#CPRAM21: Too Much or Not Enough? The Arbitrator Disclosure Issue, Analyzed

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

Here are notes on the Jan. 28 closing panel of the second day of CPR’s 2021 Annual Meeting. Moderator Deborah Greenspan, a Washington, D.C. Blank Rome partner focusing on mass torts and complex disputes, served as moderator for the Ethics session.

She introduced the panel, starting with Dana Welch, an arbitrator for nearly 20 years who is based in Berkeley, Calif. Welch focuses on complex commercial and employment matters. She is a fellow of the Chartered Institute of Arbitrators  and the College of Commercial Arbitrators, where she is an executive committee member. Before she became an arbitrator, she was the general counsel of a San Francisco-based investment bank, and a Ropes and Gray partner.

The second panelist was David Pryce, the managing partner of Fenchurch Law Ltd. in London, which is the first U.K. law firm to focus exclusively on representing policyholders in insurance disputes. His practice focuses primarily on construction industry risks. Wherever possible, said Greenspan, Pryce tries to approach disputes in a way that maintains or ideally strengthens the commercial relationships between those involved

The third panelist was Adolfo Jimenez, a partner in the Miami office of Holland and Knight.  He is a litigation attorney focusing on international disputes. He heads the firm’s International Disputes team, and he is chair of the Miami International Arbitration Society.

Greenspan opened by discussing the ethical challenges faced in arbitration, focusing on disclosure, in a session that provided Ethics continuing legal education to qualifying attendees. The panel’s first topic was the issue of repeat players, where an arbitrator is repeatedly selected or appointed by a particular entity or a law firm.

Pryce started off the conversation by presenting a recent U.K. Supreme Court case, Halliburton v. Chubb. He described the case’s background for the online audience.

Halliburton Co. had provided services for Transocean Ltd., the owner of Deepwater Horizon, the Gulf of Mexico oil rig that exploded in 2010.  Halliburton faced various claims along with oil company BP and Transocean. They were all part of the same proceedings. Halliburton settled those claims against it for about $1.1 billion.

Halliburton made a claim under the general liability policy it had with insurer Chubb. Chubb refused to pay the claim on the basis that Halliburton had entered into settlements that were unreasonable. A dispute ensued and the general liability policy provided for an ad hoc London arbitration with three arbitrators, one arbitrator to be chosen by each of the parties and a third arbitrator chosen by the party-appointed arbitrators.

If the arbitrators couldn’t agree, the third arbitrator was to be appointed by the High Court in London. In front of the High Court, each of the parties put forward several candidates. After a contested hearing, the High Court chose Chubb nominee Kenneth Rokison QC, an arbitrator in Reigate, U.K. Rokison was “a regular arbitrator in uniform arbitrations,” explained Pryce, “and Halliburton’s perception . . . was that he was someone that is generally appointed by insurers rather than policyholders.”

Prior to him being appointed, Rokison disclosed relevant points to the proceedings. Rokison said that he previously acted as an arbitrator in several other arbitrations including Chubb. He acted as a party-appointed arbitrator by Chubb and he was currently acting as an arbitrator in relation to references that included Chubb.

The High Court didn’t regard any of those appointments as being an impediment to his appointment in the Halliburton-Chubb dispute and they didn’t call into question Rokison’s impartiality.

Three months after his first appointment in 2015, Rokison accepted a further appointment by Chubb to act as an arbitrator in relation to a claim against it by Transocean, which as the overall owner of Deepwater Horizon was also facing similar claims to the ones that Halliburton had been facing. The dispute between Chubb and Transocean also related to the reasonableness of settlements which Chubb refused to pay on a similar basis for the reasons it refused to pay Halliburton.

Rokison disclosed his involvement in the Halliburton arbitration to Transocean, but he did not disclose to Halliburton that he accepted the Transocean appointment.

The following year, Rokison accepted another appointment in relation to an arbitration between Transocean and different insurers, and that was not disclosed either.


After finding out about the second and third appointments, Halliburton wrote to Rokison and raised concerns about these appointments.

Rokison responded that it had not even occurred to him that he was under any obligation to disclose the second and third appointments to Halliburton. Halliburton called for him to resign, raising concerns about his impartiality with regard to Chubb.

It’s apparent that Halliburton was just as concerned, explained David Pryce, and perhaps even more concerned, about a second issue–that Chubb would potentially gain a tactical advantage as a result of being able to find out what Rokison’s views were on certain issues, because they would be making submissions in the second arbitration which will be relevant to the decision that Rokison was facing in deciding the Halliburton arbitration.

A High Court claim was issued by Halliburton seeking Rokison’s removal under U.K. Arbitration Act Section 24, dealing with situations where circumstances exist for a justifiable doubt about the arbitrator’s impartiality.

The High Court and the Court of Appeal both dismissed Halliburton’s application, so it went to the Supreme Court.

The Supreme Court made the following key observations in reaching the decision:

  • First, the obligation of an arbitrator to act fairly and impartially is a core principle of arbitration, and under English law, the duty of impartiality applies just as much to party-appointed arbitrators, sole arbitrators, and presiding arbitrators. Presiding arbitrators like Rokison in Halliburton v. Chubb aren’t required to be any more impartial than party-appointed arbitrators–“Everyone is required to be impartial,” explained Pryce.
  • Second, the Supreme Court confirmed that the test under English law to establish whether an arbitrator had a real possibility of biases is an objective test. “When the fair-minded informed observer is looking at that, they should take into account various considerations including the factual matrix of the case , . . the role of the arbitrator in the case, and expectations regarding what an objective observer may take into account,” said Pryce. In that regard, market practices are relevant, but in some areas, overlapping appointments may be more likely to give rise to an appearance of bias than others.
  • Finally, in relation to the arbitrator’s duty of disclosure, the Supreme Court held the disclosures are not a question of best practices and that disclosures can only be made if the parties that confidentiality obligations are owed give their consent.

The key takeaway from this case is that “disclosure is not an option,” said Pryce, because disclosure doesn’t trump confidentiality.

“The unfair advantage is not the same thing as a lack of impartiality,” Pryce said, adding, “There is just no remedy for unfair advantage.” Even though repeat business might suggest bias in some cases, it is going to depend on market practice.

He further added that in some areas like treaty reinsurance, overlapping appointments are commonplace and parties are not concerned as there are repeat users “all the time.”

Pryce added that it is much more challenging when where there is a one-off user in a dispute with a repeated user. “From the perspective of someone who was a policyholder such as Halliburton,” said Pryce, “a one-time user in this situation, against an insurer who’s going to be a repeat user, the Supreme Court decision for me feels a little bit tougher.”

Panelist Dana Welch said, “I’m not sure a U.S court would have reached the same decision.  . . . We take it for granted in the United States that you have to disclose every business relationship that comes to mind.”

She then shared that California’s Judicial Council has enacted a rule that requires that the arbitrators not only have to disclose looking backward, but they have a duty to disclose looking forward. Arbitrators are required to disclose at the time of appointment whether they are willing to take future business from either a party who is appearing in that case or a law firm that is appearing in that case.

If the arbitrator discloses that they can take future business, they can be disqualified at that point if someone objects. Once the arbitrator accepts the possibility of future business, and then proceeds in the future to take that business, they must provide notice to the previous parties and the law firm that they have done so. At that point, the parties have no right to disqualify the arbitrator.

