Law Students to Compete in Arbitration Competition

This coming weekend, the National Arbitration Forum and the American Bar Association Law Student Division will be co-sponsoring an Arbitration Competition for nearly 200 law students from around the country. The participants will simulate an arbitration hearing involving a dispute concerning election campaign law.  Regional winners will advance to the National Finals in San Antonio in January 2009.

If you live near one of the regional sites, I would wholeheartedly suggest attending or seeing if they still require volunteer judges.  I enjoyed judged the regional ABA Negotiation Competition last year.

What Happens to Agreements to Mediate after Advanced Bodycare Solutions?

Last week, the Eleventh Circuit ruled in Advanced Bodycare Solutions, LLC v. Thione International, Inc., No. 07-12309, (April 21, 2008), that for purposes of the Federal Arbitration Act (FAA) mediation is not arbitration; therefore a party cannot use §3 of the FAA to enforce an agreement to mediate or mediation clause.* While I do not disagree with this specific, limited holding, I am still left to wonder about the enforceability of mediation clauses in light of the court’s obiter dicta.

On the one hand, the Court goes to great lengths to note that “[t]his opinion should not be read as denigrating mediation,” that they “encourage parties to make liberal use of [mediation],”** that they “encourage district courts to liberally employ any authority . . . to order mediation sua sponte.”

Despite all the pleasantries and platitudes about mediation in the final paragraph, the Court seemed to go out of its way to suggest that mediation is little more than a speed bump on the way to the courthouse, even stating that “agreements to mediate are [not] per se unenforceable.” That sounds like judicial doublespeak for “the Court really doesn’t think that mediation clauses are enforceable, but we are leaving open the possibility that there may be very limited circumstances where we may enforce them.”

More after the jump

The Georgia Office of Dispute Resolution Needs Your Help.

Yesterday, I received an email from Shinji Morokuma, the Director of the Georgia Office of Dispute Resolution. It appears that the future of the GODR is in jeopardy. Last year, the Georgia General Assembly cut their budget by 63% - $250,000. This year, the House Appropriations Committee of the Georgia General Assembly has recommended that this $250,000 budget cut not be restored for the next fiscal year. The office is currently running only thanks to a one-time grant from the Georgia Bar Foundation. Without this funding, the office may be forced to close.

The GODR is an important part of the judicial system. They oversee more than 2,200 GODR-registered and regulated mediators, arbitrators and case evaluators. In fiscal year 2008, these neutrals are projected to help resolve 19,000 civil cases – at a direct cost to the State of approximately $400,000 . If those same 19,000 cases were not resolved using alternative dispute resolution methods, they would fill the court calendars of the equivalent of sixteen (16) Superior Court judges – at direct cost to the state (for the judges, clerks, assistants, staff, etc.) of over $6 million.

If you live in Georgia, please e-mail these key legislators and ask them to restore full funding for the ODR office for Fiscal Year 2009:

Senate Appropriations Judiciary Subcommittee Members:
Senator Preston Smith (R-Rome) – preston.smith@senate.ga.gov
Senator Michael Meyer von Bremen (D-Albany) – michael.meyer@senate.ga.gov
Senator Bill Cowsert (R-Athens) – Bill.cowsert@senate.ga.gov
Senator Seth Harp (R-Midland) – sethharp@aol.com
Senator Regina Thomas (D-Savannah) – regina.thomas@senate.ga.gov

Senate Appropriations Conference Committee Members:
Senator Jack Hill (R-Reidsville) – jack.hill@senate.ga.gov
Senator Eric Johnson (R-Savannah) – eric.johnson@senate.ga.gov
Senator Tommie Williams (R-Lyons) – tommie@tommiewilliams.com

House Appropriations Conference Committee Members:
Representative Ben Harbin (R-Evans) – ben.harbin@house.ga.gov
Representative Jerry Keen (R-St. Simons Island) – jerry.keen@house.ga.gov
Representative Mark Burkhalter (R-Johns Creek) – mark.burkhalter@house.ga.gov

House Appropriations Public Safety Subcommittee
Representative Chuck Martin (R-Alpharetta) – chuck.martin@house.ga.gov

If you so desire, the GODR has drafted a form letter for you to use to urge these lawmakers to restore funding. I will keep a copy of it here.

If you have any questions about this issue, please do not hesitate to call or email me.

Could Online Mediation Really Work?

The MSN Money Blog is reporting today about a new website called VirtualCourthouse.com. The web site claims to provide

a marketplace of qualified professionals to service your case needs. Our service lets you resolve cases entirely online, lowering your costs and increasing your volume.

