UN Insolvency Work Finds Help with Mediation

By Mylene Chan

The United Nations Commission on International Trade Law adopted a simplified insolvency regime that recommends mediation to resolve disputes between financial sector creditors and small debtors during its 54th Session. 

The move sets out a path where mediation can be a help to debt-plagued businesses in developing and emerging countries.

Last Friday, UNCITRAL closed its 54th Session in Vienna, which began June 28. During this session, Working Group V on insolvency law finalized legislative recommendations for a simplified insolvency regime for micro and small enterprises, or MSEs, and UNCITRAL adopted it. 

UNCITRAL mandated this project in 2013 because the insolvency rules generally applicable to mid-sized and large business enterprises do not accommodate micro and small businesses, which are the driving economic force for many countries. Gregor Baer, 14:2 Insolvency and Restructuring Int’l 64 (Sept. 2020) (available at https://bit.ly/3B1peox).

As part of the United Nations’ sustainable development goals, UNCITRAL has also asked its  Working Group I, on micro, small and medium enterprises, to make recommendations to reduce legal obstacles faced by micro and small businesses in developing countries. Id.

The drafting of the simplified insolvency regime has been coordinated with the World Bank Group because the Financial Stability Board designated both the World Bank and UNCITRAL as standard setters in the field of insolvency. Financial Stability Board, Insolvency and Creditor Rights Standard (Jan. 20, 2011) (available at https://bit.ly/36EKqTi).

In light of the significant negative impact of Covid-19 on MSEs, several member states of Working Group V have expressed an urge to expedite the drafting of the simplified insolvency regime. UNCITRAL, Capital Markets Intelligence, “International Insolvency & Restructuring Report 2020/21” (available at https://bit.ly/2VBeg8P).

Ironically, because many member states have implemented insolvency-related legislative measures to address difficulties faced by MSEs during the health emergency, the pandemic has created valuable experiences that could help improve the text of the simplified insolvency regime.

The simplified insolvency regime addresses major characteristics of small debtors, such as having a non-diversified creditor, supply, and client base. See Note by the Secretariat,  “Insolvency of micro, small and medium-sized enterprises: Draft text on a simplified insolvency regime” (Sept. 28, 2018) (available at https://bit.ly/3ie53Ll).  

Other distinguishing features of small debtors covered by the simplified insolvency regime include the access to credit being subject to the grant of personal guaranties, encumbrance of physical assets, and unencumbered assets with minimal value.  In addition, the simplified insolvency regime considers small debtors’ frequent poor or nonexistent records, overlapping ownership control and management, and “concerns over stigmatisation.” See UNCITRAL, Capital Markets Intelligence, International Insolvency & Restructuring Report at 10, linked above.

The simplified insolvency regime focuses on mechanisms to bring micro and small business debtors into a formal insolvency system that provides rehabilitation and a reasonable payment plan.  Through reduced complexity of insolvency procedures, lowered costs, and more favorable conditions for a prompt discharge, small debtors could hope to have a fresh start.  See Note by the Secretariat at page 7, linked above.

Member states have proposed endorsing out-of-court and hybrid procedures to develop workable alternatives to formal insolvency processes amicable to MSEs. Report of Working Group V (Insolvency Law) on the work of its 54th session (Vienna, 10–14 Dec. 2018) p. 22 (Dec. 20, 2018) (available at https://bit.ly/3z29MGR).  

During previous drafting stages, some member states explained that certain preconditions should exist for out-of-court and hybrid procedures to be effective, such as incentives for financial institutions to negotiate debt restructuring and to suspend the debt.  Those procedures, however, were generally more suitable for large and medium-sized enterprises.

Other member states explained that in some jurisdictions, positive tax impacts of debt forgiveness are available as incentives for financial sector creditors to negotiate debt restructuring with small debtors. In other jurisdictions, administrative out-of-court procedures and mediation have yielded positive results.

In previous negotiation stages, some national delegations and development-focused non-governmental organizations suggested non-punitive rehabilitation of small debtors to promptly restore their economic productivity. See Baer, linked above.

* * *

In this month’s session, Working Group V adopted the following commentaries in the simplified insolvency regime to provide guidance that mediation could be helpful in resolving disputes relating to MSEs:  

To avoid delays and at the same time to ensure transparency and predictability, this [text] recommends that a simplified insolvency regime should provide for the default procedures and treatment that can be overridden by the decision of the competent authority on its own motion or upon request of any party in interest. The competent authority may modify the proceedings by introducing, for example, a mandatory mediation stage or displacing the debtor- in-possession with an independent professional.

Note by the Secretariat, “Draft text on a simplified insolvency regime” 38, ¶ 75. (Feb. 16, 2021)  (available at https://bit.ly/3id8IJw).

Mediation and conciliation services may also be helpful for resolution of disputes between MSE debtors and creditors and among creditors.

Note by the Secretariat, “Draft text on a simplified insolvency regime Addendum” 38, ¶ 75. (Feb. 16, 2021)  (available at https://bit.ly/3raOQKU).

* * *

The simplified insolvency regime is expected to appear as Part V of UNCITRAL’s Legislative Guide on Insolvency Law.

Developing and emerging countries, where MSEs may drive the economies, are among those hit hardest by the economic contraction spurred by the Covid-19 pandemic. Small debtors’ insolvency affects job preservation and the supply chain.

On July 16, the final day of the 54th session, Caroline Nicholas, Senior Legal Officer of UNCITRAL, commented on technical assistance activities focusing on MSEs recovery from the effects of the pandemic:  

What is really interesting to hear is the experience in three continents, in Africa, Latin America, and Asia. We have some emphasis on exactly the same points, the need for agility, the need for syndicated simplified measures and the need for speed in supporting MSEs so that they are receiving the financial and other support.

As the world is gaining control over the Covid-19 virus, mediation emerges as a potential solution to help ease the recovering path for struggling segments by bringing creditors to negotiate with small debtors. 

With the help of mediation and incentivized policies for creditors to suspend or forgive debts, perhaps many MSEs can recover their economic productivity and help developing and emerging countries restore economic and social welfare after the pandemic. 

* * *

The author, an LLM candidate at Yeshiva University’s Benjamin N. Cardozo School of Law in New York, has covered UNCITRAL’s 54th Session proceedings as a 2021 CPR Summer Intern.

[END]

Biden Signs Resolution Restoring Pre-Trump EEOC Conciliation Rules

By Cai Phillips-Jones

On June 30, President Biden signed S.J. Res. 13, overturning a recent U.S. Equal Employment Opportunity Commission rule change that briefly required the EEOC to share more information with employers during the EEOC conciliation process.

CPR Speaks previously discussed the rule reversion, which Congress passed along party lines, and which will bring back the previous higher level of discretion on information to be provided by defendant companies.

Conciliation is a mediation-like process which happens after evidence of discrimination is found by the EEOC. Proponents and opponents of the short-lived rule both argued that their rule preferences would increase efficient settlement of EEOC cases.

The standard emanates from Mach Mining v. EEOC, 575 U.S. 480 (2015) (available at https://bit.ly/2TmuMZg), in which the U.S. Supreme Court granted broad discretion to the EEOC to determine how to proceed with the conciliation process, including the amount of information shared with the parties.

But the Trump-era rule, which went into effect in February, tamped down on this discretion, requiring the EEOC to share factual findings of discrimination such as the identity of witnesses to the discrimination.

Biden’s remarks upon signing can be found here.

* * *

The author, a J.D. student who will enter his third year this fall at Yeshiva University’s Benjamin N. Cardozo School of Law in New York, is a 2021 CPR Summer Intern.

[END]

‘Oncoming Tsunami’: With CDC Eviction Moratorium Ending July 31, Will ADR Programs Come to the Rescue of Tenants, Landlords, and Courts?

By Mylene Chan

The Covid-19 pandemic has had a number of negative economic effects, and one of the most significant is the exposure of renters across the United States to increased eviction risks.

And mediation, in turn, has been a significant response.

According to Princeton University’s eviction tracking system–monitoring five states and 29 cities in the United States–landlords have filed about 386,000 evictions during the pandemic, including an estimated 6,250 filed last week.