Panelist Adolfo Jimenez also shared that from an ethical perspective, repeat business in arbitration presents two problems that also were identified in the Halliburton case.

“You can have a situation where you’re going to have one party that’s better informed and an arbitrator that’s hearing evidence that is related to two separate cases,” said Jimenez, “but they are related cases that may influence their view while a set of attorneys who aren’t parties to that other proceeding is ignorant of all . . . that evidence, all that information.”

Second, Jimenez noted, is the risk of inappropriate communications. “Simply because you can does not mean that you should,” said Jimenez, noting that there can be as a result of such contacts an erosion of trust in the process, with one of the parties believing that they’re being affected.

Dana Welch also emphasized that the arbitrators should be careful in order to preserve the integrity of the process in the face of repeat business. She said:

There is a financial incentive if you get repeat business.  And for each one of us who serves as a neutral, every time we get repeat business, we really need to think long and hard about whether we can truly serve as a neutral in a proceeding with a law firm that appoints us a lot or a party that appoints us a lot.  . . . What Adolfo said is right: There’s a difference between ‘can’ and ‘should,’ and it’s an extremely important difference in order to preserve the integrity of the process.

After a participant asked about the future of London-based insurance arbitration in light of the Halliburton decision, David Pryce responded that a single decision shouldn’t call into question the city’s role in insurance arbitration.  He said that when there is a situation with a “one-off” buyer of arbitration services and a repeat user of arbitration services, the court should be extra careful not to go for the appointment of someone who is used frequently by repeat buyers.

“It was an unfortunate choice by the High Court,” said Pryce, adding that if that sort of choice is repeated again and again, “it looks like the deck is being stacked against policyholders,” and that would be a problem for insurance arbitration in London. But he added that as a policyholders’ representative, he did not think the deck is usually stacked against his clients.

[For even more on Halliburton, see the latest issue of Alternatives to the High Cost of Litigation: Adam Samuel, “Multiple Appointments, Multiple Biases: The U.K. Supreme Court Does Arbitrator Disclosure,” 39 Alternatives 19 (February 2021) (available directly at https://doi.org/10.1002/alt.21880).

* * *

Moderator Deborah Greenspan then invited panelists to discuss the expectations parties have about the status of a party-appointed arbitrator.

Panelist Adolfo Jimenez started off the conversation by saying that the duty of impartiality permeates throughout the entire U.K. and U.S. legal systems, and that most arbitral institutions require that arbitrators be neutral.

Jimenez also noted, however, that there sometimes are justifications for repeat businesses–for example, specialized arbitration proceedings such as those at the London Maritime Society of Arbitrators, where parties prefer arbitrators that are particularly qualified. When there is a limited number of qualified individuals, repeat business is an option, said Jimenez.

A second justification is to allow for party autonomy.

He further noted that the Code of Ethics for Arbitrators in Commercial Disputes adopted by CPR Dispute Resolution has the assumption that the arbitrators will be neutral. Even in jurisdictions which allow for repeat business, he noted, neutrality is still expected and required.

Panelist Dana Welch also noted an important reality in arbitration. She said, “When a party chooses an arbitrator, even if it’s a sole arbitrator and not a party-appointed arbitrator, all parties hope that the arbitrator is going to rule on their behalf. Therefore, they are looking for somebody who is going to see things from their point of view.”

She further noted that CPR Dispute Resolution rules provide a process for challenging a party-appointed arbitrator if either side believes that a party appointed arbitrator is not neutral. Reading from CPR Administered Arbitration Rule 7.5, she said: “Any arbitrator may be challenged if circumstances exist or arise that give rise to justifiable doubt regarding that arbitrator’s independence or impartiality.  . . .” She praised the rule and its challenge process for when neutrality isn’t observed.

Greenspan then asked the panelists about the ideal steps parties should take when selecting arbitrators.

Welch said she is a strong advocate of both parties interviewing the arbitrators to understand their management style or their approach to the issues.

Jimenez added that one should be allowed to communicate with an arbitrator to make sure that the arbitrator is comfortable with the cases’ technical issues but should not get into discussing the substance or facts of the case, noting that a red line exists in between.

* * *

Moderator Greenspan then asked the panelists on how to deal with the reality that people from different backgrounds and different jurisdictions have different expectations when it comes to ethical challenges.

Jimenez agreed that different jurisdictions have different norms. He suggested that practitioners can look to journal articles and general expectations of limits that are employed for international disputes. He pointed out that “what may be improper or incorrect in one place is going to be perfectly acceptable [elsewhere]–that’s a real challenge when you’re dealing with a cross-border dispute.”

Greenspan then discussed how parties can enhance trust when implicit or explicit biases exist. When arbitrators are appointed by a party, Welch responded, “it would be the height of denial, to say that there isn’t some impetus that you feel or allegiance that you feel to that party. You really have to struggle against that and understand that you’re a neutral in all senses.”

Welch added that arbitrators need to be conscious of the kind of bias that arises when a party picks them just like they need to be conscious of the kind of bias that can arise when they have repeat businesses.

* * *

The next topic of the panel was about disclosures.

Welch first expressed that the level of disclosure is an interesting question in this age “where everything is known about everybody,” and so much information is out already on social networks. The question, she asked, is “How much is there an obligation for us to disclose versus a party to investigate?”

She then presented two cases.

In the first case, an arbitrator ruled against a claimant, and the respondent was a law firm. Afterward, the claimant did an Internet search and revealed a 10-year-old resume of the arbitrator with a recommendation from a partner from the respondent’s firm.  An appellate court decided this was enough to vacate the award.

Welch concluded, “What it shows is that the courts will look at the arbitrator for disclosure rather than . . . say to the parties to investigate that.”

The second case she presented was decided just a month ago, she said. An arbitrator rendered an award against the claimant. The claimant then found on the Internet that the arbitrator was a founding member of GLAAD, an organization supporting gay rights. The claimant then argued that because he was active in the Catholic Church, and because the arbitrator is active in social justice causes like gay and lesbian rights, the arbitrator had an inherent bias against the claimant.

The Court of Appeals rejected this claim, Welch reported, as it could not find any relationship between the claimant’s allegation and facts of the case.  She noted that “even California” has limits on challenging impartiality. Welch concluded:

What you need to draw from these cases is that the main obligation of disclosure is on the arbitrator, not on the parties. You need to disclose everything that comes to mind. If it comes to mind, you should be disclosing it, but you don’t need to disclose who you voted for president, or what you are active in unless there is a specific issue in that case before you.

Fenchurch’s David Pryce said that “there is a dividing line between . . . bias, something that gives the appearance of bias and what is simply just having better knowledge.” Having better knowledge on its own, he said, doesn’t give rise to either risk of or appearance of bias.

He further reflected on Halliburton v. Chubb. The disclosures, which relate to the same party in another “really high-stakes arbitration . . . about sums over a billion dollars” and issues that are almost exactly the same in both arbitrations, “aren’t insignificant things.”

But, said Pryce, “if we get to a situation where arbitrators feel they need to disclose lots of insignificant things, then I think everyone’s time is just going to be wasted unnecessarily.”

