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

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).

Dispute System Design: Advancing Predictability, Cost Savings and Efficiency In-house

By Erin Gleason Alvarez

The problem with disputes is that they never go away.  Yes, they are resolved one by one – maybe even a group of them are settled at once.  But there are always more lurking: another claim, waiting to be filed; another complaint, making its way to your desk.  It’s a cycle and everyone knows that.

Many things in this dispute world are out of your control – or at least it feels that way.  Litigation costs money – sometimes lots of it.  It takes time – sometimes lots of that too.  Both of these things are hot commodities and less than ideal expenditures from a business perspective.  Thus, the pressure on the in-house attorney to manage risk, manage cost, settle, settle at the right cost at the right time… it’s always there.

If we know that there will most likely always be a disputes cycle, forever costing money and taking precious time, what is the best way to manage this and prevent logjams? There is an answer.

Dispute System Design

Perhaps it makes sense to take a cue from the business side of the house and view this dispute cycle as another business process to be mapped and managed.  At CPR, we’ve heard many stories affirming this strategy as a successful one, including my own experience in-house.

Nonetheless, year after year, in survey after survey – when in-house counsel voice their concerns over cost and efficiency – there is rarely a mention of dispute resolution systems.  For example, in the 2017 Litigation Trends Annual Survey produced by Norton Rose Fulbright, only 9% of corporate counsel reported that internal processes or controls for reducing the volume of litigation was an effective strategy; only 2% favor a regular risk mapping process.  Instead, a majority of corporate counsel responding to the survey rely on regular training programs for lawyers and early case assessment as effective ways to manage litigation.

What if you combine training + early case assessment + risk mapping + protocols?  Picture it: A coordinated system to resolve disputes, designed specifically to address the in-house concerns about spending too much money on litigation and wasting time that might be better spent elsewhere.

This is where “dispute system design” comes in.  Dispute system design is the process for identifying the trends and pain points in your dispute resolution/litigation practice, and then implementing process improvements along with measurements of your success.

How It Works

Here is a brief overview of what a dispute system design strategy entails:

  1. Conduct an assessment:  What’s vexing, trending, anticipated in your disputes portfolio?  This may be identified through surveys, interviews and data analysis.
  2. Process improvement:  What solutions can you identify to address these issues?  How is mediation being used – can it be done earlier?  What negotiation techniques are most relied upon?  How is arbitration handled?  Some cases must inevitably be routed to litigation – what is the best way for identifying them early?
  3. Implementation: How will you implement the strategies you have identified as most sensible for your work?  Training?  Metrics?  Employee evaluation? Changes to law firm relationships? Processes for identifying better mediators and arbitrators?
  4. Measure success: What criteria will you require to determine the level of success achieved?  Are you mainly concerned about saving litigation cost?  Cost associated with employee time? Case volume?  Settlement rate?  Or are there qualitative goals that should be considered as well, including employee job satisfaction and opening more opportunities for career growth?

Areas of Application

Just as systemic approaches to governance, compliance and contract management are well settled  corporate strategies, dispute system design and management is a practical way to manage exposure.  Bespoke litigation strategy will always have some role in the cycle.  But let’s face it:  Are most of your cases unique and deserving of their own individualized strategies and budgets?   Are the facts so  different that the analysis must be carefully tailored, time and again?  Sometimes.  Most of the time – probably not.

A dispute system design approach may be implemented to address your litigation portfolio, formalizing early case assessment measures, monitoring and reporting on their efficacy and helping to trigger other dispute resolution mechanisms where needed (e.g., direct negotiation processes, mediation, streamlined arbitration, etc.).

Dispute system design work may be applied in other contexts as well.  For example, many reports cite in-house concerns over the rise in cybersecurity disputes over the next year.  Analyzing your current cyber disputes portfolio, in order to develop methods for triage and settlement approach is one way to insert some predictability into an area that is causing a fair amount of anxiety in-house.  The same can be said for other areas of growing concern to in-house counsel: rising environmental concerns, the ever-present threat of mass disasters, and continued changes in health care – all of which are stressors on litigation budgets.  It is proactive to address these risks in a systematic way to enhance predictability, efficiency and cost controls.

Do You Need It?

In determining whether dispute system design is right for your organization, consider these factors:

  1. Are you currently satisfied with the length and cost involved in managing disputes?
  2. Have you identified any issues relating to dispute outcomes (in terms of quality, time to resolution, or expense required)?
  3. Are there any obvious issues that you can address to make your processes more efficient?
  4. Do you have the bandwidth or expertise to conduct this type of review for your company?
  5. What is the ROI in retaining someone to conduct the review for you?
  6. Would reporting on dispute resolution savings, or other efficiencies, be of value to the organization?


Dispute system design is an important function for in-house counsel to utilize in managing disputes in a systematic way.  A coordinated approach lends to predictability in dispositions, cost savings and many other efficiencies.


Erin Gleason Alvarez launched Gleason Alvarez ADR in 2017.  She formerly served as the Global Head of ADR Programs at AIG, where she designed dispute resolution systems and served as an advisor to state agencies in the development of mass disaster protocols following Hurricanes Irene, Ike, Sandy and mass claims resulting from wildfires fires in California. 

Erin now serves as a mediator and arbitrator in commercial and insurance disputes.  She also serves as a consultant to corporations and law firms in designing dispute resolution systems. 


“New and Improved New Year’s Resolutions” For Judges, Politicians and Policy-Makers

By Judge Steven I. Platt (Ret.)