In response, governments at the federal, state, and local levels have developed short-term eviction moratoriums and similar measures to help renters keep their homes. But in the long run, eviction proceedings are likely to rise.

Federal, state, and local governments have adopted a variety of temporary emergency measures aimed at helping renters. For example, in September 2020, the U.S. Department of Housing and Urban Development and the Centers for Disease Control issued a nationwide moratorium on evictions. See the Federal Register announcement, since extended, here.  

This moratorium was challenged by real estate groups, but a U.S. Supreme Court ruling this week allowed it to remain in effect through the end of the month. Alabama Association of Realtors, et al. v. Department of Health and Human Services, et al., No. 20A169 (June 29); see also analysis at Amy Howe, “Divided court leaves eviction ban in place,” Scotusblog (June 29) (available at https://bit.ly/3xhd74c).  

In addition, Congress allocated $46 billion in rental assistance to struggling renters through the American Rescue Plan Act of 2021 and the December 2020 Covid-19 relief package; much of the relief funding, however, has yet to reach struggling renters. See, e.g., “Emergency Rental Assistance through the Coronavirus Relief Fund,” Congressional Research Service (June 8) (available at https://bit.ly/3Ak9vjX).  See also Kristian Hernández, “As CDC’s Eviction Moratorium Ends, States Prepare for Flood of Cases,” Pew Stateline (June 22) (available at https://bit.ly/3AqTHw2).

Several states and cities–such as Maryland, New York, Vermont, Hawaii, Philadelphia and Washington, D.C.–have adopted eviction bans or limitations. These moratoriums have sharply reduced eviction filings during the extent of the pandemic. 

But eviction restrictions will not remain in place indefinitely. After being extended several times, the federal moratorium is scheduled to expire on July 31. (See the CDC press release on the extension at https://bit.ly/3684qNN.) State and local eviction protections are also expected to end at some point this year. As a result, states and cities are preparing for a potential wave of eviction actions in their housing courts once moratoriums lift.

Some states and local governments have attempted to modify eviction procedures to make the process less burdensome on renters. For example, Maine passed a bill instructing landlords to explain the eviction process, options for legal assistance and rent relief, and eviction notices. Nevada and Illinois each adopted a law requiring courts to seal records of evictions relating to defaults during the pandemic.

One possible solution that could help both the courts and renters adapt to the expected rise in evictions is alternative dispute resolution. These programs aren’t new.  But recently, interest has been heightened due to the pandemic, and many U.S. jurisdictions have turned to ADR eviction programs to encourage tenants and landlords to negotiate.

According to the Urban Institute, as of April, there were 38 ADR eviction diversion and prevention programs nationwide. Mark Treskon, Solomon Greene, Olivia Fiol & Anne Junod, “Eviction Prevention and Diversion Programs,” Urban Institute Housing Research Crisis Collaborative (April 2021) (available at https://urbn.is/3qI9C4j).

The states with programs include California, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Maine, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, Ohio, Oregon, Pennsylvania, Tennessee, Texas, and Washington. See https://bit.ly/3xdHMPP, collected by Chicago’s Resolutions Systems Institute.

ADR eviction programs have been successful in several jurisdictions over the past few years. One example is a St. Paul, Minn., housing clinic. Colleen Ebinger & Elizabeth Clysdale, “Justice Served, Housing Preserved: The Ramsey County Housing Court Model,” 41:3 Mitchell Hamline L.J. of Pub. Policy & Practice: Article 10 (2020) (available at https://bit.ly/2V1DaON).

In July 2018, the Ramsey County court—covering part of the Minneapolis-St. Paul area–launched a housing clinic with the target of reducing eviction by 50%  in five years. Eighteen months after implementation, eviction judgments declined, settlements rose, the court trial calendar lightened and expungements doubled.

Another successful eviction mediation program was developed by the Washington University School of Law Civil Rights & Mediation Clinic and the Metropolitan St. Louis Equal Housing and Opportunity Council in St. Louis in 2012. Karen Tokarz, Samuel Hoff Stragand, Michael Geigerman & Wolf Smith, “Addressing the Eviction Crisis and Housing Instability Through Mediation,” 63 Washington U. J. of Law & Policy 243 (available at https://bit.ly/3694AEG).  

In the St. Louis Mediation Project, professional mediators and students provide free mediation services for landlord-tenant cases. In 2018, 71% of pro se landlord-tenant cases mediated by the project resulted in a settlement. More than half of these agreements resulted in a dismissal of eviction proceedings.

There is some evidence that even many landlords support ADR in the eviction context. Last month, the American Bar Association and the Harvard Negotiation & Mediation Clinical Program published a report identifying nationwide best practices to divert eviction filings and enhance housing stability. See “Designing for Housing Stability: Best Practices for Court-Based and Court-Adjacent Eviction Prevention and/or Diversion Programs” (available at https://bit.ly/3yn3FN7).

This research revealed that stakeholders generally supported eviction prevention efforts during the pandemic. More than 70% of the landlords surveyed were willing to discuss tenant non-payment outside of court. 

Report author Deanna Parrish, Clinical Instructor and Lecturer at Harvard Law School’s Dispute Systems Design Clinic, wrote in an e-mail:

Effective eviction prevention and/or diversion programs use a multi-sector and holistic approach to provide parties with a combination of legal representation, quality mediation, cash or rental assistance, and self-help or supportive services. Investing in eviction prevention and/or diversion programs is not just urgent, it is doable. These programs enjoy wide support across landlords, court staff, and tenants. Over 81% of property owners surveyed reported being less likely to pursue eviction if their tenant had access to rental or cash assistance.Court staff and judicial stakeholders reported eviction diversion programs as essential to helping lighten what they described as an “oncoming tsunami” of eviction filings once the CDC moratorium lifts. Tenant advocates have long been calling for legal representation and easily accessible rental and cash assistance, among other interventions, to help increase housing stability. Legislatures and courts should act swiftly to formalize eviction prevention. Doing so would be nothing short of a lifeline for millions of Americans, landlords and tenants alike.

As the Covid-19 pandemic winds down and emergency measures are lifted, alternative dispute resolution eviction programs may soften the blow to tenants as eviction moratoriums end. Although these ADR programs are in the early stages of adoption, there are promising signs that they might help the U.S. economy’s housing segment return to normalcy without significant housing disruptions.

* * *

The author, an LLM candidate, at Yeshiva University’s Benjamin N. Cardozo School of Law in New York, is a 2021 CPR Summer Intern.

[END]

Highlights from the June Session of the Harvard Law School Program on Negotiation ‘Mediating Disputes’ Training

By Mylene Chan

The Harvard Law School Program on Negotiation conducted a June 7-11 program called Mediating Disputes. This is a recurring course that the program has offered to executives for many years.

About 50 professionals from around the world, including judges, lawyers, business executives, and nonprofit managers attended the sessions taught by Robert Mnookin, Samuel Williston Professor of Law at Harvard Law School, Gary Friedman, of Mill Valley, Calif.’s Mediation Law Offices, and Sausalito, Calif., mediator Dana Curtis.

Mediating Disputes provides training in the non-caucus “Mediation through Understanding” model of mediation that Mnookin, Friedman, and, along with Friedman, co-founder of the Center for Understanding in Conflict, Jack Himmelstein, of New Rochelle, N.Y., have developed and promoted as teachers and practitioners for more than 20 years at the Center of Mediation in Law and the Harvard Negotiation Research Project.

The Understanding Model is a transparent approach in which conflicts are resolved through deepened understanding. This approach eschews the risks of coercion and manipulation potentially present in some other mediation models. 

A distinguishing feature is that all parties work together in a mediation with everyone present. There are no separate meetings and no shuttle diplomacy where the mediator alone has information from both sides. This arrangement eliminates the opportunity for mediators to manipulate information asymmetry. Apart from resolving that ethical dilemma, working together fosters more extensive mutual understanding between the disputants.

The model starts from the foundational belief that disputants should not caucus when conflicts arise and that, in fact, embracing conflicts is often the best opportunity to create value. By staying together throughout the mediation, even when emotions are high, the disputants are forced to vet their underlying interests, allowing the true issues to surface and bring about more nuanced appreciation of each party’s perspective and interest.

