How to Tank a Mediation Without Even Trying

By James P.S. Leshaw

LeshawEvery so often, you may want to tank a mediation. Maybe you know in advance it can’t settle. Maybe the blood is so bad between lawyers or clients that you just want to teach a lesson to the other side.  It could be that you think the judge or arbitrator is really enjoying all of the discovery disputes or doesn’t have enough to do. Whatever the reason, based on my experience as a mediator, here are the top ten ways to blow a mediation (as well as some light reading).

  1. Promise your client (preferably in writing) that there is no way he can lose at trial. Also, be sure to under-estimate the cost of the litigation both in terms of the cost of fees and expenses as well as the client’s expected time-commitment and anticipated loss of sleep. This should sufficiently reduce the client’s incentive to settle at mediation.
  2. Do not submit a mediation statement to either the mediator or the other side. The reality is that the mediation statement serves very little purpose other than to educate the mediator and the other side to the strengths of your case. If you do decide to deliver a mediation statement anyway, consider using it as an opportunity to educate the mediator on how unreasonable the other side is (though this should be obvious to any experienced mediator as the other side has not yet caved to your demands). You may also choose to inundate the mediator and other side with copies of pleadings you have already filed in the case, with no explanation as to their relevance.
  3. Do not personally attend the mediation – your attendance might send the message that you are serious about settling. Instead, send a junior associate who has had little or no involvement with the litigation, who does not know the factual or legal issues and who does not have the confidence or trust  of the client. This will help to ensure that the mediation is not successful.
  4. Be efficient when preparing for the mediation (assuming you decide to attend). Do not focus on the law or the facts – the other side must already be familiar with these or be too dense to understand your version of the law or the facts. Focus on the important stuff like making the mediation personal.  Be prepared to embarrass opposing counsel by talking about their procedural gaffes in this case or their losses in other cases. This is really just constructive criticism.
  5. Do not make an opening statement at the mediation – simply state that your position is already clear. Should you decide to make an opening statement, be sure to point out how unreasonable the other side has been for not simply giving in, explain you are not prepared to compromise in any way, but have a “take it or leave it” offer. Also, don’t forget to remind the other side and the mediator that you have scheduled only one hour for the mediation because you need to be back at your office to take a phone call.
  6. Do not bring your client to the mediation. Instead tell the other side that the client is available by telephone or that you already have settlement authority. Should your client inconveniently decide to show up at the mediation, make sure he does not participate in the mediation. You’re being paid to attend the mediation so you should respond to any questions or comments made to your client by the mediator or the other side. This is your case after all.
  7. If your client is the defendant, cry poverty but do not provide any financial information to support the claim.
  8. Do not admit that your case has any weaknesses at all, including in a private session with the mediator. So long as you bury your head in the sand, neither the mediator nor the other side will realize there is a potential chink in your client’s armor.
  9. Yell, scream and pound on the table so everyone in the room knows you really mean what you are saying.
  10. If it looks like the case may settle despite your best efforts, be prepared to pack your bag and leave. The best exit is a dramatic exit.

About Jim Leshaw:

Jim Leshaw is a mediator and arbitrator based in Miami and Key Biscayne, Florida.  He handles a wide variety of commercial disputes throughout the United States, Latin America and Europe.  He also sits on the board of directors of Avianca Holdings, S.A. (NYSE:  AVH), the Latin American based airline. He can be reached at Jim@LeshawLaw.com.

This post originally appeared in Law360, and was republished with permission.

CPR Philadelphia Regional Meeting at Stradley Ronon on Effective Mediation Strategies for Client and Counsel

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By Anna M. Hershenberg, Esq., Vice President, Programs and Public Policy, CPR

On April 10, 2018, the International Institute for Conflict Prevention and Resolution (“CPR”) held its first Philadelphia regional meeting at the offices of Stradley Ronon Stevens & Young, LLP, a long-standing CPR member and first recipient, more than a decade ago, of CPR’s “Law Firm Award for Excellence in Alternative Dispute Resolution” for the firm’s commitment to principled and creative conflict management and resolution.

The meeting drew more than 130 people, with the attendees split evenly between in-house counsel from Fortune 500 companies, trial attorneys from the nation’s top law firms, and highly sought-after neutrals. The prominent attendees included 15 former judges and general counsels and chief legal officers from Aetna Inc., Comcast Corp., Deloitte, General Motors Corp., GlaxoSmithKline, Hewlett-Packard Co., Independence Blue Cross, Johnson & Johnson, KPMG LLP, Merck & Co., Monsanto Co., Pfizer Inc., TE Connectivity Ltd., Triumph Group. Inc., and Verizon Communications Inc., among others.

The program, “Effective Mediation Strategies for Client and Counsel,” was divided into three parts.  Bennett G. Picker, Senior Counsel at Stradley Ronon, CPR neutral and member of CPR’s Council, and Noah Hanft, President and CEO of CPR, kicked off the meeting with welcoming remarks.