* * *

Greenspan presented the ethics panel’s final topic: “If you’re a mediator in a case and then you are later asked [in a case that doesn’t settle] to be an arbitrator, or if you are an arbitrator and then you’re asked to mediate the case,” how should such a situation be approached?

David Pryce said the moves are uncommon in the United Kingdom.  He added that huge challenges for the med-arb, mixed-mode ADR setup exist, because in mediation, parties are hoping to take advantage of the ability to share things with a mediator that they wouldn’t share with their opponent–and certainly not with the person that needs to make a decision about their case where the neutral is acting as an arbitrator.

The next question was about a situation where somebody had assisted an entity with developing its internal resolution guidelines or contractual terms to use to resolve disputes, and then also became the arbitrator or the mediator in a dispute which is affected by those guidelines.  The question was whether this would constitute a problem.

Dana Welch noted that such a situation raises fewer ethical issues as the person only designed the process, as opposed to being involved in a dispute, and that the person does not know confidential information about the dispute—he or she just comes in understanding the process. Welch says that courts have backed such arbitrators but the focus must be on extensive consents after disclosure.

* * *

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

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#CPRAM21 Video Now On YouTube

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 YouTube.

Click here for CPR’s YouTube channel.

The first video released features keynoters from #CPRAM21’s first two days:

  • CPR President and CEO Allen Waxman
  • CNN Anchor and Chief Political Correspondent Dana Bash
  • General James Mattis, Senior Counselor, The Cohen Group, former Secretary of Defense (2017-2018) and Commander, U.S. Central Command (2010-2013)

Highlights from Dana Bash’s presentation are on CPR Speaks here. Highlights from James Mattis’s talk are on CPR Speaks here.

Here is a direct link to the new YouTube video. Click the subscribe button for more CPR YouTube content.

Additional videos will be posted from #CPRAM21 for CPR members only. For information on access and joining CPR, please visit CPR’s Membership webpage here.

[END]

The Zoom in Arbitration: #CPRAM21 Practitioners Focus on Virtual ADR

By Claudia Diaz

Below are notes from the 2021 CPR Annual Meeting third-day panel, “Hot Topics In ADR And Year-End Wrap Up,” an hour-long Jan. 29 afternoon event.

  • Moderator Ana Reyes, a partner in Washington, D.C.’s Williams & Connolly, provided questions to three panels members, opening by noting that the effect of the pandemic on litigation and dispute resolution–including the adjustments the legal profession has taken, and which practices will be continuing–was the key hot topic that came up for the panel in preparing for the CPR Annual Meeting session.
  • Reyes’ first question for the panel was to comment on trends.  She said, “I have read that in this world of COVID that there are two recent trends in dispute resolution: more not less dispute resolution, and sooner not later.”  
  • Panelist Thomas J. Roberts, Chief Counsel, Litigation, Boeing Defense, Space & Security, in Arlington, Va., noted that he has seen a marginal increase toward more alternative dispute resolution. Initially there was hesitation to do mediation in a virtual setting, but he reported that his department has learned that virtual mediation works well. An in-house counsel, he said, should always think about resolution through mediation whenever a dispute arises. It is the best way to have a settlement conversation, he said, and the dispute will benefit from the guidance of a third-party neutral.
    • There are right and wrong reasons to mediate. Covid-19 has delayed dispute resolution, more so for courts than for arbitration. And he said you don’t want to mediate for the wrong reasons, focusing on entering and using the process solely because of the delays.
    • Still, with the delays, the windows for engaging in mediation are a little bit wider, which is lessening the hesitancy to mediate, giving people more time to consider it.
  • Question for Panelist Yvette Ostolaza, a Sidley Austin partner in the Dallas and Houston offices: Has the pandemic changed your clients’ desire to avoid a virtual hearing that they might not be able to delay? Are they trying to mediate where they would not before?
    • Ostolaza:
      • Virtual hearings are effective. Some clients said to wait, but the parties tried it “because there were bankruptcy issues.” After a securities class-action case mediation with 10 people, she said, “I found it way more effective to be by virtual and by a video than if I had been at an office.” So, efficiency was much better virtually than in person.
      • In virtual arbitration, there were differences in terms of the strengths of the party presentations, and more training is encouraged for participants.
      • There is something about video that makes it so obvious about who is not engaged. Participants need to behave as if they were in the courtroom. “We had one arbitrator that was clearly not paying attention and the client was pretty disappointed.”
      • “We need to remember this is a professional environment, . . . and not be too casual.”
      •  “I think there is a lot of cost-saving in the virtual world.”
  • Question on arbitrators pushing hearing forward virtually, even if that might not be best for the client.
    • Panelist J. Michael McNutt, senior litigation advisor and of counsel at the Paris law firm of Lazareff Le Bars:
      • ADR for his clients, who invest in multi-jurisdiction projects, virtual hearings adds a lot more complexity, said McNutt.
      • He said he has been working under new International Chamber of Commerce Court of Arbitration pandemic policies, which in certain circumstances pushes virtual hearings when the matter is not ready or too complex. For example, in one matter, among other logistical cross-border concerns, the parties needed translations for four languages. With due process considerations, the parties he is representing will proceed, but they will reserve their rights, noting also that there is a counterclaim.  “With international arbitration, it is a lot more complex.”
      • Moderator Reyes asked about cross-examination over video as opposed to in-person. McNutt replied, “It is very very difficult to have an effective cross examination because you can’t assume the other side is going to be honest or act properly.  You have to put another body in the room.” He says he is concerned about protecting the integrity of the proceeding.
  • Question: Are hearings different than mediations virtually?
    • Ostolaza:
      • “I wholeheartedly agree . . . that when it comes to depositions and . . . a hearing with live witnesses that you are cross examining it is very difficult.”
      • At a minimum, the attorney has a right to be with the client in person, and the other side should be socially distanced.    
      • Mediators can juggle multiple rooms better virtually than in person, knocking on doors and waiting.
  • Question to Tom Roberts of Boeing: What is one thing missing from the virtual mediation as opposed to the in-person mediation? Moderator Ana Reyes proposes that the key missing element is the mediator’s power to communicate with the individuals.  
    • Roberts:
      • “The best value that the mediator can bring” is to “credibly deliver the substance of . . . his or her view of the merits of the legal claims.”  He added, “that communicates pretty well virtually.”
      • On the downside, “there is a bit of easy-come, easy-go with virtual mediations.” No travel needed, just click in and click out, he said, concluding that it is easier now for parties to stop mediating.
      • A mediator that is committed to the process will have the people skills to stop today, but will catch up with the parties after—a mediator who wants to see it through.
    • Ostolaza:
      • She said her matters are starting earlier, with three or four calls before the actual mediation day, to go through the parameters and make the client feel comfortable so that the mediation will work.
      • For arbitration hearings, she advises practicing on exhibits and the process with the tribunal administrator
  • Question: Mediations don’t generally occur in international arbitrations—for example, the ICC does not require pre-mediations–perhaps because of a lack of availability of mediators that can work on the cross-cultural issues at play. Discuss these cultural factors.
    • J. Michael McNutt:
      • The reason the firm has offices in Dubai is for Chinese investors investing in Africa, who use arbitration in Abu Dhabi, in the United Arab Emirates, for those disputes.
      • The mentality and the civil law upon entering the contract is a fundamental issue when you have to interpret the contract in these international cases. In mediation it is difficult to find someone that “both parties would agree could accurately boil down” the essence of the dispute. He says that he cannot find qualified mediators– “Mediation is tough.”
      • For international mediation to become more relevant, it needs the ability to address these broad issues.
  • Question to Tom Roberts: Boeing is an international entity–Is that something Boeing has had to face, cross-cultural issues?
    • Roberts:
      • He agrees with McNutt, saying, “If you can find the right person then there is real value [to mediation].”
      • “The cultural differences, expectations, [and] legal understandings are very different in different parts of the world, so [finding the right person is] a big challenge.”
  • Question: Is there some loss in connecting in mediations virtually?
    • Ostolaza:
      • “There are differences in America” in negotiate style depending on the part of the country. “The art of being a great lawyer is understanding and embracing those differences and being good at it and being able to be a chameleon.”
      • She said she and her clients had discussions after virtual mediations by staying on the video for purposes of recapping client communications.
      • There can be a lack of buy-in without the travel and the commitment of an in-person mediation. But the counter is that it was “a little bit” friendlier not being in the same room with participants “hating” each other.  It counterbalanced.
  • Question: Often at the end of a mediation, noted Mediator Reyes, the mediator will ask parties to sign on to the terms of the mediation so the settlement will not unravel.  How have you addressed the technical request to sign on to the terms?
    • Ostolaza:
      • She had a term sheet at the outset for one pandemic mediation—she says she brings one to every mediation—and the parties were able to sign it two days after the conclusion of the session.
      • In another recent case, the mediation term sheet was signed with DocuSign—virtually–and no one left until it was done. That, she said, was the agreement about the deal going into the session, and it worked.
  • Question: Do you have a feeling that a couple years from now we will see a developing body of law about awards being enforced that were made in a virtual hearing?
    • McNutt:
      • If necessary, he says his firm will resist enforcement if it serves their clients.
      • He says he is a proponent of civil law issues, but in cross-border disputes, it is about the will of the parties and not the type of analysis of a common-law setting.
      • In a virtual hearing, he said, you do not know if the other lawyer is sitting across the table handing the answer to the witnesses. We have that problem even in in person hearings, said McNutt.
      • He said he looks forward to challenging the validity of awards where due process rights were abused, for example, in France, where process is fundamental to enforcement. Such challenges are “not good for arbitration,” he conceded, because finality of the award is the core reason clients turn to arbitration.
      • Tribunals need to render awards that can be enforced.
      • “The tribunal works for the parties, . . . and people need to hold tribunals accountable,” he said, for producing awards that can be enforced.
  • Question: A new issue developing, med-arb, in which you have a session with a single mediator and if a claim does not settle, then the mediator becomes the sole arbitrator, converting the matter to an arbitration from mediation. Comments?
    • Yvette Ostolaza:
      • She said she was not in a med-arb matter, but a client as part of the mediation agreed that if there is a dispute the neutral would arbitrate the mediation issues covered. She said she thought it would not work, because the mediator would think the entire time to protect himself. “I am not a fan,” she said, “Heck, I am not a fan of doing the federal magistrates’ [mediation] when they are mandatory and then going to the federal judge,” noting that she is skeptical that they will refrain from talking as the magistrate sheds the settlement role and the judge moves in to adjudicate.
    • Tom Roberts:
      • “I am generally down on the idea, but it also sort of depends on what the alternative is.” He agreed with Ostolaza’s concerns. It is impossible to not have the arbitrator contaminated by what they learned in the mediation process, said, adding he might be open to med-arb in a smaller case “where you really just want to get an answer.”
  • Moderator Reyes noted a 2021 CPR Annual Meeting chat comment advising that mediation is an old process with deep tribal roots that is common in most indigenous populations.
    • J. Michael McNutt:
      • “Mediation works when the community has already established who the mediator should be. That’s fundamentally different than a judge, of course.”
      • The skillset for arbitration: “We are hired to protect our clients and defend and win in the client’s interest. Prior to commencing arbitration there is a conversation of what is the client’s interests so that we know what they are and what to fight for.”
      • To mediate in arbitration is different, concluded McNutt, adding that the skillset is different.