As the new year approaches, I welcome the opportunity in this space provided by The Daily Record, to reflect on the last almost 11 years since I “retired” as a full-time judge and entered a very different world of Private ADR, consulting, as well as public speaking, lecturing and teaching for diverse organizations. I have also been lucky enough and honored, during that time, to have been approved by the Court of Appeals to be recalled as a Judge and have done so enthusiastically and learned even more with the added perspective of my other work and experience incorporated into my decision making.

That said—and with I hope the proper degree of humility, as well as a recognition that our hopes and dreams should not be born out of naiveté or unrealistic expectations for ourselves, the three branches of government, or, for that matter, the human race—I offer the following, hopefully improved over previous years, based on new experiences and additional perspectives, suggested 2018 New Year’s Resolutions for Judges, Politicians and Policy-Makers:

1 – Don’t refuse to reference reality when you make personal, political, legal, and even medical decisions. You can aid that process by listening and paying attention to people and ideas with which you do not agree, in lieu of reinforcing or restricting your sights and sounds to those pictures and words which reinforce your previously held views.

2 – Don’t even try to defend the indefensible. It won’t work.

3 – Recognize that isolating yourself, your community and even your country—if you are a President, Governor, Legislator, political or community leader, policy-maker, or even a Judge—will not make the complexity of an increasingly complicated world go away. On the contrary, it will make your decision-making progressively more flawed and exponentially more dangerous to you and those affected by your self-inflicted defective judgement.

4 – Recognize that the choices which you desire are usually not the options that reality dictates that you must choose from. Wishing otherwise won’t change that reality.

5 – Don’t insist that “the other side” accept and subscribe to your perception of reality as a pre-condition to further communication, whether that “other side” is competing with you or is attempting to collaborate with you. Better to analyze and address your counterparts’ interests in the context of their reality if you wish to move your idea or process forward.

6 – If you are trying to persuade a third party of the merits or wisdom of your position on an issue—whether that third party is a jury, judge, the voters of a federal, state, or municipal district or the elected or appointed officials put there by the voters to decide your fate or your client’s fate—do not forget or ignore who those person(s) are and the intellectual world they live in. To do so will be fatal to your cause.

7 – Be intellectually curious if it is within your DNA to be so. If it is not, check with the best and the brightest in the medical profession to arrange a transfusion of DNA from a known intellectually curious person. Your life will be much more interesting and fulfilling.

8 – Recognize that there are many “Monuments to Persistence” whose success in whatever professional, business, personal field they chose was, in large part, the result of their persistence. Persistence in the pursuit of a good idea is worth emulating.My favorite illustration of this came from my now deceased friend and mentor, the first Chief Judge of The District Court of Maryland, Robert F. Sweeney, who in an interview upon his retirement, reflected upon what it took to accomplish what Governor Mandel had described as a “gargantuan task” – the creation and implementation of a new Court, The District Court of Maryland.

On May 5, 1971, as he was sworn in as the first Chief Judge and at the time the only Judge of The District Court, Chief Judge Sweeney said “Insofar as I am able, I shall attempt to make this court what the people of Maryland are entitled to have it be: A Court of integrity and a forum in which the personal and the property rights of all citizens can be freely and fairly adjudicated by judges learn in the law—judges who are dedicated to the principle of equal justice under the law for all.”

Upon his retirement, virtually a quarter of a century later, illustrating the wisdom and concomitant success of persistently confronting the reality of a corrupt culture in accomplishing that goal, Chief Judge Sweeney recounted that experience as follows: “There were judges who were racists, who had alcohol problems, who were wife beaters and who thought they had found the greatest 10-2 job in the world. I outlived the bastards. The whole collection of them.”

The moral of this story is obvious. The Monument is the District Court of Maryland!

9 – Share in the optimism of Bernard Baruch, an advisor to four Presidents, about the future based on his faith “in the power of the human mind to cope with the problems of life.” Share in his conclusion after a lifetime of advising Presidents that “To nothing so much as the abandonment of reason does humanity owe its sorrows.” We should therefore heed the warning based on history and experience that our failures as individuals and communities have been, and will be the consequences of “action without thought” which usually follows thoughts unaccompanied and therefore devoid of analysis.

10 – Believe, as did Bernard Baruch, that our society can in fact solve our problems by placing our trust in the unfettered intellect, reason, wisdom, and compassion of smart individuals not in crowds.


I would footnote these updated suggested “New Year’s Resolutions” with the following afterthought based on my continued observations of all three branches of government and the politics, economics and psychology which drives them: The collective blogosphere, talk radio, cable TV, internet and advocacy groups, politicians, and other public figures—whether they claim omniscience, heavenly blessings or other supernatural powers or origins—do not address any reality except their own. That said, let’s try analytics in 2018. We might like it. In any case, Happy New Year!

This post is reprinted with permission from “A Pursuit of Justice,” a blog by Judge Steven I. Platt (Ret.) that focuses on the intersection of law, economics, politics and the development of public policy.  Judge Platt currently owns and operates his own private Alternative Dispute Resolution Company, The Platt Group, Inc. through which several retired judges and experienced practitioners offer mediation, arbitration and neutral case evaluation services to business, governmental agencies and their lawyers mostly in complex litigation and disputes.  Judge Platt’s experience and vocation make him an expert in conflict resolution particularly in complex disputes whether they are political, economic, legal, or as most often the case all of the above. Judge Platt can be reached at info@apursuitofjustice.com or via his website at www.theplattgroup.com.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of CPR.