Wharton School lecturer and mediation trainer Eric Max then led the first part of the program, “Negotiating Strategies for Clients and Counsel,” by facilitating an interactive discussion among the in-house counsel, outside counsel and mediator audience members.  Professor Max outlined the multiple layers of negotiation occurring at any given time during a mediation.  He challenged the audience with provocative questions, such as pressing each stakeholder to reveal if they lie to each other during the course of a mediation and exploring the reasons for their conduct.

After a networking coffee break, the program resumed with Sophia Lee, Partner at Blank Rome and former Chief Litigation Counsel at Sunoco Inc., skillfully moderating a panel discussion on the keys to effective preparation and advocacy with panelists Francine Friedman Griesing, Managing Member of Griesing Law; Scott S. Partridge, Vice President of Global Strategy at Monsanto and a member of CPR’s Board of Directors; and John Wright, Senior Vice President and General Counsel of Triumph Group.  Of particular interest to the attendees was Mr. Partridge’s explanation of how he created a relationship-based conflict identification and resolution process to shrink Monsanto’s – and then the entire industry’s – litigation portfolio.

The highlight of evening came when the Honorable Timothy K. Lewis (Ret.), Counsel at Schnader Harrison Segal & Lewis LLP, former federal circuit and district court judge and Chair of CPR’s Diversity Task Force, and Mr. Picker led the third part of the program, “Promoting Diversity in Mediation.”  Mr. Picker – who has been championing diversity and leading by example for decades – provided concrete steps that in-house counsel, outside counsel and mediators can take to drive diversity and inclusion in the dispute resolution field.  Judge Lewis then delivered deeply moving and personal remarks on his experiences as a black attorney and federal court judge in a predominately white legal world.  He challenged the audience to mentor colleagues from historically disadvantaged backgrounds, reminding them that everyone got to where they are by standing on someone else’s shoulders, and “that talent is distributed equally across all races and ethnicities and genders and identities. Opportunity is not.”

He set out his vision for what true workplace inclusion should look like and how to achieve it: “The goal here is not to be included simply because of race or gender; the goal is not to be excluded simply because of these qualities. But in order for us to get there, we have to make a concerted effort, and we must challenge ourselves, our assumptions, and sometimes each other.”  Judge Lewis’s remarks, which received a standing ovation, will appear in Alternatives to the High Cost of Litigation, CPR’s monthly international newsletter (see altnewsletter.com).

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Pictured: Bennett G. Picker and Honorable Timothy K. Lewis (Ret.) 

The evening concluded with closing remarks by Thomas J. Sabatino, Jr., CPR Board Vice Chair and Senior Vice President, General Counsel, Law & Regulatory Affairs at Aetna and a networking cocktail reception.

In short, the CPR Philadelphia Regional Meeting introduced attendees to what CPR does best: create opportunities for high-level conversations between inside and outside counsel and provide businesses with the tools to cultivate a corporate culture that embraces diversity of perspective, and early and creative ways to prevent and resolve business disputes.

 

About CPR

CPR is an independent nonprofit organization that, for more than 40 years, has helped global businesses prevent and resolve commercial disputes effectively and efficiently. CPR’s membership consists of top corporations and law firms, academic and government institutions, and leading mediators and arbitrators around the world. CPR is unique as: (1) a thought leader, driving a global dispute resolution culture; (2) a developer of cutting-edge tools and resources, powered by the collective innovation of its membership; and (3) an ADR provider offering innovative, practical arbitration rules, mediation and other dispute resolution procedures, and neutrals worldwide. For more information, please visit www.cpradr.org.

 

About Stradley Ronon

Stradley Ronon attorneys have served with distinction as neutrals, both independently and under the auspices of ADR provider organizations such as the American Arbitration Association, the International Centre for Dispute Resolution, and the International Institute for Conflict Prevention & Resolution (CPR). Stradley Ronon attorneys have built a reputation for fairness and creative problem solving and are highly regarded for their ability to understand complex commercial transactions and cutting-edge technologies. In recognition of its commitment to principled and creative conflict-management and resolution, Stradley Ronon’s ADR practice group received CPR’s inaugural Law Firm Award for Excellence in Alternative Dispute Resolution. For more information, please visit https://www.stradley.com/

THE MASTER MEDIATORS/ Part I: On Joint Sessions

mastermediators

One of the panels at CPR’s recent annual meeting in Atlanta featured three master mediators: Eric D. Green, of Resolutions, LLC; Hon. Layn R. Phillips, Phillips ADR; and Linda R. Singer, Esq., a JAMS and CPR Neutral.

Guided by moderator Jana Litsey, Senior Executive Vice President and General Counsel and Secretary of The Huntington National Bank, our panelists shared views and best practice tips on the ADR process they know so well. This post, the first in a series, will focus on the almost curiously controversial topic of joint sessions.

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“We call it the disappearing joint session,” said Eric Green. “As all parts of a mediation are potentially valuable, I think the trend away from the joint session is a big loss, reflecting a misunderstanding of its potential and use and value. Of course, there are no rules in mediation except that there are no rules in mediation. Every case is different.”