* * *

The author, a third-year student at New York’s Benjamin N. Cardozo School of Law, is a CPR 2021 intern. Videos from #CPRAM21 will be posted soon at www.cpradr.org.

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House Reintroduces a Proposal to Restrict Arbitration at a ‘Justice Restored’ Hearing

By Mark Kantor

On Thursday, Feb. 11, the U.S. House of Representatives Judiciary Committee’s Subcommittee on Antitrust, Commercial and Administrative Law held a hearing, “Justice Restored: Ending Forced Arbitration and Protecting Fundamental Rights.” 

This hearing was held in connection with the same-day reintroduction of the “Forced Arbitration Injustice Repeal Act” or the “FAIR Act” (See press release here).  That proposed act, co-sponsored by 155 House Members, would ban mandatory pre-dispute arbitration agreements in cases of employment, consumer, antitrust and civil rights disputes. 

In the previous Congress, the FAIR Act passed the House by a 225-to-186 vote, with virtually all Democrats and a number of Republicans in support.  The U.S. Senate, however, then controlled by the Republicans, did not take up the legislation.  The FAIR Act thus died at the end of term in that Congress, to be revived as a proposal in the current Congress that convened last month.

The hearing was chaired by Rep. Hank Johnson, D., Ga., a leading FAIR Act sponsor.  Johnson strongly supported prohibiting such pre-dispute arbitration agreements.  In addition to employment, consumer, antitrust and civil rights disputes, Johnson also criticized the impact of mandatory arbitration on small business disputes with large businesses.

After Johnson’s opening statement, Ranking Minority Member Rep. Ken Buck, R., Colo., made his own opening remarks.  Buck opposed the FAIR Act’s general ban on pre-dispute arbitration clauses, arguing that arbitration is a fair system. 

It is very interesting to note that he did, however, offer support for reviewing coverage of sexual predation claims in arbitration and “doing away with the secrecy provisions in contracts” when workplace predatory conduct exists–“those are two issues I want to make sure we distinguish in the employment context.  . . .” 

Buck stated his particular interest in hearing the testimony from Gretchen Carlson, the former Fox News anchor who made public her story of sexual harassment and filed suit against her boss at Fox News.  Other Republican members raised the prospect of excluding “sex and race discrimination” from mandatory arbitration and for overriding class action waivers for a “pattern of behavior” by a “bad actor” rather than individual claims. 

That focus on employment discrimination/harassment claims and overriding related confidentiality provisions may signal a possible path for narrower bipartisan legislation.  A narrower approach may arise if, as many anticipate, the broader approach of the FAIR Act fails again in the Senate for lack of the 60 cloture votes necessary to overcome a filibuster or a Senate decision to eliminate the filibuster.  

Four witnesses testified at the hearing:

  • Gretchen Carlson, Journalist, Author, and Advocate
  • Myriam Gilles, Paul R. Verkuil Chair in Public Law, Benjamin N. Cardozo School of Law
  • G. Roger King, Senior Labor and Employment Counsel, The HR Policy Association
  • Jacob Weiss, Founder and President, OJ Commerce

Carlson spoke about the adverse impact of “forced arbitration” on her sexual harassment claims, as well as the barrier federal arbitration law poses to implementation of local State laws seeking to move similar claims out of arbitration.