Another distinctive characteristic of the Understanding Model is the emphasis on placing ultimate responsibility for whether and how the conflict is resolved on the disputants, not the mediator. It is the parties, rather than the professionals, who ultimately have the best knowledge of what underlies their disputes. Although the intensity of the conflict can obscure their views, the parties hold the key to reaching a resolution of their dispute that best serves them.  When the parties take the lead in resolving the conflict, coercion and manipulation can be eliminated from a mediation, according to the course. 

Mnookin, Friedman, and Curtis presented together during the five-day course. The faculty members engaged the participants in two full mediation stimulations–a personal dispute and a complex business dispute–using the Understanding Model. Each day was dedicated to one of the model’s phases, including contracting, defining the problem and dealing with conflict, understanding law and interests, generating options, and exploring interests and packages.

The faculty demonstrated how each phase should be conducted.  They sent the participants to breakout rooms to roleplay, with guidance and critique, followed by debriefing.  After the day concluded, the three faculty members held office hours for follow-up questions.

The attendees participated in about four hours of simulated mediations using the Understanding Model so they could understand its impact and effect cognitively and viscerally.  

On the final day, the faculty showed a mediation training video produced by the International Institute for Conflict Prevention & Resolution, the host of CPR Speaks, illustrating the caucus model to compare and contrast the different styles. See “Resolution Through Mediation: Solving a Complex International Business Problem” (updated version on YouTube at https://www.youtube.com/watch?v=xTbj-eHwX-w and available from CPR at https://bit.ly/3cFEkW5).

* * *

Reflecting on the processes reviewed in the Program on Negotiation training sessions, Prof. Robert Mnookin noted, “Many lawyer-mediators primarily rely on separate meetings or caucusing for understandable reasons:

(1) it is more comfortable for them because it avoids their having to deal with heated conflict between the parties;

(2) they believe they will be told things in secret that will allow them to create alternatives that facilitate resolution. Besides, many lawyers (who typically select the mediator) prefer it because it gives them more client control.”

“But in my view,” Mnookin continued, “there is far too much reliance on caucusing. The Understanding Model puts the focus on the parties themselves and provides a much greater opportunity for them to take responsibility for helping shape a resolution that may provide a foundation for repairing a damaged relationship.”

Faculty member and Understanding Model developer Gary Friedman noted in an email,  “The model is premised on the idea that the power of understanding is an underutilized power as opposed to the power of coercion, and has the ability to help people find agreements that are more responsive to what’s personally important to them. Understanding in the form of agreements about how the mediation proceeds as well as the ultimate result give the parties control not just over the outcome, but provides them with participation in designing the process as well.”

Faculty member Dana Curtis, like Robert Mnookin, also had misgivings about relying on caucuses in mediation. She stated, “Unfortunately, the caucus model has eclipsed the Understanding Model, especially in recent years. I believe this has occurred for two reasons. Lawyers prize their role as legal adversaries and protectors at the expense of their role as collaborators and problem-solvers. And mediators, especially retired judges and lawyers brought up on settlement conferences, have not acquired the skills and understandings to enable them to offer parties and lawyers an alternative that can lead to a satisfying and meaningful process and, hopefully, resolution, rather than simply a ‘deal.’”

Concluded Curtis: “We would like to change that!”

Details of the Understanding Model can be found at the links above, and in Beyond Winning: Negotiating to Create Value in Deals and Disputes by Robert H. Mnookin, with Scott R. Peppet and Andrew S. Tulumello (Harvard University/Belknap Press 2004).  A mediation training video illustrating the Understanding Model titled Saving the Last Dance: Mediation Through Understanding, with Robert Mnookin and Jack Himmelstein as narrators and Gary Friedman as mediator, is available at the Harvard Program on Negotiation website at https://bit.ly/35hbdEE.  

And for more on recent views of mediation joint sessions and caucusing, see “Decline of Dialogue? Galton, Love & Weiss on Joint Sessions, Caucuses, and the State of Mediation,” CPR Speaks (June 2) (available at https://bit.ly/3daRBGe).

* * *

The author, an LLM candidate, at Yeshiva University’s Benjamin N. Cardozo School of Law in New York, is a 2021 CPR Summer Intern.

[END]

CEDR’s Eileen Carroll: Her Mediation Story

By Antranik Chekemian

F. Peter Phillips, director of New York Law School’s Alternative Dispute Resolution Skills Program, welcomed an online audience earlier this month as part of the program’s long-running lunchtime speaker series for a session with veteran U.K. mediator Eileen Carroll.

Carroll is founder of London-based Centre for Effective Dispute Resolution, better known as CEDR, “by far the most influential and prescient dispute resolution organization not only in the U.K., but really . . .  in Europe,” said Phillips in the introduction to the Feb. 10 session, which had about 40 attendees.

Phillips invited Carroll to share her professional background and how her journey into the ADR world started.  Carroll opened describing, among other things, a long history with the publisher of this CPR Speaks blog, the International Institute for Conflict Prevention and Resolution, and recounted some of those interactions over these years.  [Phillips is a former CPR senior vice president.]

She said she was a senior litigation partner at a London law firm in the 1980s, with “good contacts” in the U.S., and she took a six-month secondment to San Francisco.  “I was one of the senior litigation partners and they asked me whether I would go and work with a firm on the west coast,” she said, “and I took myself off to San Francisco.”

She said that she decided her focus would be alternative dispute resolution. “I learned a bit about mediation from some of the research I had done, and I thought that would be my project,” she said. She noted that she was impressed by how the mediation process “extracted people from the drama of litigation.” Carroll explained:

I then was given a book called The Manager’s Guide to Resolving Legal Disputes by Henry and Lieberman.  . . . Jim Henry, based in New York, who had started . . .  CPR. He became a very dear friend, and I was going to write a book, but someone gave me his book . . . and I decided when I read that I was really fired up to do something.

James F. Henry is founder of CPR, and Jethro Lieberman is a former CPR vice president and a retired New York Law School professor.

Carroll showed the audience an article she wrote stemming from her U.S. work, “Are We Ready for ADR in Europe?” International Financial Law Review 8 Part 12, 11 (1989).

The article’s title, she said, “was a question no one had asked, and I was determined that we were going to be ready for ADR in Europe. But I knew […] that I needed to do something to get a support behind me, so I set about founding a nonprofit organization.” She added, “I did get inspiration from Jim [Henry].”

She added, “By the time we launched CEDR, I had managed to get with the help of others–80 big companies to support the idea–[and] the major law firms in London didn’t want to be left out, so they thought they better support the idea.”

Philips jumped in and mentioned that CEDR’s story was similar to the CPR Institute’s origin in the U.S. “It wasn’t as if the idea was ‘Let’s take mediation and convince people of it’ so much as it was ‘Let’s take a core of leading owners of disputes–leading corporations, people who spend a lot of money litigating–and convene them so that they become the torchbearers,” said Phillips, adding, “They became the people who are convincing their peers.”

Carroll said that the ties to North America in her work continues, citing current work with the International Academy of Mediators. [CPR and CEDR continue to collaborate on seminars and trainings. Information on the next scheduled joint training–a four-day advanced mediation skills training seminar that begins April 19, in which the organizations will be joined by the Silicon Valley Arbitration & Mediation Center, is available on CPR’s website here.]

Philips asked Carroll about the role of emotion in commercial mediation, noting “the challenge to determine the extent to which . . . the expression of emotion in a commercial context is helpful.”

Carroll said, “In every conflict, there is emotion–people are upset in some way or other. Whether it’s because they have been avoiding it, whether it’s anger, whether it’s anxiety, all of those emotions I find present, and they display themselves in different ways, because we all have different kinds of personalities.”

She stressed the importance of “creating an environment where people can tell whatever their story is.” She stated that a mediator’s job is not to patronize but to notice the parties’ emotions and feelings, and explore them at the right moment with the right questions.

Carroll further emphasized that there is not a uniform approach in mediation. “There may be several working sessions with different people,” she said, “so to deal with these emotions, you have to go at it carefully without too many assumptions and create the space to get to know the people that you’re going to work with.”