While I can see the benefit of online arbitration or neutral evaluation, I’m somewhat dubious about how online mediation would work. Before anyone suggests that my resistance stems from some sort of protectionist attitude, I am all for developing new ways to help parties resolve disputes. Again, I see how this could work very well for small claims arbitration. Especially, as the article states,

[cases that have only] two parties, involves a dispute over money (as opposed to other forms of relief) and is not emotionally charged, he said. Fender-bender lawsuits fit the bill; custody cases and nasty disputes between neighbors do not.

In that case, there is not much testimony to hear or documents to review. As the founder of the website states,

[if you have a] soft-tissue injury in a rear-end automobile accident [where the plaintiff] went to a chiropractor 15 times and incurred bills of $2,600. . . . It’s just an issue of how much is reasonable compensation for this individual.

But one of the key benefits of mediation is the face-to-face interaction with the participants. To listen to their positions, their interests, their needs. How is this accomplished online? Chat rooms? I handle these type of cases a few days a month in small claims court. I doubt that any of them could have been settled online.

Response to Vickie Pynchon’s Post Re: Licensing.

Over on the estimable Settle It Now blog, Vickie Pynchon solicited comments from the ADR blogosphere regarding development of licensing standards for mediators.

I tend to hold classically “liberal” free market ideals (see, e.g., Milton Friedman), so I generally chafe at the idea of granting any governmental “agency” the authority to dole out licenses. Even so, I recognize the benefit of having medical and dental licenses, or having the Bar exam or CPA exam. After some thought on the subject, however, I cannot see how a mediation licensure program would protect consumers or would prevent the abuse illustrated in Vickie’s original post.

First and foremost, all a certification/licensure program ensures is that the neutral has met a bare minimum standard, nothing more. Having certification does not guarantee quality of service. What’s the old saw? What do you call the person who graduated last in his class at med school? Doctor. Sophisticated consumers know to independently vet providers of professional services. Unsophisticated consumers do not. Licensure will not change this.

Not even a rigorous testing procedure, such as the 2-3 day bar exam or week long “boards” that doctors complete, can eliminate the problem of unscrupulous individuals taking advantage of the ill-informed. I’ve seen cases where lawyers miss simple deadlines, costing clients millions. I’ve seen cases where doctors kill patients because of sheer incompetence. Licensure did not and could not prevent these problems.

Second, there is a fundamental lack of understanding about ADR and ADR neutrals among the general populace. Would the general population even know to check to see if the ADR neutral was certified or registered with the state? I cannot believe the number of educated persons to whom I must explain in excruciating detail what it is I do. I can’t imagine that the “average Joe and Jane” knows and appreciates it either. So, even with licensing guidelines and requirements, would they know to ask? Highly doubtful.

Finally, I doubt there would ever be a single standard. Like it or not, ADR is tied to the legal system and as long as there are 50 State Bar associations governing licensure for attorneys, there will be 50 organizations seeking to control licensure of mediators and neutrals. While Georgia allows non-lawyers that meet other qualifications to act as neutrals, the Office of Dispute Resolution is “appointed by the Georgia Supreme Court.” It will be the same in other states.

I’m certain that this will not be a popular opinion among some of you, but I am a rational person and I am willing to listen to any rational argument in favor of licensing. I am certified. I trained the requisite number of hours, observed the requisite number of mediations and completed the application and ethics review process. Do I feel better off having done so? Yes, because I put my full focus and effort into it. Do I think the process would discourage or prevent an unscrupulous person who believed he could con people out of money doing it? Absolutely not.

The Wall Street Journal Suggests Mediation as Alternative in Securities Cases

I came across an interesting article today about the use of mediation in securities disputes. Oddly, it was no more than 2 hours after having lunch with a local securities lawyer who suggested I get certified as an NASD arbitrator.

I found this comment interesting and a little disturbing:

Lawyer Steven Caruso, past president of the Public Investors Arbitration Bar Association, a group of attorneys who represent investors, says a potential conflict of interest exists for mediators: “They want to do a fair job, but they’re going to get more business from the brokerage firm than the claimants’ attorneys.” That said, he and other investors’ attorneys say they know mediators that both they and defense lawyers trust.

So, which is Steve-o? Are we biased because we want repeat business or can you trust us?