Gilles spoke more broadly in opposition to mandatory arbitration in employment, consumer, antitrust, civil rights and small business/big business disputes, areas of her scholarship for many years. 

Weiss spoke in criticism of Amazon’s arbitration policy in contracts with its small business counterparties.  Notably, Weiss was discussing a category of B-to-B commercial claims where there is an imbalance of bargaining power, not claims involving individuals.

King testified in support of positive aspects of arbitration, the inclusion of due process rights for claimants based on procedures adopted by U.S. arbitral institutions, and reform of class action procedures.  Like Rep. Buck, he contended that concerns about confidentiality and nondisclosure agreements can be addressed separately from arbitration.

Readers should note that other legislation has also been introduced in the new Congress focusing among other matters on banning pre-dispute mandatory arbitration clauses in employment arrangements.  The most notable legislation in that respect is the proposed Protecting the Right to Organize Act.  Among as many as 50 pro-employee proposals in the PRO Act, it would prohibit employers from using mandatory arbitration agreements with employees.

Senate control has shifted to the Democrats in this Congress, even though by the narrowest of margins.  We can therefore anticipate hearings and committee activity in both the House and the Senate for these legislative proposals.  In each case, though, the fundamental political calculus in the U.S. Congress will be driven by the role of the Senate’s filibuster.

A video of the hearing, statements from House Members, witness written testimony and statements from interested parties can be found here.

* * *

Mark Kantor is a member of CPR-DR’s Panels of Distinguished Neutrals. Until he retired from Milbank, Tweed, Hadley & McCloy, he was a partner in the firm’s Corporate and Project Finance Groups. He currently serves as an arbitrator and mediator. He teaches as an Adjunct Professor at the Georgetown University Law Center (Recipient, Fahy Award for Outstanding Adjunct Professor). He also is Editor-in-Chief of the online journal Transnational Dispute Management. He has contributed frequently to CPR Speaks, and this post originally was circulated to a private list serv and adapted with the author’s permission.

* * *

For more from author Mark Kantor, join CPR’s Employment Disputes Committee and Government & ADR Task Force for a free public online panel discussion on Feb. 24 on labor and employment ADR under the Biden Administration. Kantor and other experts will discuss how the current composition of the Supreme Court, the new Democratic majority in Congress, and the new leadership of the NRLB and EEOC will affect arbitration and mediation of U.S. labor and employment disputes.  For a list of Kantor’s co-panelists and registration information, please visit the CPR website at https://bit.ly/3nV4fgf.

[END]

#CPRAM21: Inside Counsel Focus on Prioritizing Dispute Prevention Efforts–How? And How Much?

By Claudia Diaz

Here are notes from the 2021 CPR Annual Meeting second-day panel, “Expanding the Definition Of ADR: The Case for Conflict Prevention & Risk Management,” an hour-long Jan. 28 afternoon event.

Moderator:

Loren H. Brown

Partner, Global & U.S. Co-Chair, Litigation Practice, DLA Piper, New York

Panelists:

T. Reed Stephens

Partner, Winston & Strawn, Washington, D.C.

Laura Robertson

Deputy General Counsel, Litigation, Arbitration & IP, ConocoPhillips Co., Houston

Megan Westerberg

Assistant General Counsel, Eisai U.S., Woodcliff Lake, N.J.

The session opened with the panel members introducing themselves:

  • Laura Robertson manages worldwide disputes—litigation and international arbitration, as well as intellectual property matters, as deputy general counsel, and serves on CPR’s board.
  • Megan Westerberg works in risk management, among other duties, as assistant general counsel at her employer, a U.S. unit of a Japan-based pharmaceutical company.
  • Reed Stephens, a former U.S. Department of Justice prosecutor, focuses on pharmaceutical fraud and abuse, corporate compliance, and risk management.