Phillips then asked Carroll about the challenges women encounter in ADR. “When you were a practicing lawyer, you were very frequently the only woman in the room,” he said, “In the early days of ADR, you were very frequently one of the very few women who was making a go of it,” he said.

She emphasized that because law firms usually advise their clients during the mediator selection process, “they often follow the same kind of pattern of three names.” She expanded:

When l look back to the beginning of the field when we first started, . . . there was just a sense that we need people with status, people with experience, so at that point people were kind of looking to, ‘Who were those senior people?’ And the legal profession, even in the early 90s, a lot of those people were men. It is changing. But . . . those who were early entrants to the field obviously got . . . a reputation. [If they] were good mediators and good arbitrators who were around in the mid-90s, some of those people still have incredibly effective practices today.

Phillips then asked Carroll about a recent CEDR report that discussed “how female mediators view their strengths as opposed to how male mediators view their strengths.” [CEDR’s current research can be found here.]

“[W]omen recognized that they were good at relationships and empathy,” said Carroll, recalling the research, “and a lot of guys obviously have that experience, but . . . a lot of the men saw themselves as more as getting the deal done, much more transactional.”

Carroll then referred attendees to a Simon Baron-Cohen’s 2012 book, “The Essential Difference: Men, Women and the Extreme Male Brain, which discusses these issues.

“Women do have some very natural abilities in relation to communication skills and they have done work with babies, boys, and girls . . . and the way they react.  . . . So, women have a lot of natural skill in the area of mediation which I think sometimes they underplay because if you look at in life, women often have the role of having to make . . . all the relationships work within a family, sometimes in an office,” said Carroll.

Emphasizing the need for diversity, she concluded, “Women absolutely have the capability to do any tough mediation, because they have got the intellectual skill, they understand the background of the problem. There is no reason why there could not be as many successful commercial women mediators as men. I think it’s something about the filter of the selection process, which I think is changing.”

“All the business people I have worked with through the years in mediation, I have never had a problem,” said Carroll.  “Over time,” she continued, “I have never . . . felt any concern in dealing with business people about the role of the woman mediator. Never. I would not say that was always the case in relation to certain members of the bar.  . . . I have always managed to walk around it. It hasn’t been a problem.”

She concluded her presentation discussing instilling “patience and persistence” into mediation to make it successful.

* * *

Eileen Carroll’s presentation is archived at the NYLS ADR Program link above and directly on YouTube here.

* * *

The author, a second-year student at New York’s Benjamin N. Cardozo School of Law, is a CPR 2021 intern.

[END]

#CPRAM21: Managing Workplace Conflicts, On-site and Remote

If you missed the 2021 CPR Annual Meeting in January—the first free public meeting held online in the organization’s 40-year history—the videos are being posted on CPR’s YouTube Channel. While additional videos will be posted for CPR members only, the first, linked here on CPR Speaks, is open access and features the keynoters, CNN Anchor and Chief Political Correspondent Dana Bash and General James Mattis, who is former U.S. Defense Secretary. Click the Subscribe button at YouTube for alerts and for more CPR content. For information on full access and joining CPR, please visit CPR’s Membership webpage here.

By Antranik Chekemian

Kimberley Lunetta, who represents management in employment matters as of counsel at Morgan Lewis & Bockius, moderated a third-day CPR Annual Meeting panel on state-of-the-art best practices for addressing and resolving workplace disputes. The panel mainly concentrated on managing employees and disputes in the current remote environment, and how to set up an ADR program in order to prevent and resolve conflicts.

The Jan. 29 session included four panelists:

  • Alfred G. Feliu, who heads his own New York firm, is a longtime panelist for CPR Dispute Resolution and the American Arbitration Association’s commercial and employment arbitration and mediation panels. He is past chair of the New York State Bar Association’s Labor and Employment Law Section and a fellow of the College of Commercial Arbitrators and the College of Labor and Employment Lawyers.
  • Wayne Outten is chair and founder of New York’s Outten & Golden LLP, which focuses on representing employees. He has represented employees for more than 40 years as a litigator. He has long advocated for using mediation in employment disputes. His practice focuses on problem solving, negotiating, and counseling on behalf of employees.
  • Cheryl M. Manley is a veteran labor employment attorney with more than 25 years of  experience, and since 2005 has been at Charter Communications, where she is senior vice president and associate general counsel of employment law, leading the broadband/cable operator’s Employment Law Group.
  • Andrew J. Weissler is a partner in the labor and employment group of Husch Blackwell. He is a member of the firm’s virtual office, the Link, based in Bloomington, Ill. Weissler advises and represents public and private clients on workplace issues involving difficult personnel decisions.

Feliu and Outten are on a subcommittee of CPR’s Employment Disputes Committee that is working on a model workplace disputes program, along with a new version of CPR’s Employment Dispute Arbitration Procedure to be issued soon.

A poll conducted at the beginning of the panel showed that remote working was new for most of the participants.

Lunetta launched the discussion by asking Feliu about the threshold questions employers should ask themselves when considering an ADR program.

If the principal goal is avoiding litigation, responded Feliu, then employers “are really focusing on processing existing or incipient claims.” As a result, he said, employers “are going to focus more on arbitration–on ending up with a process that brings an ultimate result.”

But if the employer’s goal is more on problem solving and identifying tensions before they become disputes and the employer views conflict resolution as a strategic imperative, then the alternative approach of problem-solving should be embraced, he said. Here, the focus is different than pure litigation avoidance. Said Feliu, “Litigation avoidance or reduction of legal costs will be part–will be an effect, hopefully–of the problem-solving process but wouldn’t necessarily be the goal.”

This approach would also help the organization become more competitive, he said–to work more constructively and efficiently while, as an after-effect, avoiding litigation.

Feliu explained, “How do you do this? You do this is by opening up lines of communication, by necessarily undercutting to a certain extent the chain of command. You’re empowering employees to come forward with their disputes at whatever level and whatever the nature. And by doing that, you are creating a different kind of an organization that is less hierarchical, less structured, and more fluid.”

Wayne Outten added that ADR is ideal for workplace disputes. Because there already is an important relationship between both sides and the relationship is typically continuing, said Outten, it “is a perfect place for identifying problems and solving them early on.” He then presented two approaches that companies can embrace for dispute resolution procedures, the legal mentality and the human resources mentality.

The legal mentality, said Outten, is, “Let’s find a way to avoid lawsuits and to maximize the chances that we will win them with the least possible costs.” He said the HR approach is better, with goals of making employees happy and providing an environment where workers can be productive and focus on their jobs in an effective and efficient manner.

With the HR approach, Outten said, a program should start identifying problems at the earliest possible stage. “If a problem ripens into a dispute,” he said, the goal is “resolving the dispute in the simplest, quickest way possible and escalating only as and when you need to.” The HR approach also serves the lawyers’ perspective as it “tends to avoid disputes ripening into the possibility of litigation.”

Lunetta then asked the panelists whether having employees working from home in a number of states, possibly new states to the company, would affect the design of an ADR program.

Al Feliu responded that working from home would not alter or change the program itself, but it increases and amplifies “the need for it to be enforceable across 50 states and 50 jurisdictions.”

Wayne Outten discussed some of the positive and negative changes regarding the nature of workplace disputes that come with remote working. On one hand, the kind of disputes that arise from being in the same place, and having interpersonal reactions, presumably will be reduced with the increase in virtual offices, such as sexual harassment claims and bullying.

“On the other hand,” he said, “the opportunities for disputes are exacerbated because you don’t have as much free-flowing communication, and the ability to address things face to face.” Outten added, “Disputes may fester.”

From the management-side perspective, Husch Blackwell’s A.J. Weissler noted that the HR model Outten mentioned “has changed quite a bit in this remote work environment.” If the employees are typically working remotely, then having difficult conversations over the Internet should be acceptable, he said.  

But if a human resources or corporate employee is working from home while the business has essential workers who have been going to the employer’s worksite, then, says Weissler, “there’s a real disconnect there” that can make the on-site workers feel and sense that the employer is not in touch with the employee.

Moderator Kimberley Lunetta then asked panelists whether CPR has resources that can help employers think through these issues if they are considering any of the dispute resolution options that were discussed.