Georgia Bar ADR Conference – The Psychology of Negotiation and Influence

As I mentioned yesterday, this past Friday I attended the Georgia Bar’s 14th Annual ADR Institute and Neutral’s Conference. The penultimate and most interesting presentation of the day was given by Vanderbilt Law professor Chris Guthrie entitled “The Psychology of Negotiation and Influence.” Professor Guthrie’s biography describes him as “a leading scholar in the areas of dispute resolution and decision-making” with research interests in “Behavioral law and economics; dispute resolution; negotiation; mediation; [and] judicial decision making.”

His presentation (which I hope to receive shortly in PowerPoint form) discussed several key concepts with which every negotiator and mediator hopefully should be familiar: Anchoring, Exchange, and Evaluation. Like me, I would venture to guess most are familiar with these concepts, even if unfamiliar with the technical terms and descriptions.

More after the jump

Georgia Bar ADR Conference – Early Case Assessment and Managing the Tension Between In-House and Outside Counsel

On Friday I attended the 14th Annual ADR Institute and Neutrals Conference at the State Bar of Georgia. Overall, I have to say I was disappointed with the event. I probably should have set my expectations lower, but the roster of participants included several prominent local ADR practitioners, so I expected some good, practical knowledge that I could apply to my practice. What I got was what should be basic common knowledge for any mediator (or as so many were so fond of saying, “Conflict Manager,”), and surprisingly detailed war stories.

Two panels (late in the day, of course) redeemed my faith and are worth discussing here. The first one – Early Case Assessment and Managing the Tension Between In-House and Outside Counsel – was a bit of a surprise to me. Not because I expected it to be a bad panel, but because I guess I didn’t understand the description of the topic. What I expected to be a discussion of how a mediator or neutral could deal with the inherent tension between inside and outside during a mediation was actually an excellent discussion about how lawyers, most importantly, in-house counsel, could employ ADR processes like early case evaluation and pre-suit mediation to help alleviate some of the inherent conflict and tension between the outside counsel who need to bill hours and in-house counsel who need to keep costs down.

It was very encouraging to hear the heads of the Litigation Departments of two billion dollar companies (Georgia-Pacific and The Home Depot) discuss using pre-suit mediation or early-case mediation to help resolve disputes. I have several friends who represent The Home Depot and they have told me numerous times that The Home Depot is fully committed to using mediation as a means of clearing their balance sheets of a significant portion of their litigation docket. I am not familiar with Georgia Pacific’s use of ADR to help settle cases, but their representative echoed the sentiments of Mr. Snyder from The Home Depot. And according to Mr. Snyder, he is preaching his methods to his cohorts in the “big box” retail sector.

It was even more encouraging to hear two prominent business litigators from two of Atlanta’s finest silk stocking firms agree with their in-house counter-parts and discuss everything from early case evaluation to mediation to alternative fee structures. Given what I heard, I would expect some very innovative systems and processes to come from the partnerships of these dynamic in-house and outside lawyers. Unfortunately for me, as a practical matter, I was unable to fight my way through the swarm of my fellow mediators to meet and greet any of the panel.

I’ll discuss the second panel, “Mind Games: The Psychology of Negotiation and Influence,” given by Vanderbilt Law Professor Chris Guthrie, tomorrow.

Arbitrator Rules in Favor of Falcons. Vick Must Repay $20 Million.

According to several news sources, University of Pennsylvania law professor Stephen B. Burbank has ruled that Michael Vick must repay to the Atlanta Falcons almost $20 million in “signing, option and roster bonuses” on the grounds that the bonuses constituted payments for future services which Vick cannot provide while under suspension (or as a guest of the federal penal system). Burbank had previously ruled that the Denver Broncos could not require wide receiver Ashley Lelie to repay certain bonuses already paid to him when he attempted to opt out of the last year of his contract because Lelie had not breached his contract.

The NFL’s CBA allows Vick, and the NFL Players Association to appeal to a federal judge in Minnesota.

Using ADR in Probate Disputes

I came across this interesting article by a probate lawyer promoting the use of mediation in probate disputes. He hits all the high points and provides a fair and balanced rationale for when mediation and arbitration are good alternatives to full-blown litigation. For example:

Probate disputes lend themselves to resolution in the mediation context because the costs of litigation are often prohibitive: for BOTH sides. A good mediator will take a personal interest in brokering a deal both parties can live with . . . and make it happen all in one day.

Now, I’m not certain we can promise to “make it happen” in one day, but I agree that probate disputes are one of the types of disputes best suited for mediation. Probate disputes typically involve parties with long-term, ongoing relationships – whether personal or business. Litigation tends to polarize the parties, entrenching their positions and shutting down the communication process. Mediation may encourage the parties to communicate in a more effective manner, which may lessen tension and misunderstanding.