Litigation vs ADR – Different Strokes for Different Folks

steven_125By Judge Steven Platt

My last column described the cultural, economic and structural changes in the legal and business communities that have transposed “Alternative Dispute Resolution” (ADR) from a “cross-practice” which litigators engage in when they are contractually required or court-ordered to do so to a fully-integrated but increasingly separate and distinct set of dispute resolution services to be offered by law firms or other private “Dispute Resolution Firms”, “Groups”, and “Individual Professionals”. As I pointed out in that column the Judiciary has also, albeit belatedly, in the last 25 years recognized this primarily economic, but also legal and political reality and begun to provide or at least encourage individual and corporate litigants to seek cost effective and time sensitive alternatives to full-blown litigation.

That trend is now firmly in place and developing to the point where even some courts, specifically the Chancery Court in Delaware, have begun to formally offer other dispute resolution services as alternatives to their traditional inventory of services. Until recently courts restricted the services they offered to litigation and “settlement conferencing.” The Delaware Chancery Court has expanded this to institutionalize arbitration, evaluative mediation and neutral case evaluation services by the “Sitting Chancellors.”

This has produced a further change to the structure, operations, and culture of mid-size to large law firms albeit slowly because of entrenched resistance based on law office economics and egos. Until recently for example under the prevailing law firm business models and processes, transactions belonged to the “Corporate Department”, wills and trusts to “Trusts & Estates (T&E)” and Bankruptcy to their own discrete practice areas or Boutique Law Firms. Within these typical structures “disputes” have been the exclusive domain of the litigators.

It should not therefore be surprising to encounter resistance to this change by litigators who have historically settled most of their cases (98%) without help from a third-party neutral either privately retained or court-imposed. Many litigators on their own have adapted to the changing client expectations for a faster and less expensive resolution of their disputes by engaging in more extensive and intense settlement negotiations as a part of the litigation process or as Robert Marguilies, a business litigator in New Jersey calls it – “Litigoatiation.”

This resistance and the reason for it however are based on a fundamental misunderstanding of the purpose and processes of Alternative Dispute Resolution. What those who resist the expansion of the techniques utilized to resolve disputes beyond the traditional litigation process even when it includes a large element of “litigotiation” do not comprehend is that the use of these alternative dispute resolution techniques is not just to settle the specific dispute before them but to resolve latent client goals and concerns which have led to their dispute. These other concerns almost always include addressing the underlying causes of the dispute as a means of preventing future conflict between the parties or even with third parties.

This is not always the case as for example where the dispute is purely over money such as in negligence cases resulting from automobile accidents, etc. But even in cases where professional liability issues are to be resolved, there are clearly other issues and interests to be addressed besides purely dollars and the merits and value of the claims and defenses. These can include reaching a resolution that does not engender future litigation or conflict between the policy holder and the carrier, as well as future underwriting issues between the policy-holder and the carrier. There can also be issues and interests related to professional discipline and registration involved.

The resolution of these issues are not easily achieved by the standard “position-based” settlement negotiations by lawyers that typically occur at various stages of a case which is being litigated. Furthermore it is clear to anyone who has engaged in both that settlement discussions between litigators with multiple and alternating agendas are of a different nature and quality than those led by a qualified neutral ADR professional committed to only finding an amicable comprehensive resolution to the dispute and the underlying cause of it. The former is most often intermittent, limited, unconcentrated (mixed in with litigation issues) and unfocused on a comprehensive resolution. The later is structured, concentrated and focused solely on a comprehensive settlement of all issues including those which caused the dispute to occur in the first place.

Litigators who are not trained as Mediators are also likely to confine their position-based negotiations to remedies available through the court in which the litigation is filed. This arbitrarily restricts the ability of the parties to satisfactorily and comprehensively resolve their dispute in a way that addresses the underlying issues which produces the conflict as well as eliminate the conditions which might create future controversies.

Finally, particularly in Maryland, position- based negotiations directly between lawyers acting as advocates for their clients are of necessity constrained by case law from The Court of Appeals. This case law in effect makes the issue of whether an attorney for a party who recommended a settlement based on what an “expert” now says was “insufficient information” as a result of inadequate or incomplete discovery a “jury question.” This exposes lawyers to professional liability if there is not universal acceptance that he/she complied with the standard of care within the “Expert Witness Community” whose ads can be found in many legal magazines. This exposure as a practical matter can be limited if not eliminated by skillful drafting of retainer agreements and/or settlement agreements. But if it is not, then the attorney in order to insulate himself or herself from a future adverse finding by a jury (not made up of other lawyers) will instinctively refuse or at least delay engaging in settlement discussions which may also be limited for these same reasons. This will have the effect of adding both unnecessary time and expense to the conduct of the case before even discussing settlement.

Which dispute resolution technique should the parties utilize in the Multi-Door Courthouse or Conference Room of the future? Stay tuned to this same newspaper and column for the answers to that question next month.

This post is reprinted with permission from “A Pursuit of Justice,” a blog by Judge Steven I. Platt (Ret.) that focuses on the intersection of law, economics, politics and the development of public policy.  Judge Platt currently owns and operates his own private Alternative Dispute Resolution Company, The Platt Group, Inc. through which several retired judges and experienced practitioners offer mediation, arbitration and neutral case evaluation services to business, governmental agencies and their lawyers mostly in complex litigation and disputes.  Judge Platt’s experience and vocation make him an expert in conflict resolution particularly in complex disputes whether they are political, economic, legal, or as most often the case all of the above. Judge Platt can be reached at info@apursuitofjustice.com or via his website at www.theplattgroup.com.

Thoughts on Non-Administered Arbitration

johnwelborn By

Non-administered arbitration (“NAA”) is an informal dispute resolution process designed to proceed without the involvement of a separate administering entity. The arbitrator and parties administer the proceedings.