Green noted that lawyers will typically insist no joint session is needed and would in fact be a waste of time—especially if they have him only for one day—because the case is mature and well known to both sides. While he agreed that those would be potential negatives, he has observed over time that the parties rarely in fact understand each other’s cases. Joint sessions have the potential to begin to close that gap.

“When you think about it,” he explained, “the joint session is your best and last opportunity to speak directly to other side. They are your audience and, to have a successful outcome, you must get them to agree to something you will accept. Assuming the session has been properly prepared—with private telephone calls between you and the mediator ahead of time, and with mediation statements exchanged—this is the start of a day’s worth of negotiation and your chance to get your message across to the other side (hopefully someone with real authority). This is your opportunity to establish a connection, demonstrate that you are prepared to be reasonable if they are, and to address the strongest arguments in the other side’s mediation statement.”

Joint sessions also serve an important purpose for the mediator, Green stressed. “If I need to say something to the other side at 5 p.m., I really want you to have said it at 9 a.m. so I can tie my message back to yours. It gives me a mechanism to deliver what is sometimes tough feedback to the other side by deflecting some of it, which can be very helpful.”

Green cautioned, “This is not an opportunity for you to get some emotional satisfaction by beating up on the other side. So don’t waste your time repeating your strongest points or engaging in threats or bombast. Don’t try to stand up and impress your client. And don’t try to impress the mediator—they are not the judge and jury.”

Green summed up, “No one has ever stood up in joint session, like in Perry Mason, and said, ‘I get it now, I’m guilty. I’ll withdraw my case.’ But it starts the process of people beginning to understand risk and see things from the other side’s perspective.”

Jana

JAMS and CPR Neutral, Linda R. Singer, described what she sees as a clear regional split, with colleagues on the West Coast coming down on the side of never seeming to utilize the joint session process, with East Coast colleagues being much more open to it.

“Some judge mediators are unaccustomed to managing conflict,” Singer surmised. “It makes them nervous.” But she agreed that the joint session process can be a real opportunity. “The hardest thing,” she described, “is when I convene a conference call and they tell me they’ve all agreed and don’t need a joint session, because it’ll take us until after lunch to get back to where we are in the process now, but then at 4 pm in the afternoon we are still saying the same things we were saying at the start of the day.”

Our third panelist, Layn Phillips, of Phillips ADR, was less enthusiastic about joint sessions than his colleagues. He tends to advocate for shared or exchanged mediation briefs and reply submissions, he explained, and holds the view that mediators mainly earn their money in private caucus sessions. But he did agree that there were circumstances (e.g., in some securities cases) where the joint session, or what he likes to call the “targeted session,” is helpful on topics like damages.

“You might have 25-page opening submissions and several reply briefs,” Phillips explained, “but only three paragraphs dealing with damages, so it would not be uncommon for me in this situation to tell the parties I wanted a focused targeted joint session on damages. This may not necessarily be an opening joint session, but one which could take place later in the day.”

Another example might be if a case is very close to trial. Sometimes this can be a helpful reality check for the clients. “Much depends on your client representatives,” Phillips added. “If they are very sophisticated and prepared, and you’re convinced from pre-mediation submissions and calls that they know the case, having them sit there while a very talented trial lawyer takes their case apart is not necessarily helpful.”

“As everyone here knows,” Phillips summed up, “we’ve all been to joint sessions that are incendiary, or that cover ground that is not only well ploughed but well fertilized, so I try to be very focused on when and under what circumstances I recommend this process.”

Eric Green reported also finding joint sessions to be useful when there are complex technical issues, such as those arising in construction, design or financial cases. In fact, while this is unusual, he reported having a joint session last as long as a week in a case involving technical exchanges involving nuclear plants. “If the parties are insisting on a principles-based and merit-based approach to resolution,” he concluded, “joint sessions can provide an opportunity to demonstrate that you’ve heard the merits of the case. Then the parties can start discussing dollar amounts.”

Layn Phillips provided the final word on this topic, noting that it is not uncommon for him to hold joint sessions late in the day, particularly on non-monetary terms. “The last thing you want to do is to have a quiet, dignified search for a number, and then find out that the parties disagree on fundamental terms such as indemnification or non-monetary points that will turn out to have monetary value.”

Stay tuned to CPR Speaks for more tips from our master mediators, and more great content from AM18…

 

CPR Releases New Mediation Best Practices Guide for In-House Counsel

By Erin Gleason Alvarez and Rick Richardson

As co-chairs of the Mediation Committee, we are pleased to announce the release of the Mediation Best Practices Guide for In-house Counsel: Make Mediation Work for You.  The Guide will be launched as part of the CPR Institute Annual Meeting in Atlanta from March 8 through 10, 2018.

Make Mediation Work for You was inspired by conversations among in-house counsel that have arisen in the Committee.  What is the best way to convince counterparties that mediating early is a good thing?  How do you best prepare for mediation?  Should you always accept a counterparties’ suggestion on the mediator?  What is the best way to keep negotiations going if the mediation concludes without settlement?

The Guide answers all of these questions and includes insider tips from in-house counsel throughout.  Make Mediation Work for You begins with a discussion on when to contemplate mediation and then takes the in-house reader though every step in the process: from convening the process and making negotiations plans before the in-person session to creative solutions for overcoming impasse and structuring a settlement agreement.

