifically with the issue of witness preparation;” and (f) potential remedies for counsel misconduct.
Of particular interest to me was the treatment of counsel’s “preparation” of witnesses, a process that is fully accepted in American litigation but frowned upon elsewhere. Guideline 20 provides: ”A Party Representative may assist Witnesses in the preparation of Witness Statements and Experts in the preparation of Expert Reports.” Guidelines 21 and 22 articulate the concerns regarding the practice by providing that “A Party Representative should seek to ensure that a Witness Statement reflects the Witness’s own account of relevant facts, events and circumstances [and that] an Expert Report reflects the Expert’s own analysis and opinion.”
From time to time one dreams up “the old days” without regard to the caution that nostalgia ain’t what it used to be. But am I right that the “old days” of international arbitration practice included a reliance on documents rather than witnesses, cross-examination of live witnesses without coaching by counsel; and reports of joint experts rather than reliance on vying experts whose conclusions simply restate the arguments of the party that hired them? These attributes seem to have fallen away (if in fact they ever really existed in the first place) in favor of American-style litigation practices. The fact that they now appear in such a consensus-styled and authoritative document as the IBA Guidelines leads me to acknowledge that, in all human endeavor, one must not hold too tightly to either the past or the present.
Michael Leathes, a founder of the International Mediation Institute and former in-house counsel of high accomplishment, has written to correct our immediately prior post:
Regarding the penultimate para, actually there are examples of deal mediations out there. In fact, we have a little section on the IMI portal devoted to this (http://www.imimediation.org/deal-mediation). I have done it myself, several times, and also wrote a role-play scenario called Global Warming featuring a deal mediation which was used at a UIA programme in 2007 (http://www.imimediation.org/cache/downloads/62ip21mriuww0k0cgogcsckk/Global%20Warming%20Roleplay-2.pdf)
I am correcting the post to reflect this more accurate information, but thought it deserved its own posting. When one hears directly from the mouth of a horse, one should let others know.
It sometime sometimes seems that the community of business lawyers is divided into two broad tribes: The lawyers who handle the deals, and the lawyers who handle what happens when the deals fall apart. Unfortunately, these two tribes too seldom mix. They don’t go to the same ABA meetings, their spouses don’t dine together, their kids are on different soccer teams.
Yet each has skills that the other would benefit greatly from developing. Deal lawyers have an approach to problems that litigators would do well to adopt. And litigators use tools that deal lawyers (and their clients) would benefit from.
Deal lawyers are problem-solvers. They see the whole picture. Clients who engage them intend to make money by coming to an agreement that benefits them at the same time that it addresses the expectation of their counterparty. There is little on the table except the business, the money, the deal. Each deal lawyer is there to negotiate terms that will benefit the client, make sense to the counterparty, and get the deal done.
By contrast, litigators are gladiators. Their job is to “win.” They often don’t see (more accurately, they are not entrusted with) the whole picture. Their clients intend to see justice done, and to extract their vengeance, by making the other party wish it had never been born. There is little in the arsenal except bombs, and success is measured not by money, but by blood. The lawyer isn’t there to make money, or even to save money, but to kill.
This is true despite everyone’s acknowledgement that we don’t try litigated cases any more. More than 98% of filed cases are terminated by means other than a verdict at trial. They are withdrawn, they are dismissed, or (in the case of many business disputes) they are settled on mutually satisfactory terms that include stipulated dismissal, mutual releases of all claims, and either agreed-upon payment or reformation of the terms of the original deal.
Clients are, presumably, satisfied with the work of the lawyers who put the deal together through negotiation. Therefore it would, presumably, be advantageous to those clients if those same lawyers negotiated a solution to the problem that gave rise to the litigation – a solution that ended the litigated claim, provided for payment and/or reformation of the deal, and a speedy return to business. The mind-set of the transactional lawyer – that the client’s business is best served by negotiated deals – is highly valued in dispute resolution, and it is a pity that more transactional lawyers are not involved in resolving business disputes.
Conversely, deal lawyers perceive the negotiation process as a one-on-one game. They have a high regard for their own negotiation skills, and the suggestion that value might be added through the intervention of a neutral facilitator is not just meaningless – it is insulting. Deal lawyers want control, they want a clear field for strategy, and they want no interference or meddling. They certainly don’t want to suggest to a client that they are inadequate to close this deal themselves, and need a go-between.