The proceedings may be guided by a procedure the parties define, or the parties may agree to use institutional rules and procedures such as Rules for Non-Administered Arbitration published by the International Institute for “alternative” Conflict Prevention and Resolution (“CPR”). The objective is a dispute resolution process that is truly alternative – more efficient, flexible and expeditious than both adversarial litigation and formal administered arbitration.

I was recently an arbitrator in an NAA proceeding under the CPR Rules. This posting provides some of my reactions.

Avoid litigation in disguise

The effectiveness of the NAA alternative is only as good as the joint effort of all participants – the parties, their representatives and the arbitrator. Everyone involved in a non-administered arbitration proceeding must share the objective and make certain that the speed, flexibility and efficiency that the NAA process offers are realized and that the proceeding doesn’t devolve into litigation in disguise.

Parties who agree contractually to resolve their disputes in an NAA process seek a non-appealable, binding, just and fair result. That’s the low hanging fruit. Those contracting parties also deserve fruit higher up the tree – they deserve a dispute resolution proceeding that is focused, flexible, and less costly and time-consuming than formal administered arbitration or litigation. Everyone involved has an obligation to work to that end.

The approach

An important factor in meeting that obligation is how each participant approaches the NAA proceeding. Helena Tavares Erickson, a Senior Vice President at CPR, published an article on point some time ago (2006). Among her several valuable messages is the view that those involved must approach the dispute “as a problem to be solved, not a contest to be won.”

I agree. Contests to win are more expensive, more time consuming and less controllable than joint problem solving efforts. The benefits of an NAA proceeding are best realized in a problem solving context.

The schedule – agree and stick to it

As soon as the parties acknowledge the existence of a dispute to be arbitrated under NAA rules, they engage a mutually acceptable arbitrator. Then all concerned, including the arbitrator, should quickly (within days, not weeks or months) confer and agree to a date for a substantive hearing on the issues. This date should be written in stone, i.e., should be changed only (i) due to force majeure events and (ii) if and when not changing the date would mean genuine prejudice to a party.

The date should be realistic in terms of time needed for preparation. The original agreement which calls for dispute arbitration may provide unrealistic timing, e.g., 60 days to select and appoint an arbitrator and get to hearing on complicated factual/legal matters. It’s fine to override that prior agreement in the face of an actual dispute.

What shouldn’t be overridden is the clear intent of the parties to have the dispute heard and resolved quickly. Not getting to a substantive hearing on the merits of the dispute many months or more after arbitrator appointment is not the expeditious, economical dispute resolution process the parties originally bargained for.

Core issues – early identification and focus

Identification of the core issues in dispute, and early focus on those issues, can and should happen in arbitration, especially NAA. The flexibility to make this happen is a major advantage of the NAA process.

To get there, the parties and their representatives need to find the courage to work together to prioritize the factual and legal issues that comprise the dispute. This makes it possible to bring these core issues to the arbitrator for preliminary, non-binding review, or perhaps even for formal determination. Either way, the expertise of the arbitrator, the primary reason he/she was retained, is taken advantage of early on, and the possibility of mediation, or even settlement, of the entire dispute is increased.

If the parties and their representatives are reluctant to single out core issues for early scrutiny, the arbitrator should be ready to encourage them in that direction. The arbitrator needs to be sensitive to the time/cost value of bringing his/her expertise into the dispute in a constructive way early on.

This preliminary issue review requires two things:

1. Confidence on the part of the arbitrator — the ability to express a high level opinion (make a call) based on the experience and expertise that he/she is bringing to the table without first having to see every possible bit of data or hear every possible legal argument.
2. Parties and party representatives who are willing to listen and act on the arbitrator’s early stage opinion regardless of whether they agree that this preliminary arbitrator opinion is binding.

Atmosphere – informal, open

This is a challenge, especially for lawyers trained in the courtroom. I’m not suggesting that everyone arrive at each session in blue jeans and flip-flops. I am suggesting that the participants strive for an atmosphere that is conducive to problem solving, that fosters professionalism as well as mutual respect and friendliness, and that leaves room for important openness and listening.

For the parties and their representatives, this requires:

• Self-control in terms of what each participant brings to the table,
• Fewer motions and objections in response to what has been put on the table,
• The courage to make their own conscience-guided determinations of what is truly relevant and helpful to the effort, and
• Confidence that the arbitrator is good enough not to need formal motions in order to see every weakness in what has been presented.

For the arbitrator, this is about not letting evidentiary issues get in the way. Let your experience, judgment and expertise (the qualities that brought you to this proceeding in the first place) tell you what you don’t need to know or listen to in order to do your job.

The record – do we need one?

The reasons for making a record in a formal dispute resolution proceeding don’t exist in an NAA proceeding. There won’t be an appeal on the merits of the final award, so that’s not a reason. Preserving a possible challenge to the final award based on arbitrator conflict or bias is also not a valid reason for a record. The potential for such a challenge should be raised and resolved long before the proceeding commences. That leaves the possible need for a record for reference purposes for final briefing and arguments to the arbitrator, and the making of the record can be tailored to that need.

So, this is not to advocate that NAA proceedings not be recorded. I am suggesting that the participants first work together to determine why a record is needed. They should then tailor the making of the record to the identified need before engaging in the expense and the additional logistics of making a record of all evidentiary presentations.

CPR is a leading NAA advocate. Their website is a valuable tool for those interested.

In summary

• The benefits of an NAA proceeding are best realized in a flexible, problem solving context.
• The judicial process, the formal administered arbitration process, and all of the evidentiary and other rules and procedures that go along with those processes, are designed for win-lose contests. They don’t allow for the flexibility that is an important benefit of an NAA proceeding, and they cost money and consume time.
• Participants (parties, representatives and arbitrators) who are committed to the expediency and effectiveness of the NAA process must avoid engaging in litigation in disguise. They should welcome and take full advantage of the flexibility that comes from working together to solve a problem.