Make Mediation Work for You will undoubtedly be a valuable resource for CPR members.  We are grateful to the Mediation Committee members for their efforts in creating this important guide, most notably John Bickerman, David Brodsky, David Burt, Steve Comen, Steve Gilbert, Duncan MacKay, Chris Mason, Judy Meyer, Meef Moh, and Mike Timmons.

We look forward to seeing many of you at the Annual Meeting next week!

 

Erin Gleason Alvarez and Rick Richardson co-chair the CPR Mediation Committee.  Rick serves as Vice President and Associate General Counsel, Dispute Resolution and Prevention for GSK.  Erin is the former Global Head of ADR Program for AIG; she now has her own mediation and arbitration practice and is a member of the CPR Panel of Distinguished Neutrals

International Commercial Mediation Update: UNCITRAL Working Group II Moves Forward on Convention and Model Law

erinBy Erin Gleason Alvarez

The United Nations Commission on International Trade Law (UNCITRAL) Working Group II met at its 68th session in New York from February 5 through 9 to finalize draft convention and model law documents. The focus of these instruments is on the enforcement of international commercial settlement agreements resulting from mediation.

Working Group II was initiated by UNCITRAL in 2014 in order to explore whether it is feasible to develop mechanisms for the enforcement of mediated agreements in international commercial disputes.  Since then, there have been several sessions to explore the most appropriate path forward.

The need for this Working Group grew out of concern that parties to mediated agreements may not be afforded the same protections as those available in international commercial arbitration. The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention), entered into force in 1959, obligates States to recognize and enforce arbitral awards made in other contracting States.

To accommodate parties’ desire to mediate international commercial disputes, practices have emerged to try to transform a mediated settlement agreement into an arbitral award. In addition to practical concerns over enforceability, these steps add significant process to mediation, which parties tend to like because it is simpler than arbitration (among other reasons). Other recourse for enforcement of mediated settlements in international commercial disputes can include pursuing claims for enforcement of the agreement under contract law. But this may also be difficult in the international context, depending upon the jurisdiction where enforcement is sought. Protracted cross-border litigation to enforce a mediated settlement is counterintuitive at best.

Thus the proposed model law and convention seek to alleviate these concerns, recognizing the increased use of mediation in the international commercial context and the benefits that the mediation process affords parties. The instruments, as they are currently drafted, address both enforcement concerns and the possibility for a party to invoke a settlement agreement as a defense. To date, changes have not yet been uploaded to the UNCITRAL website that would show the most recent revisions to the draft model law and convention. The most recent drafts are available here.

By way of background, a “model law” is a template of sorts, for States to consider adopting locally. A “convention” on the other hand is an instrument that is binding on States and other entities (so long as they are signatory to the document).

What does all of this mean for parties to mediation? For now, it means waiting for further developments. UNCITRAL must ultimately approve the instruments before any adoption or ratification processes may commence. The Commission will commence review this summer.


Erin Gleason Alvarez is Principal at Gleason Alvarez ADR, LLC.  She serves on the CPR Institute Panel of Distinguished Neutrals and co-chairs the CPR Institute Mediation Committee.  Erin previously acted as the former Global Head of ADR Programs for AIG. 

Erin now serves as mediator and arbitrator in commercial and insurance disputes and may be reached at erin@gleasonadr.com

Ethics Issues in Mediation: Confronting the Maze of Confidentiality and Privilege

By Ginsey Varghese

With a rise in litigation about mediation, likely linked to its  increasingly common use, it is important to take a closer look at the ethical issues facing both the mediator and advocate in a mediation.

What are the ethical obligations of mediators to parties when engaged in “shuttle diplomacy” in private caucusing? How does blanket confidentiality in mediation agreements intersect with attorney-client and work product privilege? In disputes following mediation, will courts pierce the confidentiality of mediation? Can mediators be subpoenaed to testify?

These hairy contours of the law and mediation were addressed in an interactive panel hosted jointly by CPR, Practical Law, and Jenner & Block, LLP on January 8, 2018.  The panel was moderated by Steven Skulnik (Editor) of Practical Law, and featured Noah Hanft (President and CEO) of CPR, Bernadette Miragliotta (Managing Counsel) at American Express Company and Richard Ziegler (Partner) at Jenner & Block, LLP (pictured in the order, from left to right below).

use webinar

Almost 400 people attended the session via webinar, and another several dozen in person at Jenner & Block’s New York offices. The discussion was extremely engaging as the moderator, Mr. Skulnik, steered panelists’ conversations around realistic hypotheticals with live polling and immediate feedback from the audience.

The session began discussing a mediator’s duty of confidentiality in private caucus. Mr. Ziegler stated, “An effective mediator must review with the parties exactly what the mediator can say in caucusing with the other side.” All the panelists agreed, adding that mediators must be tactful in their language conveying information to guard the confidentiality of each side.

In a discussion about whether mediators should suggest specific dollar amounts for offers or demands, Ms. Miragliotta stressed that this should be avoided as it is essential that parties feel like it is their mediation…that they own the process and the settlement. It is not beneficial for parties to feel rushed into an outcome over which they do not feel ownership, she added.