  • Q [by Moderator Brown to Panelist Westerberg]: The role prevention takes in your in-house job?
  • A:
    • The company is in “a constant state of assessing risk benchmarking, trying to anticipate . . . what our regulators’ next move might be.”
    • A focus on robust training–constantly evolving our training.
    • Proactive monitoring–will spend resources and go out looking for processes.
    • Quarterly and monthly updates to risk assessment processes. 
    • Lawyers and business colleagues working together at all times, making efforts to assess and benchmark “anything . . . that is different, unique, novel, cutting edge.”
    • “Our goal is obviously taking smart risks.”
    • Private party conflicts–There can be internal “silos.” When the company starts to see tensions with another party, the company will assess who internally is working with the other party, and there is already a dialogue–looking for ways to de-escalate.
  • Q [to Robertson]: The role prevention takes in your company?  . . . Can you give insight into the culture of prevention in your company?
  • A [by Robertson]:
    • The legal department wants to foresee issues. Early evaluation and resolution saves money.
    • The legal department has a written litigation management mission statement focused on early resolution and early evaluation, and “feel[s] strongly” about multistep dispute resolution provisions.
    • We want to be consistent with business goals in the legal department–we want to help the business be successful.
    • A focus on trust building so we can resolve disputes early and quickly . . . before they become full-fledged litigation.
  • Q [to Stephens]: It’s probably harder to draw attention to prevention in large law firms.  Can you talk about risk management and prevention?
  • A:
    • “My perspective on this . . . is built around the idea that conflict avoidance really depends on active risk identification and active management.
    • “I am coming out on the back end” after the company has fallen into a situation, so the task is to “see how a problem really emerged.”
    • The challenge is how to persuade stakeholders to not get there in the first place.
    • Being able to explain to clients that they need an active risk management approach “can take some doing.”
    • Part of the job is to explain the value in doing this risk management—”to the extent it is proportionate to the risk” being taken.
    • The industry is important . . . different types of risk depending on what the enterprise focuses on.”
  • Q [to Robertson]: How do you measure successful prevention “in a world where everyone wants metrics” to prove outcomes and demonstrate performance. How do you measure this?
  • A:
    • Success is around the business clients feeling like the legal department helped prevent business interruptions.
    • In an example of a dispute with a foreign government, the company was able to resolve the dispute and make a framework for future disputes that clarified definitions.  “It actually improved the relationship.  . . . I use that as an example of success.”
    • It is “mak[ing] lemonade out of lemons.”
  • Q [to Westerberg]: How do you evaluate the value of the risk prevention work?
  • A:
    • We have a Japanese parent company and that has helped us . . . look to other cultures and to how they approach conflict.
    • A “proud parent moment”: “We spend a lot of time” counseling and asking why the leadership is not getting this, but “then you get struck by this a-ha moment,” and we see them explaining “the gray areas” and helping their teams navigate “with or without our help. [T]his is . . . a measure of success.”
    • If the legal department does not see that type of moment, “then it causes use to go back to the drawing board” and ask why the policy, guidance, or training was not getting through.
    • “We don’t want to be thought of as the police.  . . . We need to get to know the business . . . and let [the business executives] know you’re approachable.”  
    • The company is not “running metrics on those ‘proud parent moments’ but it sure makes us feel warm and fuzzy when they happen.”
  • Q: Prevention can be seen as different things, for example, de-escalation, or sometimes you work on contract provisions on exposure when a situation arises. You talked a little bit about risk assessment.  . . . How do you prioritize what you are going to spend your time on in terms of prevention? . . . Reed, from an outside counsel perspective, how do you think prioritization should work?
  • A [from Stephens]:
    • It’s “the idea of figuring out what’s the high value [of] catastrophe,” dollars or personal injury or reputation, “and then you back through your operational structure” to address it. It requires identifying where the employees “have the most discretion to make a decision” and focus on those potential bad outcomes with them.
    • Where outside counsel comes in is to help the enterprise align where the big risk is, with how the product or service is being delivered.
    • The effort is connecting real world problems with the consequences back to the process to identify where the highest risk, and the activities surrounding it that can lead to problems.
  • Q: I would be interested to hear about early case assessment and early resolution.
  • A [from Robertson]:
    • A tool we use for early evaluation is decision tree analysis, the “Treeage” software (see https://www.treeage.com/) that is designed for litigation and disputes. For large matters, the company brings in a consultant, but it also trains “all of” its lawyers and paralegals. The point is to “define the issue.”
    • At the end of that process, “we always come out of it with a better understanding of what is really at stake.”
  • Q [to Westerberg]: How do you approach early resolution in the pharmacy industry?
  • A:
    • “I’ve really been reflecting on the need . . . for the in-house lawyer to step back and get the team . . . in-house counsel, outside counsel, your insurance company, to pause, and in our case without the software . . . do that assessment. Where is this going . . .?”
    • “That is, I want to commit myself to [assessing] . . . the pros and cons of those options.”
  • A [from Stephens]:
    • A lot depends on your adversaries and if they are interested in early resolutions.
    • The government is more accustomed to a matter taking two or three years–“and they’re comfortable with that.”
    • “As outside counsel, being able to get the government to even entertain the thought of early resolution, without, essentially, handing over the keys to the kingdom is a challenge.”
    • Defining the problem is critical when discussing issues with the government.  “You’ve always got to be ahead of the government.”
    • “[T]he biggest challenge with dealing with government conflicts is really figuring out a pathway to get the government’s attention, [and] engage them to be willing to look at issues of exposure,” instead of allowing “months and months to go by.”
  • Q [by moderator Loren Brown]:  Regarding the pandemic, “I had no idea how much [the world] would also need lawyers, but when things are uncertain and dislocated this way, and our clients are responding to change, they need advice and counsel. . . .  How [has the] pandemic changed what you are doing . . . on your legal teams, in your practice and how that has affected prevention?”
  • A [from Robertson]:
    • “We may be too close to see really see [the long-term] impact.” But the biggest impact to how the company has managed disputes and dispute prevention and resolution in a virtual world is how much “we just skyrocketed . . . our use of Microsoft Teams and Zoom, and people have gotten so good at using virtual platform for meetings and hearings.” But how much will stay virtual?
    • This environment is challenging for negotiations. It is hard to do a negotiation with an adversary because it’s harder to develop rapport. “When we get out of this [it’s something] we won’t do—I think that’s something that’s been a real challenge for the last year.”
    • Not having courts open, “has had an interesting psychology impact on resolution.”
    • On the positive side, virtual work won’t disappear.  “There’s a lot of value” in virtual events like CPR’s Annual Meeting that can have hundreds of people all over the world “that we never could have done before.” And the cost savings from less business travel is significant.
  • Brown: Mediations have been going really well virtually.
  • A [from Westerberg]:
    • “Value transfers” with customers, healthcare providers, are “always scrutinized by the government.”
    • Has the company “been able to educate [its] providers over the past year” without having to provide entertainment and events associated with the sale of pharmaceuticals? And, if so, it may mean that the company and industry “has fundamentally shifted how we interact with customers.”
    • “Are we just going to pivot back to the old way? . . . [W]hat will the government think and say about that? We’ve proven we can educate through ways that are more nimble, less expensive.”

* * *

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

[END]

#CPRAM21 Day 2 Opener: Carlos Hernandez Presents Five Principles of Prevention

Former CPR Board Chairman
Carlos Hernandez

By Antranik Chekemian

Carlos M. Hernandez, recently retired Chief Executive Officer of Fluor, opened the second day of the CPR 2021 Annual Meeting to an online audience of about 180 conflict resolution professionals focusing on dispute prevention techniques.

Hernandez, a former CPR chairman and a current board member, reflected on how his perspective on dispute resolution has evolved throughout his professional career. He said, “As I matured as a lawyer, especially after going in-house, I began to understand that disputes often had implications well beyond, and more material,  than the immediate conflict.”

Coming out of law school, said Hernandez, “my career goal was to get the opportunity to try to win cases. I wanted to deliver favorable outcomes and of course I wasn’t too concerned about the business relationship between my client and their adversaries. . . . If I delivered a win, regardless of how I got there, within ethical bounds of course, the post-dispute relationship was not my concern.”

He said his experiences as a lawyer and then as CEO have led him to think of litigation as a last resort, ADR as a better alternative, and conflict prevention as best practice.

He reflected on the decade in the construction industry and how the industry players suffered staggering financial losses with bankruptcies and lost projects. This upheaval, said Hernandez, involved tremendous amounts of litigation, much of which might have been prevented. “And the cost and destruction of litigation itself has contributed to the demise of contractors and projects, and of course, the careers of many good people,” he said.

Hernandez outlined principles he found helpful in conflict prevention, noting that these principles are still frequently disregarded.

He first emphasized that “contracts need to be fair and capable of being executed by both parties. The ‘I win, you lose’ approach often results in both parties losing.” Hernandez noted, “Entering into a bad deal with the expectation that one will work things out, or solve disputes through negotiations, frequently results in solving the dispute through costly formal proceedings.” He also acknowledged the significant imbalance in market power, often resulting in bad contracts.

Second, Hernandez mentioned the importance of entering into contractual relationships with parties that will live by the terms of the contract–meaning that parties should not take contract terms as mere suggestions. “Have some degree of trust in the counterparty and respect the bargain. Seek partnership rather than an adversarial relationship with your counterparty in the performance of the contract,” said Hernandez.

Reflecting on the keynote address of Dana Bash, CNN’s chief political correspondent (see CPR Speaks post yesterday here), about the lack of personal relationships among Beltway politicians, and the resulting lack of conflict resolution in the federal legislature, he pointed out that this theme transcends institutional boundaries.

He recommended alignment sessions at the inception stage of business ventures as ways to discuss potential uncertainties. For example, one can establish communication channels even beyond the terms of the contract. These sessions, by building working relationships, have led to greater trust, better communications, and fewer disputes, said Hernandez.

Third, Hernandez encouraged lawyers to plan for good-faith disagreements and to negotiate contracts that contemplate that disagreements will arise, and that have prescribed means of addressing them in a prompt and business-like manner.

Conflict prevention provisions, he said, should be as standard in contracts as conflict resolution provisions. This may include having a third party providing nonbinding opinions such as a standing project neutral who has an ongoing relationship with the parties and knowledge about the project during its lifetime.

His fourth principle was about confronting potential disputes early. There is often a tendency to avoid addressing potential disputes early, he said , but typically, conflicts do not get better with time.


Arguments for resisting addressing an issue with a customer early on include that it would damage the relationship and that it would make continued execution of the contract more difficult, or that it would adversely affect the prospects for future contracts.