By contrast, many litigators are highly attuned to the utility of mediation in devising an optimal negotiated outcome. Adding a skilled middleman in settlement negotiations can reduce transaction costs and add value in multiple ways. Mediators can assist lawyers in helping their clients to prioritize their goals, and distinguish between critical terms and those that are less important. Mediators can help to “bundle” deals, linking a “give” and a “take” in order to create trades that are of minimum cost and maximum value to both parties. Mediators can coach parties and counsel in negotiation strategies. Mediators can add rigor to the valuation process through decision trees or discounted present value analysis of outcomes. Mediators can assist parties to recognize cognitive barriers in their own or their adversaries’’ assessments, and provoke “reality testing” of positions or tactics. Mediators can develop “most favorable,” “least favorable,” and “most likely” scenarios that can have a decisive impact on the value of the claim. Mediators can urge clients to develop best alternatives in the event that settlement negotiations fail. Mediators can push disputants through impasse.
All of these skills have a place at the deal negotiation table, yet I am unaware of a single instance in the negotiation literature where a deal mediation has actually taken place. Michael Leathes, a founder of the International Mediation Institute, notes however that there are examples of deal mediations out there. In fact, IMI’s portal features a section on deal mediation and Michael reports that, not only has he served as a deal mediator himself, but he has authored a role-play scenario called Global Warming that is available for use without further permission.
The added cost of introducing deal mediation is negligible, and the risks are nonexistent. Indeed, it has been argued that deals achieved through direct negotiation are necessarily less economically efficient than deals that are mediated, simply because no party in a direct negotiation will reveal its underlying interest, and therefore that interest will not be thoroughly addressed in the final terms. One must chalk it up to a mixture of ignorance and lack of imagination. And then there’s hubris.
Deals would be more robust if a skilled, confidential mediator were included. Disputes would be briefer, and end on better commercial terms with fewer transaction costs, if the lawyers who handled them approached them as solvable problems rather than cases.
It’s time for the two tribes to start eating together.
Our correspondent and colleague Alessandro Bruni offers the following update on the ever-changing state of Italian mediation.
The new law on mandatory attempt of mediation in Italy
BY Alessandro Bruni (email@example.com)
IMI certified mediator
The Italian Law (Legislative decree no. 28/2010) defined mediation as an activity carried out by a neutral and impartial
third party – the professional mediator – with the aim to assist two or more parties in reaching a possible and amicable agreement and a resolution to a dispute.
In order to reach an agreement between the parties, the mediation must be carried out by professional and independent
(public or private) mediation providers that are accredited in a registry maintained and controlled by the Italian Ministry of Justice.
In October 2012 the Italian Constitutional Court quashed compulsory attempt of mediation inserted in Legislative Decree no. 28/2010, finding that by enacting the law, the Government had exceeded the scope of both the Mediation Directive and Law 69/2009, which empowered the Italian government to adopt a legislative decree introducing civil and commercial mediation procedures.
On 20 September 2013, the so-called “mandatory mediation” (re)entered into force into the Italian legal system.
In fact, the Italian Government, following the above-mentioned declared unconstitutionality of Legislative Decree no. 28/2010 in the section which introduced the mandatory attempt of mediation (Constitutional Court decision no. 272/2012), reintroduced such procedure, even though partially amended, by mean of Law Decree no. 69/2013 (“Decree 69/13”) on “Urgent dispositions to relaunch the economy”.
Such amended and reintroduced attempt of mediation in civil and commercial cases is considered by law as “mandatory” for some matters and for an experimental period of four years, during which the Ministry of Justice will have to carry out a follow up on the results concretely detected in the praxis.
The Law of 9 August 2013 n. 98, converting the Law Decree no. 69/2013, contains the new framework of rules regulating and promoting the use of mediation in civil and commercial disputes in Italy.
The law was enacted with the goal to ease the overwhelming caseload in the Italian courts and also to prevent additional delays in Italian judicial proceedings, no longer tolerable.
TYPES OF MEDIATION
As already provided for in the Italian legal system, three different types of mediation are established:
1. voluntary mediation, when mediation is freely chosen by the parties. It is possible in every civil and commercial matter, upon rights that are considered available;
2. judicial mediation, when the judge may order the parties of a judicial proceeding (even for cases of non-mandatory attempt of mediation), at any stage of the proceeding, but before the last hearing, to first try mediation, giving them 15 days to choose the mediation provider.