Another important consideration  discussed is that there is no single uniform body of law on mediation across the 50 states jurisdictions and federal jurisdiction, and only 12 jurisdictions have adopted the Uniform Mediation Act.

As Mr. Hanft explained, knowledge on the applicable law or the necessary “magic words” in a particular jurisdiction when enforcing a settlement or protecting confidentiality in a post-mediation dispute is paramount. He also offered practical guidelines to ensure a settlement is more likely to be enforced.

The panelists deliberated a range of other topics: the complexities of Attorney-Client Privilege and Work Product Doctrine in a mediation; post-mediation disputes that commonly arise including settlement enforcement; mediation confidentiality issues in malpractice or non-party disputes; and best practices for mediator and advocates, among others.

As Jenner & Block’s Ziegler summarized, “Confidentiality in mediation is not ironclad.”

The final takeaway? When in mediation, be mindful of not crossing ethical lines and not inadvertently waiving attorney client privilege or work product protection.

An audio stream of the panel discussion is available In CPR’s member’s only Resources Library HERE (you must be logged in to view).

Ecuador’s Plea for Mediation in the Assange Standoff

By Ginsey Varghese

In early January, Ecuador Foreign Minister Maria Fernanda Espinosa indicated interest in mediation by a “third country or personality” to resolve the asylum case of Julian Assange, the founder of WikiLeaks.

Assange has been living in Ecuador’s embassy in London since June 2012, avoiding extradition to Sweden on a rape charge. Paulina Dedaj, “Assange asylum ‘not stable,’ Ecuadorian embassy says,” Fox News (Jan. 9) (available at http://fxn.ws/2DX3Vaq).

The Swedes are no longer pursuing the case, but the United States still may want Assange extradited in connection with the WikiLeaks publication of U.S. military information.

Today, a U.K. court denied Assange’s request to invalidate the arrest warrant for him, after his lawyers argued that there was no need for extradition since the original charges in Sweden had been dropped.  “Julian Assange arrest warrant still stands, court rules,” BBC News (Feb. 6)(available at http://bbc.in/2GT7obb). The request was denied.

The BBC earlier reported that Assange’s current arrangement is unsustainable. “A person cannot live in those conditions forever,” Espinosa said. “Julian Assange: Ecuador seeks mediator in ‘unsustainable standoff,’” BBC News (Jan. 9) (available at http://bbc.in/2DZYc3S).

Assange earned notoriety in 2010 when WikiLeaks released confidential materials about U.S. military activity in Iraq and Afghanistan, which included helicopter video of civilians being killed in Iraq, diplomatic correspondence of underground negotiations and classified documents about the war in Afghanistan and Iraq. Liam Stack, Nick Cumming-Bruce & Madeleine Kruhly, “Julian Assange: A Legal History.”  N.Y. Times (Updated Jan. 26)(available at http://nyti.ms/2mZAywg).

There are rumors of a secret U.S. arrest and extradition warrant for his connection to exposing U.S. state secrets if he leaves the embassy. Maggy Ayala & Steven Erlanger, “Ecuador Gives Assange Citizenship Worsening Standoff with Britain.” N.Y. Times (Jan 11) (available at http://nyti.ms/2EzDfvk).

Assange fears prosecution by the United States, and British officials have not provided any assurances that he would not be extradited. Alexandra Valencia, “Ecuador says exploring mediation to solve Assange standoff,” Reuters (Jan. 9)(available at http://reut.rs/2DHNEpB).

CNN earlier reported that the British police maintain an arrest warrant for Assange because he jumped bail after the British Supreme Court denied his extradition appeal. Jason Hanna, “Swedish court refuses to revoke Julian Assange’s arrest warrant,” CNN (Nov. 20, 2014) (http://cnn.it/1r0v79Y). See also Ana Melgar, Jamie Grey, and Kara Fox, “WikiLeaks founder Julian Assange granted Ecuadorian citizenship,” CNN (Jan 11) (http://cnn.it/2D3H4wT).

Assange described the situation since his arrest as a “terrible injustice.” Robert Booth, “Julian Assange’s stay in London’s embassy untenable, says Ecuador,” Guardian (Jan. 9) (available at http://bit.ly/2CLUs4B).

When Ecuador initially granted asylum to Assange, he was viewed as a political hero by many for opposing “US imperialism”; but today, with his interference in the 2016 U.S. presidential election, Assange’s supporter base has shifted to “hard-right nationalists,” according to the Guardian‘s James Ball, “The only barrier to Julian Assange leaving Ecuador’s embassy is pride,” Guardian (Jan. 10)(available at http://bit.ly/2DguTtu).

Reuters earlier quoted Espinosa, who stated, “No solution can be reached without international cooperation and without cooperation from the United Kingdom.”

The Guardian noted that Assange’s lawyer appeared to welcome Ecuador’s mediation proposal, and emphasized that the U.K should “respect[] its human rights obligations and commitments to the United Nations.”