John F. (Jeff) Welborn is Special Counsel at Welborn Sullivan Meck & Tooley. He specializes in serving as a mediator/facilitator in disputes that involve (U.S. and international) oil and gas, mining or other natural resource matters.  He has almost 40 years of experience in oil & gas and mining transactions and matters, both in the U.S. and globally, in natural resource regulatory matters and in negotiating and drafting natural resource development agreements, financing arrangements, and conveyance documents.

Copyright (2016) John F. (Jeff) Welborn – Welborn Sullivan Meck & Tooley, P.C.  All Rights Reserved. This post originally appeared on the firm’s blog at http://www.wsmtlaw.com/ and is republished with permission.

Why You Should Always Mediate

AnnaBy John R. Goldman and Anna M. Hershenberg (pictured)

If we had a nickel for every time a client instinctively refused to consider mediation to resolve a dispute, neither of us would have to work anymore. We have heard every excuse in the book:

We do not want to come in from out of town.
It is going to be a waste of time.
We are going to outspend them in litigation
so they will give up.
We want to crush them in litigation.

And our all-time favorite:

Suggesting—or even agreeing to—mediation
makes us look weak.

The notion that mediation makes a client look “weak” is an unfortunate gut reaction, typically fueled by the misconception that pounding the table and fighting your adversary on every issue is the only way to show strength in litigation. Sure, there are circumstances where litigation is necessary and a mediated resolution is impossible, but those situations are few and far between. Let us explore why it is almost always prudent to mediate—especially for budget-conscious corporate counsel trying to resolve disputes most efficiently (i.e., cost-effectively) so they and their company can focus on accretive business.

1. You Might Actually Resolve the Dispute. First (and foremost), you might actually settle the case and save lots of dough in unnecessary and unproductive litigation expense. That would be good, right? Look, we all know that litigation is often time-consuming, distracting, expensive and unpredictable. Even if you are convinced you have a “slam dunk” case, elephants sometimes fly in courtrooms (and when they do, it can vastly alter—and increase the cost of —that case you thought was definitely a winner). Mediation gives you a chance to resolve the dispute in a much more controlled environment with a smart mediator you have a hand in selecting. A savvy mediator typically redirects the parties away from unproductive competitions over litigation issues and strategy and towards consideration of a mutually beneficial business solution. Indeed, if mediation happens quickly enough (i.e., before the parties become entrenched in litigation posturing), it is possible—even likely perhaps—that the settlement will include the parties doing productive and mutually profitable business together going forward.

2. You Always Learn Things (and That Is Really Good). Even if mediation does not result in settlement right away, you never leave a mediation empty-handed. Going through the mediation process educates you (hopefully early on) about the strengths and weaknesses of your position, as well as those of your adversary. A good mediator is an expert at helping both sides to most sincerely and realistically evaluate the case—both from a legal perspective and from a practical perspective. That analysis provides critical information as to what a fair settlement might be. This information is always valuable to corporate counsel in setting strategy and managing expectations going forward. The very process of mediation lends itself to this. In trying to push each side toward settlement, the mediator—as a neutral third-party (often a former Judge)—will flag the legal and practical obstacles each side will face should the case continue and will provide valuable insight into how those weaknesses may play out in front of a Judge and/or jury. A neutral assessment of the viability of the claims and defenses in the early stages of the case provides corporate counsel with the opportunity to most effectively manage the case (and the expectations of his or her business people) and be in a much better position to determine strategy—for example, whether to recommend settlement or to recalibrate litigation tactics going forward.

3. In the Immortal Words of the Late, Great Philosopher Yogi Berra, “It Ain’t Over ’til It’s Over.” Even if the case does not settle right away, a good mediator is persistent and stays on the matter. He or she often (indeed, almost always) remains an independent and trustworthy sounding board for both sides. Many times after “unsuccessful” initial mediations sessions, we have reached out to the mediator and so have our adversaries. This means there is always the possibility that the matter will settle at a later point in the litigation. In our experience, we have found that parties who have already had at least one  mediation session—even if “unsuccessful”—are often more likely to return to mediation at the mediator’s invitation (or after tiring of throwing more money at the litigation) because they trust the mediator and the process, have a sharper awareness of the strengths, weaknesses and settlement value of their case and, in many instances, because opposing counsel have had an opportunity to establish a productive working relationship.

4. Suggesting or Agreeing to Mediation Is Not Weakness. It Is Strength. This one really is our favorite. It is the one where we scratch our heads, furrow our brows and remind ourselves that when really smart people get really angry, they become their own worst enemy. (Typically, the clients who tell us mediation is a sign of weakness are the same ones who will not attend a settlement meeting unless it is at their office and are the same ones who write us emails thanking us for convincing them to give mediation a try). The goal of litigation should not be to win an award for being the best posturer. It should be to reach the most efficient resolution. Mediation is often the best route to that result. In this context, it is confounding why anyone would think it demonstrates weakness when it is actually just the opposite. In fact, suggesting or agreeing to mediation sends a clear signal that you are ready to persuade an intelligent and experienced neutral that your case is better than your adversary’s. Who would not want to seize that opportunity? And remember, mediators (unlike Judges) have manageable dockets and can spend the time to understand the nuanced arguments that might cause elephant lift-off in a courtroom.