3. mandatory mediation, when a preliminary and mandatory attempt of mediation is imposed by law and becomes a condition precedent to bringing a suit in court. The subject matters are:
neighbour-disputes (condominium); property rights; division of goods; trusts and real estates; family-owned business;
landlord/tenant disputes; loans; leasing of companies; medical, paramedical and clinical malpractice; libel; insurance, banking and financial contracts.
Compared to the previous legislation, declared – as said before – unconstitutional, the cases related to the compensation for damage caused by the traffic of vehicles and boats, as well as the procedures of prior technical advice for the settlement of the dispute provided by Article 696-bis of the Italian Code of Civil Procedure are excluded.
In the case one party bring, before a judicial court, a dispute for which is required a preliminary attempt of mediation, a judge in such court proceeding would suspend the case and would invite the claimant to start an out-of-court mediation proceedings.
The new law provides for the obligation of assistance of lawyers for all the parties involved in a mediation attempt, especially for the cases in which a preliminary mediation attempt is considered mandatory.
The presence of parties’ lawyers is mandatory for all the phases of the mediation procedure, till the end.
In fact, parties’ lawyers must sign the mediation minutes and the agreement (if it has been positively produced), in order to give to them value of enforceability (the so called “titolo esecutivo”). But, before the signing, all the lawyers must control that the reached written agreement is not contrary to mandatory rules and public order.
The new law introduced a novelty: the so called “preliminary meeting” which is not a mediation meeting yet, and has to be held not later than 30 days from the filing of the mediation request.
In this phase, the mediator, the parties and their lawyers must decide together and indicate if a mediation procedure may start and may be feasible for that particular dispute.
If the parties decide not to start a mediation (negative outcome of the preliminary meeting), they will be free to go before a tribunal. In this case, the condition of admissibility is to be considered as satisfied, and they will not pay anything to the mediation provider, except the initial fees (fixed by law in € 40 plus VAT).
From the absence of a party to the mediation on unjustified grounds, the Judge may gather evidence as provided for by Article 116, Italian Code of Civil Procedure. Moreover, in the case of mandatory attempt of mediation, the Judge condemn such absent party to the payment of a sum equal to the contribution due for the filing of a petition (the so called “unified contribution”).
No compensation is due, in any case, by any party who is eligible for the free legal aid, in accordance with Article 76, paragraph. 1, of the Presidential Decree dated May 30, 2002 no. 115.
The proceeding for a mandatory attempt of mediation can lasts for a maximum of 3 months.
Any mediation is composed by some peculiar phases, described as follows:
- After a written mediating request has been submitted to an accredited mediation body (public or private), a qualified professional and independent mediator is designated; together with the date, the hour and the place in which there will be organized the preliminary meeting between the parties, the nominated mediator and the parties’ lawyers, in order to evaluate the possibility to start an attempt of mediation;
- If the first meeting (the preliminary one) finishes with the accord of the parties to commence an attempt of mediation, the mediator will start the (real) first mediation meeting (in the same day too, or in a different moment decided together with the parties).
Thereafter, two possible scenarios follow:
a) If the parties are able to reach an agreement, the mediator drafts the minutes of the meeting which must be signed by the mediator, the parties and their lawyers. In the case of the signing of the minutes and the agreement by the lawyers too, those documents will immediately be enforceable. In the case the parties are not assisted by lawyers, the minutes must be homologated by the President of the tribunal established in the district of the headquarter of the mediation provider in order to have the power of enforceability.
In any case, a party may request enforceability of the mediation agreement before the president of the tribunal of the place in which the mediation provider has its headquarters. The request must be made by depositing the mediation minutes and the attached mediation agreement. Before granting enforceability, the judge will verify that the content is not contrary to public policy or mandatory rules, and checks for compliance with formalities. Following a grant of enforceability, the mediation minutes will be enforceable for (i) compulsory expropriation; (ii) performance for delivery and release; (iii) fulfillment of the obligations to do and not to do and (iv) recognition of judicial mortgage.