But UK government countered that Assange should leave the embassy and face justice.

The diplomatic standstill has only worsened with Ecuador’s grant of citizenship to Assange last month, a decision that Ecuador Foreign Minister Espinosa explained was made after careful review of Ecuador’s obligations under Ecuadorean law and international law, according to the New York Times.

Ecuador’s “mediation” pitch may be a route to resolution, but so far, the stalemate continues.

The author is a CPR Institute 2018 intern. She is a law student at Pepperdine University’s School of Law in Malibu, Calif.  

Roundup: Legislation with Mediation or Arbitration…Maybe for the future?

By Elena Gurevich

According to Congress.gov, the official website for U.S. federal legislative information, and Govtrack.us, an organization that tracks legislation and votes, several bills have been introduced in the U.S. House of Representatives and the Senate this year that touch upon arbitration or mediation.

Out of five bills introduced, only one deals with mediation as well as arbitration. Although (according to Govtrack) it is highly unlikely that these bills will be passed by the present Congress, they might get a shot in the future under a different Congress.

H.R. 156—Labor Relations First Contract Negotiations Act of 2017. The bill, introduced on Jan. 3 by Rep. Gene Green, D., Texas, has a prognosis of passage of 1%, according to Govtrack, whose projection estimates are supplied by Skopos Labs, a New York software company. The bill amends the National Labor Relations Act to address initial contract negotiation. Specifically, the bill requires mediation if an employer and a newly certified union have not reached a collective bargaining agreement within 60 days. “Either the employer or the union may request binding arbitration if the parties have not reached an agreement within 30 days of selecting a mediator.”

See https://www.congress.gov/bill/115th-congress/house-bill/156.

H.R. 832—Arbitration Transparency Act of 2017, with a 3% chance of passage, requires that an arbitration proceeding between a consumer and a financial institution, in a dispute involving a consumer financial product or service, must be open to the public. It was introduced Feb. 2 by Rep. Michael Capuano, D., Mass.

See: https://www.congress.gov/bill/115th-congress/house-bill/832?r=10

H.R. 1374—Arbitration Fairness Act of 2017 was introduced on March 7. The bill prohibits a predispute arbitration agreement from being valid or enforceable if it requires arbitration of an employment, consumer, antitrust, or civil rights dispute. The bill, sponsored by Rep. Hank Johnson, D., Ga., has a 3% chance of passing, according to Govtrack.

See: https://www.congress.gov/bill/115th-congress/house-bill/1374?r=7

  1. 542—Safety Over Arbitration Act of 2017 was introduced on March 7, with a current prognosis of 9%. The Congress.gov summary says the bill “prohibits the use of arbitration whenever a contract between an individual and another party requires arbitration to resolve a claim or controversy alleging facts relevant to a hazard to public health or safety unless all parties to the controversy consent in writing after the controversy arises.” The sponsor is Sheldon Whitehouse, D., R.I.

See: https://www.congress.gov/bill/115th-congress/senate-bill/542?r=22

  1. 647—Mandatory Arbitration Transparency Act of 2017. The bill has only a 2% chance of passing in this Congress, according Govtrack and Skopos Labs. The bill amends U.S.C. Title 9 on arbitration. According to the Congress.gov summary, the bill “prohibits predispute arbitration agreements from containing a confidentiality clause regarding an employment, consumer, or civil rights dispute that could be interpreted to prohibit a party from: (1) making a communication in a manner such that the prohibition would violate a whistle-blower statute; or (2) reporting or making a communication about tortious conduct, unlawful conduct, or issues of public policy or public concern. But the prohibition shall not apply if a party can demonstrate a confidentiality interest that significantly outweighs the private and public interest in disclosure.” Richard Blumenthal, D., Conn., is the sponsor.

See: https://www.congress.gov/bill/115th-congress/senate-bill/647

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The author is a CPR Institute 2017 Fall Intern.

Updating the Global Pound Conference: A Survey on Mediation in Cross-Border Disputes

By Angela Cipolla

The recent Report on International Mediation and Enforcement Mechanisms found that, while mediation survey respondents believe in the necessity of using the process for cross-border disputes, a lack of education about how mediation works is a problem.

The report’s results also strongly boost calls for an international mediation enforcement mechanism.

The recent report was issued by the Institute for Dispute Resolution, at New Jersey City University’s School of Business in Jersey City, N.J., to the International Mediation Institute for the benefit of delegates attending the UNCITRAL Working Group II (Dispute Settlement) 67th Session, on dispute settlement, which was held last month in Vienna. For more information, see www.imimediation.org.

The report follows and incorporates results of surveying done at the Global Pound Conference, which concluded a year of face-to-face meetings with practitioners worldwide in July. See http://globalpound.org; for a wrap-up of the GPC series, see CPR Speaks blog post at http://bit.ly/2vxV2P1.  The IMI and NJCU IDR surveys received responses from users in various fields and professions that represented, according to respondents who identified their locations, 24 countries.

The information was collected in the 28 GPC events held in 22 countries, as well as through online voting. Votes were categorized by stakeholders.