In the end, budget conscious corporate counsel are, and should always be, looking for ways to save—and make—money. Given the reality that almost every case settles before trial anyway, it is in everyone’s best interest to reach that settlement as early in the process as possible. This is especially true for in-house corporate counsel, who have the unenviable task of having to explain to management how the company could possibly have spent so much money on a litigation for the privilege of ultimately settling a case on terms equal to or worse than those that could have been obtained early on (and at a much reduced cost). Mediation is an excellent way to try to avoid that nightmare.

Anna M. Hershenberg has recently joined CPR as its Vice President, Programs and Public Policy. John R. Goldman is a litigation partner at Herrick, Feinstein LLP, Anna’s former firm.

This article was originally published in volume 33, number 3 of the Winter 2015 publication of the Corporate Counsel Section of the New York State Bar Association. It has been republished with permission.

Removing Anger in a Mediation Allowed Parties to Settle

StephenGilbert By Stephen P. Gilbert

I conducted a mediation several years ago between two companies in the healthcare field, one a small high-tech company (“Company A”) and the other a much larger conglomerate. The smaller company had invented certain cutting edge technology (“Technology A”), which held great promise but required a substantial investment of money and personnel (scientists and engineers), each of which Company A had little of, to finish the R&D work and bring Technology A to market.

Company A had entered into a joint development agreement with the conglomerate to conduct the R&D work and, if possible, commercialize the technology, which Company A hoped would be used in some of the conglomerate’s products. The agreement provided that if Technology A were commercialized and used in the conglomerate’s products, the conglomerate would pay a running royalty to Company A. The few scientists and engineers of Company A worked closely with the scientists and engineers of the conglomerate and disclosed significant confidential information to them to aid in the R&D work. The conglomerate also loaned substantial capital to Company A (covered by a promissory note) because Company A was operating on a shoestring.  The agreement contained a stepped dispute resolution clause: in case of a dispute, executives of the two companies were to confer to try to resolve the dispute; if that did not work, they would go to mediation; and if that did not work, to arbitration.

A year or two after entering into the joint development agreement, the conglomerate acquired a small company (“Company B”), which had developed its own technology (“Technology B”), which, with sufficient and successful R&D work, could be used instead of Technology A in the conglomerate’s products. Both Technology A and Technology B were also potentially useful in third-party products, not just the conglomerate’s products.

Sometime after acquiring Company B, the conglomerate terminated the joint development agreement, requested payment on the promissory note (as it had the right to do) and eventually started marketing products incorporating Technology B.

Company A accused the conglomerate of purposely trying to harm Company A and prevent commercialization of Technology A. The actions of the conglomerate to which Company A pointed included acquiring Company B, terminating the joint development agreement, demanding payment of the debt, and using Company A’s confidential information to help develop and commercialize Technology B. Company A said it would now have to try to raise money to pay the debt and at the same time would have to try to find a new R&D partner, since it still could not afford the R&D work required (nor did it have sufficient personnel) to commercialize Technology A.

Company A said commercialization of Technology A would now be substantially delayed or altogether prevented and that it might have to cease operations. It noted that the conglomerate would not have to pay any royalty for using Technology B in its products because the conglomerate owned that technology through its acquisition of Company B and, if the conglomerate wished to do so, it could license Technology B to third parties without worrying about competition from Technology A, since Technology A was not yet ready to be commercialized (and might never be).

After reviewing the two confidential mediation statements and speaking ex parte with each side prior to the mediation session, it seemed settlement was possible but getting there would not be easy.

There were about ten people from each side present at the joint mediation session: Company A had business people, investors, technologists, and outside counsel; the conglomerate had business people, in-house lawyers, and outside counsel. There were no technologists from the conglomerate present. I suspected this mediation was make or break for Company A; I doubted it had the money to litigate against the conglomerate.

Each side made a short, polite opening statement, and we then split up for caucus sessions. I started with the Company A team. It was the first time I was speaking in a caucus session with anyone on the Company A team other than its outside counsel. Company A did not mince words: it was positive that all of the conglomerate’s actions had been part of a long-term plan to harm it and delay commercialization of or kill Technology A. Everything it said about the conglomerate was laced with anger.

I went to see the conglomerate team. The conglomerate felt it had done nothing wrong. That was the same message that had been conveyed to me by its outside counsel during my discussions with them before the mediation session.

One of the conglomerate’s in-house counsel who was present had been involved with the joint venture when he was a junior member of the conglomerate’s legal department (he was now significantly higher up in the department). I asked what he had done with respect to the joint venture, and it became apparent he was a goldmine of information. He had participated in drafting the joint venture agreement, had helped “administer” that agreement for the conglomerate, knew about the substantial money it had spent and R&D efforts its technologists had made on Technology A, knew (at a high level) about the technical problems that had been encountered, and knew (at a detailed level) how the decisions to abandon the technology and terminate the agreement had been made. He also knew about the “wall” the conglomerate had put in place between its people working on Technology A and those working on Technology B.

During the pre-mediation session ex parte discussions, I had asked each side that, if possible, people familiar with the joint venture relationship be at the mediation, but the depth and breadth of this individual’s knowledge was more than I could have hoped for. I asked if he would feel comfortable sharing some of this information with the other side, and I also asked lead in-house and lead outside counsel if they would feel comfortable with his doing so. They asked why; I said I thought it might be helpful, added that I didn’t see any downside (since all the information would likely be disclosed during discovery if mediation didn’t work), and received yesses from everyone. Then I went to see the Company A team.

I told them I had had a helpful discussion with the other side and asked if they would be interested in hearing some information directly from the other side (since I could never do as good a job as the conglomerate’s people could of imparting the information). The Company A team said it saw no downside, and I asked both sides to reconvene for a joint session.