In cross-border disputes, the mediation minutes are approved by the chief-judge of the district in which they are to be performed.
b) if no agreement is reached at the parties’ request the mediator can issue a non-binding proposal (he is obliged to issue a non-binding proposal if the parties, mutually, request it to him) about resolution of the dispute, which the parties may choose to accept or refuse. If either party refuses the proposal, the mediation is considered to have failed and any party may commence a lawsuit. But if the judicial decision is identical to the previous mediator’s proposal, such decision may affect the allocation of judicial expenses because the court will refuse to award all the costs and the expenses to the winning party if that party has previously rejected the mediator’s proposal. In such circumstances, the court will order the winning party to pay the losing party.
All mediators shall keep confidential any information arising out of (or in connection with) the mediation, including the fact that the mediation exists and has been conducted between the parties. In addition, Legislative Decree No. 28 of 2010 provides that mediators may not be called as witnesses and the parties may not rely on any communications made or any information collected during mediation in the subsequent judicial proceedings.
In particular, article 9, entitled ‘Duty of confidentiality’, states that anyone who works in a mediation provider accredited by the Ministry of Justice is bound by an obligation of confidentiality with respect to statements made and the information acquired during the mediation process. In addition, the same article states that the mediator shall be held to confidentiality in relation to all other parties, with regard to the statements made and to the information acquired during the caucuses (separate sessions), except with the consent of the registrant, or the consent of the party from whom the information originated.
Article 10, entitled ‘Usability and professional-secrecy’, sets forth that the statements made or the information acquired in the course of a mediation process cannot be used in a trial having the same object, even in part, that has begun, been summarized, or continued after the failure of mediation, except with the consent of the registrant or the party from whom the information originated. Furthermore, the evidence of witnesses is not allowed on the content of those statements and information.
The article further states that the mediator may not be required to testify about the content of the statements made and the information gathered during the mediation process before the court or other authorities.
In addition, in accordance with article 22 of Legislative Decree No. 28 of 2010, the mediator must report suspected money laundering or terrorist financing to the competent authority. The disclosure of confidential information by the mediator or the parties is permitted or compelled in the cases provided by article 7 of EU Directive No. 2008/52/EC.
DUTY TO INFORM
When powers of attorney are signed, the parties’ lawyers are required to inform their clients, in writing, about the mediation option and the financial incentives. Should the lawyer fail to do so, the power of attorney may be voided.
COSTS OF MEDIATION
For mediation mandated by law, there is an identical tariff for both public or private providers.
With regard to voluntary mediations, each provider may set its own rates, which must be approved by the Ministry of Justice.
Parties are jointly and severally obliged to pay the fees and the fees-increase in proportion to the value of the dispute.
The mediator is paid by the provider, with a percentage of the fee that the parties pay to the same provider.
Public rates range from a minimum of € 65 to a maximum of € 9,200.
EXEMPTIONS AND BENEFITS
The minutes of mediations with a value under € 50,000 shall be exempt from payment of registration fees.
All records and documents relating to the mediation process shall be exempt from stamp duty, and any expenses and taxes.
The poor can benefit from legal aid, and can freely participate in mediation.
The parties to mediation can benefit from a tax credit up to a maximum of € 500.
In Italy public and private mediation providers are accredited by the Ministry of Justice for conducting civil and commercial mediation upon the provisions of Legislative Decree No. 28 of 2010 (there are more than 1.000 mediation providers at the time of this writing, and the number increases every month).
Notice has recently gone out of a report and recommendations of a Working Group appointed to review the practicality of an International Mediation Center in Singapore. The news release, available here, explains that the recommendations include the establishment of a new service provider limited to mediation of cross-border disputes; the creation of a not-for-profit professional body to train and accredit international mediators; and certain legislative and judicial reforms to support efforts to establish Singapore as a center for international mediation — just as the Singapore International Arbitration Centre has gained such prominence in that field.
As it happens I write from Singapore, where I am briefly visiting in the expectation of meeting with several mediators, including Joel Lee, one of the two General Editors of a remarkable volume titled An Asian Perspective on Mediation.
Professor Lee is an Advocate and Solicitor in Singapore and a Principal Mediator at the Singapore Mediation Centre, as well as Associate Professor on the Faculty of Law at the National University of Singapore. The essays by various contributors are interesting, but the four introductory chapters by Prof. Lee and his colleague Teh Hwee Hwee are outstanding and, to me, of very great importance in the development of a method of truly global dispute facilitation.