The report, written by David S. Weiss, director of the Institute for Dispute Resolution and a visiting scholar at the New Jersey City University’s business school, and New Jersey attorney Michael R. Griffith, analyzed views on establishing an international treaty for the enforcement of mediated settlements collected online from June 2016 to March 2017; it also analyzed responses from the Global Pound Conference Survey, which was available at IMI Global Pound Conference gatherings and online from March 2016 to September.

The report also expands upon how the international legal and business communities use mediation.  See S.I. Strong, “Use and Perception of International Commercial Mediation and Conciliation: A Preliminary Report on Issues Relating to the Proposed UNCITRAL Convention on International Commercial Mediation and Conciliation,” U. of Missouri School of Law Legal Studies Research Paper (Nov. 17, 2014)(available at http://bit.ly/2yAzUhp).

Overview

Weiss and Griffith gathered the opinions of “those who are most likely affected by the adoption of any prospective drafts or proposals by Working Group II (Dispute Settlement) with emphasis on the users.” The views, reflecting 103 survey responses, reflect the “wider business community, their advisors, providers, and those that may influence the mediation space,” they write. The GPC conference and online surveying produced responses from about 2,500 stakeholders.

The report follows the same pedagogical and methodological process as Strong’s article, presenting research “gathered by an international quantitative-qualitative study of users’ assessments of the enforcement of international commercial settlement agreements resulting from conciliation.”

The Report’s Findings

With regard to the report’s own survey questions, the study brought to light a lack of education regarding the benefits and uses of mediation in cross-border disputes. It found that 40% of the respondents said they use or have been advised to use mediation in a cross-border dispute as a best practice in business “infrequently,” and 24% answered “not at all.”

When users were asked why they thought parties do not resolve their commercial cross-border disputes through mediation, the most frequent answer at 57% of the responses was that “they are unfamiliar with mediation.”

The study called the result “a surprisingly [sic] lack of knowledge about mediation among users.”

These results demonstrate a need for more education about mediation. Interestingly, the second highest-ranked reason in response to the question was that no universal mechanism to enforce a mediated settlement exists.

While the IMI and NJCU survey also showed “a general positive direction of users to incorporate mediation clauses into cross-border contracts,” 80% of users were even more apt to participate in mediation if there was a uniform global mechanism to enforce mediation settlements in place.

This demonstrates the incentive that such a mechanism would provide and the possible positive effects it would have on mediation use in cross-border disputes.

Accordingly, the report found that the majority of users and stakeholders in both the study conducted for the report and the GPC surveying “believe that a uniform global mechanism to enforce mediation settlements would improve commercial dispute resolution.”

Some concerns regarding faith and trust in the mediation process were raised in the IMI and NJCU study’s comments, suggesting that more confidence in the process needs to be built as the use of mediation becomes more prevalent.

The report also looked to whether a treaty should include provisions similar to the longstanding Convention on the Recognition and Enforcement of Foreign Arbitral Awards, better known as the New York Convention.

This idea was well received. An overwhelming 84% of users stated that they would be “more likely” to use or increase their use of mediation in a cross-border dispute if there were a uniform global mechanism in place, similar to the New York Convention, which would ensure enforcements of settlement agreements.

The report speculates that a majority of users would like to use the uniform mechanism as a “bargaining chip;” 60% of users stated that they would prefer an “opt-in” system.

Additionally, the report examined the challenges users faced in mediation. When asked whether users faced any post-mediation challenges to settlement agreements in cross-border disputes on the grounds of capacity, duress, or fraud, the two largest recorded answers were 47%, responding “never,” and 36% responding, “sometimes.”

The report also asked users whether they would be less likely to use mediation if a uniform global mechanism of enforcement included any defenses.  The question didn’t show that defenses would have a significant impact on a user’s willingness. Forty-four percent of the users responded “no,” while 27% responded “yes.”

When asked if the users would prefer a uniform global mechanism that limited defenses, similar to the New York Convention’s Article V, 54% of users responded “yes,” while 22% responded “no.”

The report also revealed that though re-litigating settlements doesn’t occur often, the rate was high.  The study found that 35% of users answered “infrequently” when asked if they have ever were required to re-litigate on general contract defense a mediation settlement agreement that was not honored. “If this was not a problem,” the authors wrote, “we would expect to see user’s answering ‘infrequently’ at a much lower percentage.”

This indicates a problem that a global enforcement mechanism might help alleviate. Additionally, regarding the availability of mediators, the report showed that “[w]hile it is generally positive that 61% of users are generally able to find qualified mediators, there [is] a vast amount of room for improvement.”

In addition to its own questions, the report also analyzed the GPC Series Questions. The report found that just like the users in its study, a majority of GPC stakeholders “believe that a uniform global mechanism to enforce mediation settlements would improve commercial dispute resolution, with 51% [of users concurring.]”

Overall, the GPC Series Questions had a positive view of taking action on mediation settlement enforcement.  Those conference and web survey questions found 51% of users “clearly supporting a uniform global mechanism to enforce mediation settlements as their first preference.”