Hernandez, however, noted that one does not have to communicate in an adversarial or threatening way. “Disagree in a respectful way, don’t overstate your position, and leave the door open.  . . . I see it as an approach with the best interests of the client in mind,” he emphasized.

His final principle was that it is seldom too early or too late to engage a neutral third party for assistance, when the contracting parties are at odds. Hernandez concluded: “If all methods of conflict prevention have been exhausted without success, then mediation is a way to engage and settle discussions with third party neutrals that is worthy of pursuing.”

* * *

Carlos Hernandez is adapting and expanding his presentation for the March issue of Alternatives to the High Cost of Litigation, which will be available at the end of next month at www.altnewsletter.com. Follow CPR on Twitter @CPR_Institute and Alternatives @altnewsletter.

* * *

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

[END]

James Mattis’s #CPRAM21 Second-Day Keynote Focuses on Listening to Resolve Conflict

General Jim Mattis during his Zoom #CPRAM21 keynote on Jan. 28.

By Amy Foust

Thursday’s CPR 2021 Annual Meeting lunchtime keynote by James N. Mattis, a former U.S. Secretary of Defense for the first halt of President Trump’s term and a four-star general, reflected on conflict resolution and prevention for the business audience. 

Mattis began his comments by musing on the irony in inviting a war general to #CPRAM21, to speak to a group devoted to preventing conflicts, but went on to articulate a clear and concise plan for national reconciliation and healing.  He emphasized committing to local civics action, and relying on listening skills.

Mattis is currently a senior counselor at the Cohen Group, a Washington, D.C. consulting firm founded and headed by former U.S. Senator William Cohen, who preceded Mattis as defense secretary by 20 years.  Mattis was defense secretary from January 2017 to January 2019.

In his presentation, Mattis returned frequently to the theme of handing the world off to the next generation in the same or better condition than current leaders inherited it.  He noted that often means working closely with people with whom you disagree, people who may be inexperienced, ill-spirited, or just wrong. 

It also means admitting when predicted outcomes turn out differently. He said that people of opposing viewpoints need to work together to address issues, which usually starts with relatively small tasks where there is broad consensus on how to improve—he mentioned education and infrastructure–and then working up to bigger and more divisive issues. 

Mattis encouraged the audience to hold close people whose behavior offends, because, he said, “I’ve never seen it help when we cut people off in terms of them becoming more ethical in their performance.”

Invited by the moderator, CPR President & CEO Allen Waxman, to offer advice to a Zoom room of conflict resolution professionals predominated by lawyers, Mattis urged restraint from over-specific rules, which can lead to “brittle” situations and illogical outcomes.  He mentioned the importance of building trust before a crisis. 

Mattis recounted stories of watching great leaders build trust by listening to their counterparts, learning from them, and helping them.  He recounted General George Washington’s work with an untrained volunteer army that went on to defeat the world’s best army, and would go on to defeat Napoleon’s army just a few years later. 

General Mattis said Washington’s secret was “very boring”—

He would listen, and he would listen with a willingness to be persuaded.  He would actually change his views.  He listened to these guys from Delaware who went out on the water everyday and they kept in their own boat and now they’re in the army.  And the guy from South Carolina who couldn’t even understand those funny-talking people from Boston . . .

He’s learning from them, as he’s listening he’s willing to be persuaded.  He listens. He learns.  This is showing respect and when he does this, he helps them.  He helps them with the most . . . simple things at times like getting socks and warm coats and blankets. He does anything he can to help, and only then does he lead.

Citing was he said was the business community’s “more practiced effort” for defining and solving problems, Mattis called on the meeting attendees to apply their problem-solving skills to matters of public importance. Serve on school boards, he said, or the city council.  

“Run for office, if that’s your bent,” suggested Mattis, “but spend time giving back in the governance area—local, state, federal—because we need what business is bringing right now.” 

Answering his own question as to why local action is important, General Mattis concluded, “The country’s worth it.”

* * *

The author is an LLM candidate studying dispute resolution at the Straus Institute, Caruso School of Law at Malibu, Calif.’s Pepperdine University, and an intern with the CPR Institute through Spring 2021. #CPRAM21 continues on Friday, Jan. 29; registration is free at www.cpradr.org.

[END]

#CPRAM21 Keynote: CNN’s Dana Bash on Negotiations, Conflict Resolution, and Truth Telling

CNN Anchor/Correspondent/Analyst Dana Bash kicking off CPR’s 2021 Annual Meeting

By Russ Bleemer

The International Institute for Conflict Prevention and Resolution opened its 2021 Annual Meeting Wednesday afternoon with remarks from CNN’s chief political correspondent, Dana Bash.

Bash, a three-decade veteran at the news network, brought an inside-the-Beltway view and application of negotiation and conflict resolution techniques to an online audience of about 250 conflict resolution professionals from corporations, law firms, academia and government.

[CPR’s Annual Meeting has two full days of program on Thursday, Jan. 28, and Friday, Jan. 29.  Registration for the first online event is free and open to the public.  See www.cprmeeting.org for the agenda and sign-up.]

Bash described a Capitol Hill where dispute resolution skills seem to be less valued—if not disappearing altogether.  “When I first began walking the halls of Congress, it was so different in terms of negotiation and deal making, in terms of conflict resolution,” she said at the outset, “It was different in that–name your topic, immigration, . . . Medicare reform . . . annual budget negotiations–there were always conflicts and partisan battles. But there were also meetings.  There were also discussions.”

Bash said that she and her colleagues “used to find rooms where [Capitol Hill legislators] were negotiating across party lines,” and wait out the talks to report the results. 

“The expectation was that there would be a deal,” she said.  “They didn’t know what, but the expectation was that there would be some deal.”

Things began to change, she said, well before the Trump Administration:  fewer meetings, fewer negotiations, with compromise happening less and less, often focused on “low-hanging fruit” like agriculture and defense bills that have many common constituent interests.

Senators and House members, explained Bash, simply weren’t talking like they once did.  They weren’t as likely to sit down with one another, she said, and weren’t as likely to have common ground to foster negotiations and address policy conflicts.

Bash offered the meeting attendees several reasons that she said she believes have contributed to the decline in negotiations and the increased impasses in producing federal legislation.

First, she said that lawmakers stopped moving their families to Washington.  She said it has origins in political calculation, with many lawmakers attacked because they lost touch with their districts.  “A fair criticism in a lot of states,” said Bash.

Unfortunately, she reported, the effect has now become extreme, with members going home weekends “understandably to see their family and not scheduling votes until Monday night or Tuesday.” That doesn’t leave much time to negotiate across party lines, said Bash, and the Senate and House members “don’t communicate the way they used to.”

A second reason for the decline, said Bash, is money. First is the obvious fundraising that is required to mount a House or Senate campaign.  Instead of taking time to have dinner or a cocktail with someone across the aisle, she said, candidates are “racing out of the building to go to a fundraiser” or to their party headquarters to dial for dollars. 

There’s more.  Bash attributed her analysis of the second part of the money factor to “a senior person in the Trump campaign,” who she said pointed out to her the significance of the candidates’ emphasis on the work involved in recruiting small-dollar donors, due to caps on individual donations.

“It connects to grass roots,” said Bash, explaining further, “It’s a talking point.  It’s a great form of democracy.” But the incentives of the appeal often means pitching to “the extremes of the party,” she said. 