My own interest in the limitations of the interest-based model of negotiation stem from two powerful sources of curiosity. The first is practical: Negotiators with separate cultural biases are unlikely to come to fruitful agreement (unless by sheer luck) without acknowledging and comprehending the other party’s predisposition. The other is more subjective, but far richer: Negotiators whose main objective is to get as much as they can are indulging in behaviors that in any other context they would condemn, and professionally engaging in a brand of selfishness that is inimical to the way they were raised and the way they raise their children. That is to say, there is a spiritual dissonance in the way Western negotiators perceive successful negotiation.
By providing definitive analysis of the components of Asian negotiation, Lee and Teh address the topic with candor and sympathy. For example, they postulate that three interrelated “core concepts” inform Asian conflict resolution: Confucianism, collectivism, and face concerns. These act to promote conflict resolution approaches that accept and even emphasize social hierarchy, appropriate peer-to-peer interactivity, harmony, relationships, and dignity. Without relying on stereotype, the authors demonstrate the root cultural sources for contextual negotiation and the importance of recognizing and promoting guanxi.
The implications of these profound cultural truths upon the practice of international mediation are, thus, inescapable. Face is saved when the mediation provider, rather than one of the parties, initiates the process. Mediators should have good relationships with the parties and be people of recognized commercial and social authority, not “neutrals” and not disengaged. The party representatives should be of equal “connectedness.” Mediators should exercise leadership and require professionalism and respect. Outcomes may reflect not merely party autonomy but social and commercial expectations that the mediator articulates, and embrace features that far transcend the particular transaction at issue, extending into long-term relationships. Belligerence and posturing are discouraged. The mediator is expected to inject ideas of how to move forward productively, and to insist upon outcomes that are practical for all concerned.
The editors of this book presume a level of cohesiveness between the way business is conducted and the cultural values of the region. For example, in the brief section on the impact of Confucianism on Asian business negotiation, the following four “tenets” have obvious applicability to the value of mediation:
- FIRST, social harmony is the ultimate goal of human affairs; conflict is an unacceptable form of social disruption.
- SECOND, the five chief relationships are hierarchical (father to son, ruler to subject, etc.) and fulfilling one’s role is preferable to advancing one’s own objectives. Overt expressions of anger or hostility are discouraged, especially if directed at figures of authority.
- THIRD, self-esteem is derived from the relationship of the individual with others, particularly the family, and a high degree of conformity is expected.
- FOURTH, compromise, non-litigiousness and yielding are virtuous; self-sacrifice is sometimes required for the sake of restoring harmony. Litigation is to be avoided because it signifies a lack of willingness to compromise and a failure to persuade the other side to make appropriate concessions — worse, an over-concern for one’s own interests, which involves a loss of face.
I find this analysis to be appealing on a variety of levels, not least because it portrays dispute resolution as coherent with broadly acknowledged social virtues. By contrast, I was taught as a child to say I’m sorry when I make a mistake, to acknowledge responsibility, and to share; yet American law teaches me as an adult not to speak to a person I’ve harmed, not to admit error, and to take as many cookies as I can when the plate is passed around.
Is the right word “uncomfortable”?
Prof. Lee does not see Western and Asian mediation styles as opposites. Indeed, he professes that the contribution that the essays in the book might make is to encourage broader application in principles of interest-based negotiation to include contextual interests such as those outlined above. I remain skeptical. One is coherent with accepted moral norms and the other is not. Is that not a distinction worth pursuing?
New York Law School has announced the creation of a new Program on Alternative Dispute Resolution, leading to a Certificate in the field. The Program emphasizes skills, in addition to doctrinal studies, and recipients of the Certificate are required to engage in experiential such as externship placements at ADR organizations; clinics in such fields as mediation and securities arbitration; and out-of-class simulations such as iterative role-plays or other hands-on training.
Additionally, the Program will develop a battery of non-student activities, including on-campus speaker series and “bespoke” trainings and CLE offerings to take place in New York City law firms, municipal agencies, court-annexed programs, and internal corporate legal departments.
A group of leaders of the ADR community has agreed to serve on the Advisory Committee for the Program. These include representatives of various stakeholders in the effort, including ADR organizations (CPR, AAA, IMI, JAMS), private law firms (Patterson Belknap, Debevoise & Plimpton), corporate law departments (General Electric, Edward Jones), NGOs, sitting and retired Judges, ODR specialists, and public agencies.