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The report concludes that global enforcement of mediation settlement agreements is a “necessary tool for encouraging mediation,” and that such an enforcement mechanism should be “congruent with the methodological approach that was adopted by the arbitration community through the New York Convention.”

The report further emphasizes that “practical certainty” in mediated settlement agreements will (1) improve access to justice and (2) “increase efficiency for the wider business community,” and that both of these benefits are crucial to advance trading systems and aide businesses.

UNCITRAL’s Working Group II’s 68th session, expected to consider a mediation enforcement convention further, is scheduled to be held in New York, from Feb. 5 – 9.

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The author is a Fall 2017 CPR Institute Intern.

The EU Mediation Blues: Is there a way to resolve the EU Mediation “Paradox”?

javierBy Javier Fernández-Samaniego

Almost ten years have elapsed since the European Union adopted the Mediation Directive (2008/52/EC) in civil and commercial matters, and four years since the European Parliament acknowledged the so-called “EU Mediation Paradox” [1] in its study “‘Rebooting’ the mediation directive”. The study drew attention to the lack of significant development of mediation, utilized only in less than an average 1% of the cases in courts of Member States in the EU, despite its high success and satisfaction rates when used.

As rightly pointed out in the Report from the Commission to the European Parliament, the Council and the European Economic and Social Committee on the application of Directive 2008/52/EC (Aug 2016)[2], due to the “unofficial” nature of mediation compared to formal court proceedings, it is very difficult to obtain comprehensive statistical data on mediation such as the profile of companies using mediation, number of mediated cases, the average length and success rates of mediation processes.

In what seems to be a fresh verse in the EU Mediation blues song, a new Resolution of 12 September 2017 on the implementation of the EU Mediation Directive (2008/52/EC) issued by the European Parliament[3] notes that certain difficulties exist in relation to the functioning of the national mediation systems in practice. These difficulties are mainly rooted in the adversarial tradition and the lack of a “mediation culture” in the Member States, the low level of awareness of mediation in most Member States, insufficient knowledge of how to deal with cross-border cases and the functioning of the quality control mechanisms for mediators.

In this Resolution, the European Parliament has made the following recommendations:

  1. EU Member States should boost awareness of how useful mediation is and step up their efforts to encourage the use of mediation in civil and commercial disputes, such as through information campaigns, improved cooperation between legal professionals and an exchange of best practices in the different local jurisdictions of EU.
  2. The Commission should assess the need to develop EU-wide quality standards for the provision of mediation services, especially in the form of minimum standards ensuring consistency, while considering the fundamental right of access to justice.
  3. The Commission should assess the need for Member States to create national registers of mediated proceedings as useful sources of information for Commission and mediators across Europe.
  4. The Commission should undertake a detailed study on the obstacles to the free circulation of foreign mediation agreements in the Union and on various options to promote the use of mediation as a sound, affordable and effective way to solve conflicts in internal and cross-border disputes in the Union, considering the rule of law and ongoing international developments in this field.

Lastly, in an apparent call for new rules, the Parliament requests that the Commission offer solutions to extend the scope of mediation to other civil or administrative matters in future regulation and highlights that, despite the voluntary nature of mediation, further steps must be taken to ensure the enforceability of mediated agreements in a quick and affordable manner.

On the brighter side, there are some less worried notes to the EU Mediation blues tune since the Parliament also welcomes the Commission’s dedication to co-financing various projects aimed at the promotion of mediation and training for judges and practitioners in the Member States. It appears that, after ten years’ investment in civil and commercial mediation since the Directive has been adopted, the perseverance will pay off.

The International Institute for Conflict Prevention and Resolution (CPR) through its European Advisory Board is working hard to fulfill the agreed-upon objectives and has recently published a guide for European corporates and organizations on the use of mediation and other ADR processes [4] that includes resources and practices to help identify disputes suitable for ADR and make the most out of them. The Guide also includes several successful case studies. There is no doubt that such efforts will eventually turn the moody blues of EU mediation into a happier upbeat melody.

FOOTNOTES:

[1] See the European Parliament’s study: “‘Rebooting’ the mediation directive”: http://www.europarl.europa.eu/thinktank/en/document.html?reference=IPOL-JURI_ET(2014)493042

[2] Report from the Commission to the European Parliament, the Council and the European Economic and Social Committee on the application of Directive 2008/52/EC of the European Parliament and of the Council on certain aspects of mediation in civil and commercial matters. Brussels, 26.8.2016 COM(2016) 542 final http://ec.europa.eu/justice/civil/files/act_part1_adopted_en.pdf

[3] http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P8-TA-2017-0321+0+DOC+XML+V0//EN&language=EN

[4] https://www.cpradr.org/resource-center/toolkits/european-mediation-adr-guide

 

Javier Fernández-Samaniego is the Managing Director of the IberoAmerican law firm SAMANIEGO LAW with offices in Madrid and Miami (for Latin America) and head of its Commercial, Dispute Resolution and Tech & Comms team. He regularly serves as an arbitrator and mediator of complex international disputes and he is a member of the Institute’s CPR Panel of Distinguished Neutral and of CPR European Advisory Board. He can be reached at javier.samaniego@samaniegolaw.com.