It was less than two hours since the original joint mediation session had started. I asked the in‑house counsel who had given me all the information to address the other side. I said that in particular what might be helpful for the other side to hear was the history of the conglomerate’s effort to develop Technology A, the problems it had encountered, and how it had come to make the decisions to abandon Technology A and terminate the agreement.

The conglomerate’s in-house counsel began by recounting the history of his involvement and then turned to the R&D efforts that had been made and the money that was spent. At first, the Company A team just listened but soon started asking questions, which the in-house counsel answered without hesitation. I didn’t speak again until there seemed to be a logical break point, at which time I suggested we have lunch.

After lunch, he was asked more and more questions by a few members of the Company A team, some rather pointed. Others from the conglomerate’s team started to chime in. It was a lively, sometimes loud discussion. I said little except to suggest breaks when I felt it was appropriate and to remind everyone it would be better if people spoke one at a time so everyone could hear what was being said. We broke for dinner and agreed to reconvene the next morning.

The next morning, the Company A team started by discussing what it would like to see in a settlement. Bargaining ensued. Agreement was reached late afternoon, and a heads of agreement (which provided for subsequent negotiation of a comprehensive agreement) was negotiated and executed, after which we all shook hands, each side thanking the other for participating and congratulating it on reaching agreement.

It was then that the key decision-maker of Company A shared with me and with the key decision-maker of the conglomerate the following. At the end of the first day, while the Company A team was returning to its hotel, he said to his team that in view of what they had heard from the conglomerate’s in-house counsel who had spoken at length and provided answers to their questions, they might have been wrong about what had happened and about what they had been sure was the conglomerate’s bad faith. His team sat at dinner that evening talking about what they had heard and came to agree with him. Once that happened, their feelings of anger dissipated and they started to focus on how to resolve the dispute.

We were lucky to have in attendance a smart individual from the conglomerate’s side who had sufficient first-hand knowledge of the entire situation and could present information (including answering probing and pointed questions from the other side) in a non-confrontational, believable way. There is no way of my knowing, but I think it would have been difficult, if not impossible, to have reached settlement at that time if the anger Company A felt and had expressed to me so strongly had not been removed.

Stephen P. Gilbert (www.spgadr.com) is a CPR Distinguished Neutral, CEDR Accredited Mediator, American Arbitration Association Commercial Master Mediator, Fellow of the College of Commercial Arbitrators, Fellow of the Chartered Institute of Arbitrators, Fellow of the American College of e-Neutrals, Member/Panelist of the Silicon Valley Arbitration & Mediation Center, and was a computer programmer, a chemical engineer, and a patent attorney.

A Mock Challenge under the CPR Rules for Administered Arbitration of International Disputes – An Overview

By Ksenia Koriukalova

On December 6, 2016 CPR’s Young Attorneys in Dispute Resolution (“Y-ADR”) and New York International Arbitration Center (“NYIAC”) hosted a seminar in New York City. The event featured a panel discussion on hot topics in international dispute resolution in 2016, as well as the mock challenge of an arbitrator under the CPR Rules for Administered Arbitration of International Disputes (“CPR Rules”).

The mock exercise was based on a hypothetical case involving the challenge of an arbitrator after a draft award had been circulated based on his alleged connection to the officer of the winning party, as well as on the views he expressed in his prior publications. The arbitrator in question served on a three-member panel which rendered a unanimous award in favor of one of the parties. The draft award signed by all three arbitrators was circulated to the parties by the chairman of the tribunal, and indicated that it would become effective if no comments were received from either party within 10 days.  The award was not delivered by CPR as required under its Rules. The losing party filed a request to correct the award within 20 days of the date of the Award, as provided for under Rule 15.6 of the CPR Rules. It simultaneously challenged one of the arbitrators. The challenge alleged “evident partiality” based on the fact that the arbitrator had been connected to the winning party’s CFO on LinkedIn for four years, and the two of them served on several committees of the college they had both graduated from. Another ground for the challenge was the alleged issue conflict, based on the arbitrator’s prior publications on the legal questions raised in the arbitration.

The mock challenge was considered by a panel of three CPR Challenge Review Board members, which included James H. Carter of WilmerHale, Lawrence W. Newman of Baker & McKenzie, and Hon. Curtis E. von Kann (Ret.). Anna Tevini of Shearman & Sterling LLP argued the case on behalf of the challenging party, while Ank Santens of White & Case LLP represented the party opposing the challenge.

The challenging party argued that the challenge was admissible, and that the challenge should have been granted, as the circumstances of the case allegedly gave rise to justifiable doubts as to the arbitrator’s impartiality. The challenge was based on Rules 7.5 and 7.6 of the CPR Rules, as well as on the provisions of the CPR Challenge Protocol.

The counsel stated that the challenging party had timely filed the challenge within 15 days of the time it had become aware of the respective circumstances, as provided for in the CPR Rule 7.6. She explained that submitting the challenge at the late stage of the proceedings was due to the arbitrator’s failure to disclose the relevant facts, which he allegedly had a duty to do. She also pointed out that, although the challenge was filed after the 10-day period for commenting on the draft award had lapsed, that did not make the award effective and the challenge – inadmissible, as the latter was submitted within the 20 days granted under CPR Rule 15.6 for seeking corrections of the award.

On the merits of the challenge, the counsel argued that the arbitrator’s connections to the other party’s CFO on LinkedIn and via college committees, his prior publications expressing views favoring the winning party’s position in the arbitration, and his failure to disclose these circumstances gave rise to justifiable doubts as to his impartiality. She referred to the 2004 Code of Ethics for Arbitrators in Commercial Disputes to support the argument that even the “appearance of partiality”, not necessarily actual partiality, satisfied the justifiable doubts standard.