Outten said that this was the reason for CPR to be founded decades ago, with the goal of helping companies figure out how to avoid and resolve disputes.

Outten announced that CPR and its Employment Disputes Committee will be publishing a new set of rules for administered employment dispute resolution.  Accompanying the rules will include “draft programs that companies can adopt and adapt for their own use, which have within them the various different stages that employers can consider […] including things . . . [like] informal dispute resolution and problem solving, . . . open-door policies that invite people to take their problems up the chain of command,” ombudspersons, peer review processes and “all the way up to mediation which . . . is perfectly suited for employment disputes of all kinds.”

The conversation then revolved around the pluses and minuses for an employer of establishing a mandatory arbitration program.

“In reaching the decision that our arbitration program was going to be mandatory,” responded Charter Communications’ Cheryl Manley, “one of the factors that went into play was either reducing the litigation costs, or perhaps not having to deal with court litigation.” She mentioned that her company’s program was built to resolve issues in a timely manner and on an individualized basis.

She further added that her organization has many steps before getting to the arbitration phase to resolve the employment issue. And “when it finally does get to arbitration, we believe that there’s some certainty,” said Manley, “We believe that both parties have some skin in the game, in terms of selecting the arbitrator and primarily, it’s cost effective and efficient.”

Outten then answered a question about CPR’s employment ADR program and how it can help employers not only set up, but also ensure long-term success.

Outten reiterated the program’s strength in early-stage problem solving and early dispute resolution, and added that the program offers room for flexibility and adaptability in different workplaces.

Mediation with a third-party facilitator, he said, “can be extremely valuable and beneficial. It gives the parties an opportunity to air their grievances.” When it comes to arbitration, he said, every successful workplace ADR program really needs to comply “at a minimum,” with due process protocols.”

He then presented several key features of the due process protections (which CPR has adopted here), which include:

  • “The employee isn’t required to pay more than they would pay if they were going to file in court.”
  • “The arbitrator has the authority and power to provide any remedy that a court can provide so that there’s no takeaway of remedies for the affected employee.”
  • “The employee has a fair opportunity to pick the decision maker–the arbitrator–especially given the binding power of the decision of this person to resolve the dispute.”
  • “The employee has to have a full and fair opportunity to gather information in order to present the case and . . . [any] defenses.”
  • “The employee needs to have an opportunity to have counsel of his or her choosing.”
  • “The hearing itself should be reasonably convenient . . .  so the employee doesn’t have to go a long distance to have his or her day in court.”
  • Finally, “the arbitration should end with a reasoned decision, so the parties know what the arbitrator took into account, what the findings were on the evidence, and what the legal conclusions were in determining” the decision.

A.J. Weissler added that “there are great legal reasons” not to “cram down” arbitration in a workplace disputes program, citing fairness. He said that arbitrator selection is an important factor in presenting a fair process, with a say for the employees.

Al Feliu noted that there is a dearth of diverse panelists, but major providers have made strides and continue to work on the problem to enhance and ensure fairness.

Cheryl Manley agreed with the comments, and emphasized that panelists need to reflect the workplace population.

Manley discussed Charter Communication’s Solution Channel, which she described as a 2017 program to compel arbitration use—a mandatory program for newly signed-on employees, with about 10% of the company’s 90,000 employees opting out when it was launched.  She reported that the complaints are restricted to legal claims—non-legal disputes are addressed in other ways–that are submitted through a third-party vendor which create a record over the claim. She said the American Arbitration Association is the provider.  The company absorbs the AAA filing fees and the arbitrator costs. If either side is unsatisfied with the panel, they return to the AAA for more choices.

Weissler says arbitration should be part of any dispute resolution system but if it’s made mandatory and employees are forced to use it, he said, it is counterproductive and it creates problems going forward due to the “asymmetrical” views.

Weissler said he encourages mediation as a best option. He said he is skeptical of programs that outline steps that do not allow a course of mediation to be developed.

Feliu says he has been mediating for 30 years and familiarity has grown during his period of practice after skepticism.  He agreed with Weissler’s points, but noted that mandatory mediation in New York federal court, where he said he would have expected resistance—mandatory is counterintuitive, said Feliu—it has been just as successful as voluntary mediation over about the past 10 years.

Feliu said sometimes there is grumbling but mostly, when parties get to the bargaining table, they try to settle. And he said that while joint sessions are fading, flexibility is needed.  “Every mediation is different,” he said.

Wayne Outten said that he shared Al Feliu’s experience.  In the mid-1980s, he said, the plaintiffs’ bar “viewed this newfangled process as a conspiracy to take away their rights, and I soon discovered that was not necessarily the case and became a big advocate.”

Over the past 35 years, said Outten, mediation “has become quite normal.” He echoed Feliu again,  noting that when parties attempt mediation in good faith, it is successful.

Even in situations with a lot of open issues, he said, mediation “has a very high success rate, . . .  and is always worth trying.”

Cheryl Manley said that pre-pandemic, her company didn’t want anything done virtually or remotely—all depositions, mediations and arbitration hearings were done in person, exclusively.  The change was swift, she said. “Fast forward seven, eight, nine months, . . . when we finally emerge from this pandemic, we aren’t going to go back to all depositions in person, all mediations in person or hearings,” said Manley, adding, “In fact, I think that there is no reason . . . to start putting people back on planes traveling all over the country.  It is expensive. It’s time consuming.  And it is not efficient. “ She said that the “only issues” are “the occasional technological” problems.

A.J. Weissler said he has participated in virtual matters frequently during the pandemic, and found “an incredible benefit.” Having the people resources ready on video, whether from home or for those back in their offices, has “been an incredible thing,” he said, adding that he strongly supports virtual mediations.

Wayne Outten said he always has had a concern whether real decision makers would be in the mediation room.  “Now with virtual mediations,” he said, “that problem can be more readily addressed.”

Al Feliu said he has only done virtual mediations since his first in March.  “All of the impediments, and all of the arguments against them, have been rebuffed, “ he said. For example, he explained, he can evaluate credibility better on close-up video than across a bargaining table.

Feliu conceded that there is a different feel in an in-person gathering where people have committed to the process.  That intensity, he said, isn’t present where people are sitting on their couches, are more relaxed, with their dogs nearby.  “It’s just a different process,” he said.  “I don’t have the shrieking episodes. I don’t have a lot of emotions.  Is it good or bad? It’s just different.”

The result, he said, has been that he isn’t settling cases on the first day as much as he did at in-person mediations.

Addressing audience questions, Al Feliu said he discusses confidentiality with the parties with heightened concerns, noting that a potentially serious issue could be where extra people are present, and not visible on screen, as well as individuals texting on the side. “These are all serious concerns we need to get equilibrium on” going into the mediation, he said.

* * *

The author, a second-year student at New York’s Benjamin N. Cardozo School of Law, is a CPR 2021 intern. Alternatives editor Russ Bleemer contributed writing and research to this report.

[END]

The CPR European Advisory Board presents: “Meet CPR Distinguished Neutrals Based in Europe: Gill Mansfield”

The CPR European Advisory Board (EAB) continues it series, “Meet CPR’s Distinguished Neutrals in Europe” and today it presents its next Q&A, with Gill Mansfield.

Gill is a UK qualified barrister and CEDR accredited commercial mediator with over 20+ years international legal and commercial experience the majority of which has been spent as in-house counsel. She has held Head of Legal, General Counsel & Company Secretary, and Senior Counsel roles across the media, entertainment, creative and digital/technology sectors, negotiating complex deals and resolving international commercial disputes. Her experience includes working with innovative new businesses and disruptive start-ups as well as award winning TV producers, multi-national corporations and household name brands.

How did you get your start as a neutral?

I trained and practised as a barrister before moving in-house, so litigation has always been part of my professional DNA.  Whilst in-house I managed cross-border commercial and intellectual property disputes and litigation in courts throughout the World.  My first experience of mediation was representing a media company as its Head of Legal in a court ordered mediation of a commercial dispute that was being litigated in California.