I am honored to have been appointed Director of the Program, as well as continuing to teach a course in Negotiation and another in International Commercial Dispute Resolution. Other faculty of the School offer courses including domestic arbitration, mediation (clinic), securities arbitration (clinic), and various negotiation courses relating to specific fields. The New York Law School Dispute Resolution Team recently won top honors in a national mediation competition, and participation on that co-curricular activity also fulfills Certificate requirements.
It is an exciting new venture, and fingers are crossed.
When I served at the CPR Institute we periodically reminded users of arbitration that the Institute had devised a procedure whereby parties could contract for appellate review of arbitration awards. I think I am correct that during my 10-year tenure no one ever availed themselves of these procedures, which on their face deprived arbitrated outcomes of one of their defining attributes — finality.
Nevertheless, one of the defining attributes of the American Arbitration Association in the past several years is its responsiveness to end-user concerns, and the Association reports that one of those concerns is a procedural safeguard against nutty awards. So it has promulgated a revised set of Appellate Arbitration Rules. The AAA explains:
The AAA’s new set of Optional Appellate Arbitration Rules (effective November 1, 2013) provides parties with a streamlined, standardized, appellate arbitration procedure that allows for a high-level review of arbitral awards while remaining consistent with the objective of an expedited, cost effective and just appellate arbitral process.
Traditionally, courts use narrowly-defined statutory grounds to set aside an arbitration award. Alternatively, these new rules provide for an appeal within the arbitration process. The appellate arbitral panel applies a standard of review more expansive than that allowed by existing federal and state statutes to vacate an award. In this regard, the optional rules were developed for the types of large, complex cases where the parties think the ability to appeal is particularly important.
Sometimes I just feel out of date. I understand arbitration to be the tool of merchants who, in the course of their business, encounter disagreements with commercial counterparties that require quick and decisive disposition in order not to interrupt the business. You are trading 1000 bales of raw cotton a day, and over the course of a year some of those 365,000 bales will either be of disputed quality or will not be paid for. So you have the cotton arbitrator make decisions. Some go for you and some against, but the bales keep rolling in and keep rolling out and over the year it all evens out. In other words, arbitration is a way to make sure cotton merchants don’t spend a lot of time on stuff other than cotton.
Clearly, not so today. Arbitration is conducted by lawyers and time is spent examining the hard drives of folks’ computers. Moreover, we’re not talking cotton bales any more. Folks are subject to arbitration — completely unknowingly — if they hook up a cable to their TV, buy a share of stock, or open a credit card account. Indeed, one of my favorite illustrations of the place arbitration has taken in the American mentality is this sign, posted on the door of a retail establishment:
(By the way, love that “American Mediation Association,” don’t you?)
So, according to the AAA, users of arbitration want an opportunity to put down their cotton bales and not only argue over one of the bales, but spend a second day arguing over the outcome of the argument they just had. Meanwhile, the bales pile up at the wharf. Surprises me, but, like I say, some days I just feel out of date.
A reminder was recently received of the ABA Dispute Resolution Section’s 11th Annual Advanced Mediation and Advocacy Institute at the Omni Hotel in Nashville, TN, on November 21-22, 2013.
Says Marnie Huff, the co-Chair:
The Institute is designed for litigators, mediators, judges and in-house counsel. Click here to register.
Each plenary panel features an expert mediator, a high-powered in-house counsel or judge, and a skilled outside counsel. Break-out session discussions are facilitated by leading mediators.Learn from Experienced Practitioners
- Proper drafting of a mediation agreement and retention letter
- Proper use of risk analysis
- Emotional and psychological issues in mediation
- How and when to use an apology
- Ethical dilemmas
- Developing and marketing a dispute resolution practice
- Advanced techniques for adding value
“It is one of the most worthwhile programs I have attended in the nearly 40 years I have been in this business.”
“The Faculty are excellent, and the opportunity for advocates and mediators to interact in small facilitated groups made this and exceptional and valuable program for mediators and advocates alike.”
“Excellent format. Produced a broad range of perspectives and experiences. Very valuable!”
Note: This program has a limited capacity of participants. Once the capacity is reached, individuals will be placed on a waiting list in case of cancellations.