The party opposing the challenge argued that the challenge was inadmissible, because the challenging party had been able to learn about the relevant facts from public sources well before the time of the challenge. The counsel referred to U.S. case law, the practice of England, France and Switzerland, as well as to the provisions of the American Arbitration Association and the CPR Rules applicable to challenges to prove that the right to challenge had been waived.

She further argued that the CPR Rule 7.5 “justifiable doubts” standard for arbitrator disqualification was not satisfied. The counsel referred to the IBA Guidelines on Conflicts of Interest in International Arbitration, which put arbitrators’ social media contacts on a “green list” and as such do not create even an appearance of bias, and thus do not require disclosure by an arbitrator. The same is true about prior expression of opinion on an issue arising in an arbitration, where such opinion does not focus on the case at issue. Finally, counsel argued that the arbitrator had no duty to disclose the facts at issue, and, in any event, non-disclosure was not an independent ground for disqualification.

After the oral arguments, the members of the CPR Challenge Review Board panel deliberated in front of the audience. They concluded that the challenge should be denied, as none of the facts referred to by the challenging party created grounds for disqualification of the arbitrator.

The mock was an interesting exercise which not only focused the attention of the attendees on current legal questions, but also demonstrated how the challenge of an arbitrator under CPR administered arbitration works in practice. Stay tuned for other upcoming Y-ADR events in 2017!

Ksenia Koriukalova is a CPR Fall intern

Avoiding and Resolving Information Technology Disputes (CPR Master Guide)

By Meghna Talwar

The latest survey released by Queen Mary University of London, in collaboration with Pinsent Masons (“the Survey”), highlights the growth of ADR in Technology, Media and Telecommunications (TMT) disputes. The Survey records 67% of the total disputes which are IT related.

Foreshadowing this important development, in 2005, CPR’s IT Committee released its master guide titled “Avoiding and Resolving Information Technology Disputes” which provides detailed information about resolution of IT disputes with the help of ADR mechanisms. The master guide’s 7 chapters provide different methods for addressing IT disputes from avoiding them in the first place to resolving them by arbitration. The first chapter gives companies a head start to set things in place prior to dealing with external parties. The chapter provides cues on how companies can assess, prioritize and define their goals and identify the possibility of dispute in the long run in order to plan their resolution techniques right from the beginning.

Chart 5 of the Survey states that 61% of the disputes related to IT systems are caused due to delay. The survey also mentions that such delay may be caused due to several attributing factors rather than one cause. Chapter 2 of the master guide suggests practices which companies may adopt to avoid delay. The chapter which is titled “Avoiding Disconnect Between Negotiation and Implementation” describes ways in which companies can formulate healthy negotiations with other parties thereby building a strong working relation with them. The chapter also focuses on how parties can develop a good understanding of the project as well as their own interpersonal relations which could ultimately lead to limiting the risk of contracting any disputes.

While Chapter 2 discusses building strong relations, Chapter 3 encapsulates the technique of building a strong project foundation based on strong partnerships. The chapter highlights the advantage of building partnerships at an early stage and describes methods to sustain such partnerships once they are formed. Also, the chapter offers interesting suggestions on conducting workshops with stakeholders to create synergistic relationships.

Often guidelines are limited to dos and don’ts of a process which are purely theoretical in nature. However, Chapter 4 of the master guide carries out case study of an IT dispute which enables companies to understand the practical implications of the master guide. The case study is an interesting concoction of facts and analysis with suggestions from the IT professionals who comprised the CPR IT Committee. Thus, the master guide provides a well-rounded view of IT disputes and the complications involved therein.

The Survey states that 50% of the respondents prefer mediation followed by 47% who prefer arbitration. Hence, there is an earnest intention on the part of the companies to resolve disputes without resorting to courts. However, it would be effective to resolve disputes at a preliminary level. Chapter 5 of the master guide speaks about the use of hierarchical positions to defuse disputes at an early stage. The chapter also emphasis on the need for protecting stakeholders, thereby maintaining a dispute-free atmosphere.

Chapter 6 introduces the concept of appointing a standing neutral. The chapter describes a standing neutral as someone who is appointed as a neutral in advance of any conflict. The appointment of a standing neutral could save the parties a substantial amount of time and cost in a way that the parties would get neutral assistance immediately on detecting a dispute without having to search for it when the dispute arises.

It is understandable that in certain cases it is impossible to avoid disputes despite adopting prevention mechanisms. Proliferation of social media is an example of unavoidable disputes. The Survey recorded 93% disputes arising out of social media attacks and 54% disputes arising out of traditional media attack. Chapter 7 of the master guide describes the dispute resolution program which companies may adopt if avoidance strategies do not work. The Survey points out the importance of Dispute Resolution (DR) policies which companies adopt. It stated that only 25% of the respondent companies did not have a DR policy. Thus, Chapter 7 could be helpful for companies which fall within the 25% bracket and could give the remaining 75% some tips for improvement, if required. The chapter also introduces the CPR Rules on Expedited Technology Dispute Resolution which includes rules for both arbitration and mediation proceedings.

The CPR master guide was introduced long before the introduction of the Survey. However, from the Survey it is quite evident that the issues revolving around IT disputes that were discussed in the manual remain to be a cause of concern, even today. Hence, the master guide proves to be an effective tool for addressing such problems and acts as a catalyst to innovate and introduce mechanisms for resolving IT related disputes.

Meghna Talwar is a fall intern at CPR.

To order a copy of CPR’s Master Guide, “Avoiding and Resolving Information Technology Disputes,” click HERE. And be sure to browse our many other publications in The CPR Store HERE.