This judge-led session was very different from the mediation process that I use today.  There was no joint session.  The two sets of parties never met and were never invited to meet at any point during the day.  However, the process was enough to pique my interest in mediation.  A friend later recommended the CEDR mediation training and that, as they say, is history.

It’s fair to say that having experienced mediation as a party has definitely influenced my approach as a mediator.

Who is your dispute resolution hero/heroine?

That would have to be the late and much missed David Richbell.  I, like many other UK mediators, owe a huge debt of gratitude to David as both a trainer and as a mentor. 

David was always enormously generous with his time and his expertise.  He saw any mediation where he didn’t take an assistant mediator as a wasted opportunity, and he encouraged those of us who he felt had promise to be actively involved in his mediations.  I can still vividly recall the excitement when David first suggested that I run one set of mediation meetings solo whilst he ran another set of meetings in parallel.  

He personified all of the character attributes that one aspires to as a mediator and dispute resolver:  warmth, good humour, inexhaustible patience and unassailable positivity, utterly unflappable, respectful and respected.  The things that I learnt at his side during those early years as a mediator continue to inform my mediation practice every day.  A true hero of the mediation profession.

What advice would you give to the younger generation looking for a first appointment as neutral?

It’s important to choose the right mediation training course but taking a five-day training in itself doesn’t make you a mediator.  It’s just the start of your journey.  So many people finish their training completely enamoured with the idea of mediation, passionate about the process and expecting the work to find them.  Sadly, it won’t.  I spent the early part of my mediation career working with some the UK’s most respected mediators first as an observer and then as an assistant.  In dispute resolution, as in any other field, learning your craft is vital.  Seek out people who you can learn from and opportunities to develop your mediation skills.  Working with community mediation organisations can be a great way to continue to build your skills (but don’t be surprised to find that many other aspiring mediators are also seeking this experience too).  The likelihood is that your first paid mediation will come from within your own network and in order for that to happen you need to build credibility and expertise.  You also need to build your network both in the industry and amongst those who instruct mediators.  That takes time and commitment. It’s not going to happen overnight and there is no silver bullet.

What is the most important mistake you see counsel make?

The biggest mistake that I see counsel make is failing to understand that their role in a mediation is very different from their role in the litigation process, and consequently preparing for a mediation in the same way that they would prepare for a trial: adopting a positional and adversarial approach. 

Those counsel who are most successful in representing their clients at mediation are the ones who understand that it requires a shift of mindset and a different set of skills.  I often tell counsel to set their litigator hat aside and put on their negotiator hat.  The mediation process allows everyone to take a step back from the litigation and it creates a real opportunity to explore options and solutions.  The fact that the discussions are confidential and without prejudice creates a safe space to work collaboratively with the mediator (and potentially opposing counsel) but this does require a shift in perspective and approach.

I see this very clearly in the way counsel approach Position Statements and their opening comments at the mediation.  Both of these are opportunities to speak directly to the client on the other side of the dispute.  They are opportunities to engage, persuade and influence the decision makers.  This is something that you don’t have the opportunity to do in the usual course of litigation where everything is filtered via lawyers.  Those counsel who simply rehash the pleadings, or take an adversarial approach, are missing a valuable opportunity.

If you could change one thing about commercial mediation, what would it be?

Commercial mediation still has a problem with the lack ofdiversity.  Perhaps that’s not surprising given that many commercial mediators are drawn from the legal profession where this is also an issue. 


This is slowly changing as the traditional stereotypes of what a mediator looks like are being broken down.  However, we need to be vigilant to make sure that talented mediators who are female, black or from an ethnic minority or who have a disability have the opportunities to advance in the profession.

It’s heartening to see that law firms are increasingly asking mediation providers to recommend mediators beyond those who might be seen as “the usual choices” and asking to see “new faces”, but we still have a long way to go to be a diverse and inclusive profession which properly represents the diversity of the communities that we serve. 

For which types of conflicts would you recommend ADR?

I’m going to focus on commercial mediation here as that is my particular specialism within ADR.  In my view, the vast majority of commercial disputes are suitable for mediation.  There are however certain types of cases where mediation is particularly beneficial.  These include cases where:

  • a speedy and cost-effective resolution of the dispute is desirable;
  • the opportunity cost in terms of wasted management time and legal expenses outweighs the potential benefits of litigation;
  • there are continuing personal or business relationships or ongoing contractual relationships that would be harmed by litigation;
  • a confidential process is required to avoid adverse publicity, preserve client goodwill and protect reputations;
  • control of the outcome of the dispute is important;
  • a party wants an outcome that could not be achieved in court. 

The litigation process is essentially binary: it’s win-lose and a win is usually quantified in purely monetary terms.  In contrast the mediation process allows the parties to craft a settlement agreement that meets their legal, commercial and personal needs.  Whatever those might be.  In a commercial context this could involve renegotiating the terms of a contract or agreeing terms for the transfer or purchase assets.  In terms of meeting personal needs, it might be gaining a better understanding what happened and why and receiving an apology.  These types of outcomes simply can’t be achieved through litigation.  I recently mediated an IP infringement case where much of what was finally agreed between the parties could not have been ordered by a court.

Mediation can also be used in the context of other ADR processes: when used within the context of an arbitration it may resolve the dispute completely or at the very least it can help to clarify and narrow the issues to be resolved. 

In your view, what makes CPR unique?

For me the thing that makes CPR really unique as an ADR provider is that it is not just an organization of neutrals and dispute resolvers.  Its membership and committee structures bring together in-house counsel across a range of different industries, partners and associates from leading law firms, academics and distinguished neutrals in a collaborative environment.   It is this broad stakeholder engagement and dialogue that gives CPR a unique perspective and allows it to be responsive to the needs of users of ADR. 

How Litigants View the ADR Options in Courts

By Alice Albl

At the Sept. 17 online CPR Institute Mediation Committee meeting, University of California, Davis, School of Law School Prof. Donna Shestowsky presented her research about the role courts play in encouraging alternative dispute resolution over a trial.

The study revealed that litigants seem to be unaware of ADR options when going to court, although knowing about some of these options—specifically, mediation–improve litigants’ opinions of the court itself.

This lack of awareness stayed relatively consistent among demographics, even among those with legal representation.  

“Repeat player” litigants were less likely than first timers to report uncertainty or confusion whether ADR options were available.

Shestowsky’s research observed the experiences of more than 350 litigants spread among the court systems of three different states.

The first system, in California, allowed litigants to choose between a trial, or opting into mediation or arbitration.

The second system, in Utah, assigned mediation as the default option but allowed litigants to convert their cases into an arbitration or trial.

The third system, in Oregon, statutorily required nonbinding arbitration for cases involving amounts in controversy less than $50,000. Litigants could opt-out by filing a “Motion for Exemption from Arbitration,” or by agreeing with their opposition to enter mediation.

All three court systems posted information online about available ADR programs and kept a list of approved neutrals on file. None required attorneys to educate their clients about the available ADR options.

Litigants in the study took a survey before and after their journey through the courts. The questions sought to gauge litigants’ awareness about relevant court-sponsored ADR programs, whether legal representation affected their awareness, and how awareness of court-sponsored ADR affected litigants’ opinions of the court offering the options.

The data Shestowsky reaped from these surveys revealed some unexpected findings. While roughly half of the litigants were unsure whether mediation and arbitration were available to them, another 20% wrongly stated these options were unavailable.

Without knowledge of the court systems’ sponsorship for mediation or arbitration, litigants most often considered negotiation as a means for dispute resolution, even before the prospect of a trial.  

While about a third of litigants considered mediation, knowing that the method was a court-sponsored option generally improved their opinion of the sponsoring court system.

Arbitration was only considered by about one quarter of the litigants, and knowledge of court sponsorship did little to affect litigants’ opinions of sponsoring courts. Shestowsky attributed this to the possibility that litigants had low opinions of arbitration as an option for their court-filed cases, which aligned with findings from her past research.

Having a lawyer did not make litigants more aware of ADR options, even when those options were offered, or even mandated, by the court system.

Shestowsky pointed out this universally low awareness rate of ADR options as an issue to address among courts, especially given how awareness seemed to improve court favorability.

One possible solution would be rules that require attorneys to properly educate clients about ADR options before engaging the courts, which could be enforced using penalty fees or an affidavit.

Shestowsky also suggested that courts implement “direct education.” This could involve bolstered advertisement of ADR options, a dedicated ADR helpdesk, and periodic information sessions. The professor, who serves as UC Davis School of Law’s Director of the Lawyering Skills Education Program, even envisioned an artificial intelligence-powered digital aide that could recommend options based on litigants’ specific needs.

While Shestowsky cautioned that her research focusing on three court systems may not perfectly reflect the general state of ADR awareness, the consistency of data among the diverse systems could point to a greater trend. To gauge this, the professor recommended that courts across the nation buck the trend of measuring success for ADR programs by their usage rates, and first look to their awareness rates by surveying those who do not use their ADR programs.

* * *

Donna Shestowsky previously discussed her research at “New Research Sheds Light on How Litigants Evaluate the Characteristics of Legal Procedures,” 34 Alternatives 145 (November 2016) (available at https://bit.ly/2ScA71w), which adapted and updated material from Donna Shestowsky, “How Litigants Evaluate the Characteristics of Legal Procedures: A Multi-Court Empirical Study,” 49 U.C. Davis L. Rev. 3 (2016) (available at http://ssrn.com/abstract=2729893).

* * *

The author, a CPR Institute Fall 2020 intern, is a second-year student at Brooklyn Law School in New York.

As the Singapore Mediation Convention Enters Into Force This Week, It Is Wait-and-Watch on Its Use

By Yixian Sun

It’s a historic ADR beginning.

The 46 countries—including the United States, China, India, Japan, Israel, and Switzerland—that last year signed the United Nations Convention on International Settlement Agreements Resulting from Mediation, known best as the Singapore Mediation Convention, have been joined by seven more since August 2019.

And now, the treaty is set to go into effect.

That group of 53 will preside over the treaty’s official effectiveness date, this week, on Sept. 12.  Under the treaty’s Art. 14, when Qatar became the third nation to ratify the treaty on March 12, effectiveness takes place automatically six months afterward.

The backers will commemorate the effectiveness with an “Entry into Force Celebration” which will stream live here on Saturday: www.singaporeconvention.org/events/scm2020.

The original group signed on last September in Singapore, providing the treaty’s name, and setting the stage for ratifications and effectiveness. 

Official acceptance happened fast. The treaty, which ensures that mediation parties can take their agreements across borders and get them enforced, automatically takes effect upon ratification by three countries. 

Fiji and Singapore had signed the treaty into law in their nations on Feb. 25, which Qatar followed six months ago.  Saudi Arabia, Belarus and Ecuador also ratified the treaty this year.

For an updated status of the Convention, see at https://bit.ly/3bc4Ww3.  

The interest demonstrated with the initial signings is an impressive number compared to, for example, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, well-known in the alternative dispute resolution community as the New York Convention. That 1958 treaty had 24 signatories when it came into force.

Indeed, the world’s view toward ADR has changed fundamentally since 1958.

The Singapore Convention applies to international settlement agreements resulting from mediation and concluded in writing by parties to resolve a commercial dispute. State parties to the Convention undertake to enforce such settlement agreements. The new Convention seeks to establish a streamlined and harmonized framework for cross-border enforcement of commercial settlement agreements, thereby promoting the use of mediation for the resolution of disputes arising from international business and trade.

Find a brief introduction and the full text of Singapore Mediation Convention are at the official website at www.singaporeconvention.org.

Within the past year in the CPR Institute’s Alternatives to the High Cost of Litigation newsletter, Piotr Wójtowicz and Franco Gevaerd provided an overview of some key features of the Convention, with a focus on the basic requirements for the treaty’s application to a specific settlement agreement.  See the authors’ analysis at “A New Global ADR Star is Born: The Singapore Convention on Mediation,” 37 Alternatives 141 (October 2019) (available at https://bit.ly/3gJf7JI) and also their discussion of the grounds for States’ or parties’ refusal of enforcement, “How the Singapore Convention Will Enforce Mediated Settlement Agreements Across Borders,” 1 Alternatives 9 (January 2020) https://bit.ly/3jAMdNL).

Some treaty features already have proven to be of great importance in the age of Covid-19. For example, in the face of increasing acceptance of, or at least acquiescence to, online ADR, the Singapore Convention does not incorporate the concept of a “mediation seat.” According to the United Nations Commission on International Trade Law, best known as UNCITRAL, while an arbitral award usually has a place of issuance to help determine its “foreign” nature, it can be difficult to connect a settlement agreement to a specific place or legal seat due to mediation’s inherently flexible nature. Report of Working Group II, UN Doc. A/CN.9/861 (2015) (available at https://bit.ly/2QIgopO).

The treaty also will not just be concerned with the differences between mediation and arbitration, but also about how business disputes are resolved in the 21st century. Negotiations are conducted in video conferences; agreements are developed and reached via emails, and multiple jurisdictions can be involved in one cross-border mediation.

The COVID-19 pandemic is accelerating these activities, since parties likely can’t travel to mediate, and at least some mediation sessions have to take place remotely even for those who prefer in-person meetings.

Wherever or however the mediation is conducted, the resulting agreement will qualify as “international” under Article 1 of the Convention (i) as long as  at least two parties to the settlement agreements have their places of business in different States; or (ii) when the parties have places of business in the same State, that State “is different from either [S]tate where the obligations of the mediated settlement agreement are to be performed, or the [S]tate with which the subject matter of the mediated settlement is most closely connected.” Timothy Schnabel, “The Singapore Convention on Mediation: A Framework for the Cross-Border Recognition and Enforcement of Mediated Settlements,” 19 Pepperdine Disp. Resol. L.J. 1, 21 (2019) (available at https://bit.ly/2GIGtmQ). The settlement agreement itself, however, is essentially “a stateless instrument.” Id. at 22.

Indeed, many have found mediation the most appropriate and least cumbersome commercial dispute resolution forum during the pandemic. It serves as an efficient and manageable process where parties are encouraged to sit together and come up with creative solutions to preserve both sides’ economic interests and long-term partnership. See, for example, Ivana Nincic, “The Impact and Lessons of the Covid-19 Crisis as Regards the Efficiency of Justice and the Functioning of the Judiciary–a View from the Mediator’s Lens,” International Mediation Institute (available at https://bit.ly/2YQmNDw).

One may even question if international mediation will become the “new normal” for many disputes. Nadja Alexander, “International Mediation and COVID-19–The New Normal?” Kluwer Mediation Blog (May 21, 2020) (available at  https://bit.ly/352B30f). See generally the CPR Institute’s web page ADR in the Time of Covid-19 at www.cpradr.org/resource-center/adr-in-the-time-of-covid-19.

Yet it is one thing to celebrate mediation’s increasing prevalence, but another to predict how successful the Singapore Mediation Convention is going to be. To be more specific, it remains to be seen whether and to what extent the potential users of the new treaty, namely multinational corporations, will be willing to invoke this brand-new framework and make necessary adjustments to their business and legal arrangement accordingly.

Here is an example raised in a panel discussion by Mark Califano, Chief Legal Officer at Nardello & Co., a New York-based international consulting firm that conducts investigations for corporations,  at this year’s American Society of International Law’s Annual Meeting. Under Convention Article 4(1)(b), mediators are expected to sign off on the settlement agreement or use other methods to indicate their involvement. Under Article 5(1)(e), serious misconduct by the mediator is a ground for refusing to grant relief.

While this design may be a reasonable requirement for the purpose of transboundary enforcement, it is, to certain extent, inconsistent with the common practice in places like the United States, where the process of mediation is highly confidential and the behavior of mediators is rarely subject to litigation.

Therefore, parties may want to draft a contract clause beforehand to make sure that whatever settlement agreement that comes out of the mediation process fulfills the requirements imposed by Singapore Convention. The Singapore Convention on Mediation and the Future of Appropriate Dispute Resolution, ASIL 2020 Virtual Annual Meeting (June 25, 2020) (available at https://bit.ly/34PHKT3).

In addition, the Singapore Convention’s limited application scope may prevent it from breaking the hegemony of the powerful, “all-encompassing” New York Convention.

Settlement agreements attained via mediation and negotiation and confirmed by the arbitral tribunal are enforceable under the New York Convention. On the contrary, Article 1(3) of the Singapore Convention excludes settlement agreements that have been approved and are enforceable as judgments or as arbitral awards from its scope of application.

As a result, cross-border businesses used to hybrid dispute resolution procedures might prefer to keep mediation as part of the arbitration proceeding, where “the success or failure of mediation will not affect the enforceability of the final award rendered by the arbitral tribunal.” Ashutosh Ray, Is Singapore Convention to Mediation what New York Convention is to Arbitration? Kluwer Mediation Blog (Aug. 31, 2019) (available at https://bit.ly/32FEjf7).

Aside from international treaties, the Singapore Convention may need to compete with the pre-existing domestic or regional legal regimes in different jurisdictions. Under Article 12(4), the Convention should not prevail over conflicting rules of a regional economic integration organization if relief is sought in a member State of that organization.

Thus, if the European Union adopted the Convention, practitioners would need to explore how to reconcile the Convention with the EU Directive on Mediation, which does not authorize direct enforcement of settlement agreement. Iris Ng, The Singapore Mediation Convention: What Does it Mean for Arbitration and the Future of Dispute Resolution? Kluwer Mediation Blog (Aug. 31, 2019) (available at https://bit.ly/34Sdw1U).

In Singapore, parties to international mediated settlement agreements are allowed to pick and choose between mechanisms of the Singapore Mediation Act 2017 and the Singapore Convention according to their needs and features of individual cases. Nadja Alexander & Shou Yu Chong, Singapore Convention Series: Bill to Ratify before Singapore Parliament, Kluwer Mediation Blog (Feb. 4, 2020) (available at https://bit.ly/3bbGlYf).

Despite all of this, we should agree with Piotr Wójtowicz and Franco Gevaerd who noted with their Alternatives articles linked above that the Singapore Mediation Convention is another milestone in international dispute resolution. The fact that the Convention was drafted and finalized in fewer than five years is itself an encouraging indication that “joint international effort is still viable,” the authors noted in their second article in January.

International businesses and lawyers will not refuse to diversify and expand their toolkit with a simplified enforcement framework. What the ADR world needs now is more practical experience and some legal precedents for the Convention to mature.

The author, a student at Harvard Law School in Cambridge, Mass., was a 2020 Summer Intern at the CPR Institute, which publishes CPR Speaks.

The CPR European Advisory Board presents: “Meet CPR Distinguished Neutrals Based in Europe: Klaus-Olaf Zehle”

The CPR European Advisory Board (EAB) continues it series “meet CPR’s Distinguished Neutrals in Europe” and today it presents its next Q&A, with Klaus-Olaf Zehle.

Klaus-Olaf is a German ADR practitioner based in the northern part of German.  His activity focuses on mediation, moderation of meetings and workshops and coaching.  A qualified industrial engineer, Klaus-Olaf spent 20 years in leadership positions at local and international IT consulting firms. He also sat on the board of a public telecommunication and outsourcing provider.  In 2004, he started a second career as mediator, coach, moderator and leadership trainer with a natural special focus on customers from technology and engineering.  He is a Certified Mediator from the International Mediation Institute (IMI), Den Haag and qualified as Certified Mediator according to German law. In addition to the CPR Panel of Neutrals, he is also on the panel of mediators for commercial disputes and an arbitrator for IT conflicts at the Hamburg Chamber of Commerce.  Klaus-Olaf is very active in mediation in and around Hamburg where he lives: he teaches mediation in the Masters in Programme Management at the International School of Management and Networking & Network Building in the Masters in Corporate Management at the Business and Information Techology School.  He speaks and practices in German and English.

Klaus-Olaf has kindly agreed to contribute to our series and give us his insight on his mediation practice:

How did you get your start as a neutral?

Before any education on mediation, I got my first experiences as an Executive in a company by solving conflicts between departments which had different targets.

Who is your dispute resolution hero/heroine?

Gary Friedman and Jack Himmelstein from the Center for Mediation in Law are my mediation heroes. Not only did I benefit from two practitioner trainings with them, but they have also influenced the German mediation scene from the early days of mediation in the country. Nearly all of my coaches in mediation had undertaken their first education in mediation from Gary and Jack.

Their concentration on the power of understanding characterizes the way in which I now personally conduct mediation.

From Germany my mediation experience was mainly influenced by Stephan Breidenbach and Jutta Lack-Strecker.

What advice would you give to the younger generation looking for a first appointment as neutral?

Do not expect to be the neutral that all parties in dispute are waiting for.

It takes a long time to build a reputation. Networking in local and nationwide mediation associations is helpful. There, you can get experience from other neutrals.

Also, local events are very important; you should try to make presentations or speeches about the benefits of mediation and other dispute resolution processes at such events. It’s all about educating your potential clients.

Short articles or essays about dispute resolution in local newspapers or journals also can be of help.

Were you ever the first in doing something?

Yes, on many occasions, I was an innovator or early adopter. In my profession as a consultant, I was one of the first to offer mediation. A lot of my colleagues followed me in this specialization.

Together with three colleagues, we developed a specific consulting concept for disputes within a corporation, which is based on the principle of disputes resolution by a neutral dispute. We named this concept equidistance consulting.

We also developed a new methodology called Congruation (Congruence & Integration).  This process refers to the need to show the differences in the positions and interests of the various members of a team or a board in order to solve latent conflicts.  This is a paradigm I learned from coaching by Gary Friedman and Jack Himmelstein,

What makes your conflict resolution style unique?

While I am conscious that it is not – from a purist point of view – part of a neutral’s role or acceptable, I sometimes switch from a mediator role to that of an experienced person with an outside view of the situation and provide advice and ideas on how to resolve the conflict. I always do this with the prior full consent of all parties involved.

One example: During a mediation process with several partners of a law firm and relating to managing issues, I switched my role at some point and reported to them on best practices that I teach in leadership courses. These best practices are intended to give the parties the possibility to learn from each other.  The parties are free to decide together whether they want to follow this kind of best practice or an adjusted version of the same.

What has been the most difficult challenge you have faced as a neutral?

I mediated a team conflict, which after some discussions resulted in there being one person opposed to nearly ten colleagues. I was convinced that even in this specific setting the conflict could be resolved by mediation. During the process, the significant imbalance of one against ten became more and more obvious, and I started to feel inclined to support the one-person party. I therefore recommended that they reduce the number of participants in the group of ten persons. This proposal was not accepted, and we stopped the mediation process.

What is the most important mistake you see counsel make?

Counsels who insist on prolonged discussions after a clear getting to “yes” phase. They should accept that their client does not need additional reasons or to reopen the discussion.

I sometimes have the feeling, that counsels like to make themselves valuable by showing that their view – when it is different from the negotiated agreement – is still the only right way.

If you could change one thing about commercial arbitration, what would it be?

Mediation should be mandatory before going to court or arbitration.

Now let’s turn to a specific topic: what is your approach to cybersecurity and data protection in international dispute resolution?

Online mediation is one of the most efficient ways to resolve disputes among parties who are located far away from each other. The current discussion on security risks of some platforms should be addressed at the beginning.  The benefits should be balanced against the risks of confidentiality. All parties have to agree on the video conference platform to be used. Those documents that contains material worthy of protection could be shared in encrypted form via a separate communication channel and parties should be instructed not to share such material on screen during the video conference.

In your view, what makes CPR unique? 

During my master studies in mediation, I learned about CPR in conjunction with the CPR pledge. I liked this idea and based my master thesis on this topic. The CPR pledge is for me still one of the key elements to dispute resolution.

Do you have any concluding remarks or an anecdote you would like to share?

My 2005 published master thesis on “Enhancing the acceptance of Alternative Dispute Resolution (ADR) practices between corporations through voluntary commitment, considering the example of the CPR Pledge and its transferability to the German market” was included in a PWC Study on ADR, which has had a lot of impact in establishing a series of conferences on ADR in Germany. Out of these conferences a round table of large corporations was established which now developed a pledge for Germany. CPR has indirectly influenced the acceptance to ADR in Germany.