That, Bash concluded, contributes to a gulf that has widened between the parties and contributed to the decline in negotiation efforts.

In addition, gerrymandering has gotten “so much worse,” she said, and with members worried about being primaried by a member of their own party, let alone the opposition, they aren’t looking to middle ground.

And a fourth factor, she said, is the Internet and social media.

President Biden, explained Bash, advocated in the 2020 campaign for a return to the form of face-to-face negotiation that characterized much of his political career.

“Can he recapture that?” Bash asked. She said the first test will be on the coronavirus stimulus bill. His initial $1.9 trillion proposal, she said, is a “pie in the sky” first move that the president clearly hopes will spark talks.

Countering the above trends, and an “anecdote to give hope,” Bash noted that the Senate women pre-pandemic had met monthly for an off-the-record, no-staff dinner, which helped break common ground.  She suggested that she expects that and similar efforts to return in the new Congress once it’s safe for such events.

She also cited the weekly prayer breakfast attended by members of the Senate as way for them to get to know one another and increase communications.

The biggest problem in resolving conflicts, Bash indicated, is the beliefs by many citizens in untruths.

“I don’t know what the answer is,” she lamented, adding, “People right now are not coming from the same set of facts.  It is so hard to bridge a very deep divide when you don’t agree on the same set of facts.”

She pointed to competitor Fox News, and conservative media. Conservative senators, she said, are “in a tough spot.”  She said, “It’s very hard to reason with people who believe a lie and don’t believe in a set of facts,” referring to debunked claims of election fraud.

As to her own role, said Bash, “all we can do . . . in the media is point out things that aren’t true.”

Bash concluded her nearly 45-program with interview questions from host Allen Waxman, CPR’s president and chief executive officer, and from Zoom audience members.

During the Q-and-A, Bash said that the media’s role since she started at CNN in the 1990s had changed considerably, and returned to the problem of reporting facts today. “The truth is more important than ever and you can’t just rely on the traditional journalistic formula of ‘Republican John Doe says X’ and ‘Democrat Jane Doe says Y.’  . . . You can’t do [that] when Jane Doe, [a] member of Congress, isn’t telling the truth.  So we just have to stand up for truth in a way we never did.”

Bash went further: “The first time I had to come out and say, ‘What you just heard from the president of the United States is not true,’ I felt like I was going to throw up.  . . . Then it happened over and over.  The deeper it got, the more of a responsibility, we all felt.”

She said with a sigh, “I will not take our role in democracy for granted, ever.”

After discussing the Jan. 6 attack on the Capitol and the inauguration in response to questions, Waxman and an audience member combined to ask what the dispute resolution community could do.

First, Bash said that she didn’t think there would be any fundamental changes in the political system such as a new party.

The ADR community can best act at the local level, Bash suggested. She urged attendees to talk to their neighbors and apply their skills to develop understanding.  She conceded that she wasn’t sure how to fully address misinformation, “the echo chamber, and [the focus on] only information that addresses . . . preconceived notions.”

But Bash concluded that the news business—and by extension, the ADR community—has to address what is in front of it.  “We have to rightly get back to the human element of things around us,” she said.

* * *

The author edits Alternatives to the High Cost of Litigation.

[END]

Love’s New Mediation Data: Whither the Joint Session?

By Temitope Akande

New York Law School’s Alternative Dispute Resolution Skills Program kicked off its first 2021 round of biweekly Wednesday lunch conversations yesterday featuring mediator Lela Porter Love, a law professor and director of the Kukin Program for Conflict Resolution at New York’s Benjamin N. Cardozo School of Law.

Love opened by emphatically noting that dialogue is currently dying or impoverished, even on the political scene. Mediation, she said, “is the last bastion,” with mediators trained to promote dialogue. But even in mediation, there is “less and less mandate for mediators to bring parties together into joint sessions.”

Her discussion was mostly based on a 2019 survey of practicing mediators in a professional group, the International Academy of Mediators, to determine the use of joint and caucus sessions. Presenting a PowerPoint, “The Disappearing Joint Session,” based on 129 responses and anecdotal discussions, Love said that the data reflects the title: There is a lessening frequency of the use of joint sessions and more reliance on mediators conducting caucuses with individual parties.

Prof. Love moved to a 2017 survey by the American Bar Association Dispute Resolution Section Task Force on the Relation of Mediator Actions to Mediation Outcomes also on the use of caucus during mediation. The results, she said, were counterintuitive: caucusing had an increased settlement effect in labor-management disputes, but no effect, according to her presentation slide, “in other types of disputes regardless of [the] purpose of caucus (i.e., whether to establish trust or discuss settlement proposals).”

She said that the use of caucus has shown that parties are more likely to file an enforcement action based on their settlement—which indicates that increased caucusing didn’t reduce acrimony. As a result, caucus sessions, while they may increase labor-management case settlement, may have potential for negative effects on the parties’ perceptions and relationships.

Love discussed the caucusing results in a broad Maryland state judiciary ADR evaluation report. Based on the evaluation of caucus sessions, the greater the percentage of time participants spent in caucus, the less likely the parties were satisfied with the outcome, and the less likely the participants report that the issues “were resolved with a fair and implementable outcome.”

“On balance,” said Love, “you don’t see this real, ‘Wow, now I understand why there is this great move to caucusing.’”

The Maryland study showed that when the mediators controlled the sessions, limiting the issues instead of presenting a broad range, parties showed an increase in a desire to better understand the other party. The long-term aftereffects results show that the greater percentage of time participants spent in caucus, the more likely participants will return to court for an enforcement action after mediation, reflecting a lack of durability of those mediation results.

Love further discussed the values that influence mediation style and reasons why mediators use caucus sessions instead of joint sessions, returning to the IAM study. First, mediators who do not use joint sessions primarily do not do so because attorneys do not want joint sessions.

The second reason they lean toward caucus and away from joint sessions is that parties tend to decline joint sessions because they feel more comfortable participating in the mediation process by sharing their stories in caucus sessions with the mediator, rather than facing their adversary. “People in conflict are really angry at each other and they don’t want to see each other,” explained Love.

Love further noted that mediators were mostly trained to use joint sessions, though different schools of mediation also favored caucuses. A more important factor in constructing and conducting mediation sessions is that a significant purpose is to get people together to heal relationships—as opposed to the “war” of adjudication–which orients toward using joint sessions.

Prof. Love concluded by stressing that listening helps settle cases, and it is important in helping people tell their stories. The mediators who seek to identify the parties’ interests perhaps are doing only one aspect of the process, noted NYLS ADR Skills Program Director and moderator F. Peter Phillips, who added that mediation might be better handled if the emphasis was on all parties listening and working to understand one another. Love concurred, and, noting that mediators are witnesses to the participants’ stories, suggested that neutrals provide “respectful-person listening” that enhances the process.

Love’s Jan. 13 NYLS Conversations in Conflict Resolution session is available on YouTube at https://bit.ly/3nOluyK.

* * *

The author, who received a Master of Laws in Alternative Dispute Resolution last May at the University of Southern California Gould School of Law in Los Angeles, is volunteering with the CPR Institute through Spring 2021.

[END]

CPR Files Amicus Brief Asking U.S. Supreme Court to Tackle Foreign Discovery for Arbitration

The International Institute for Conflict Prevention and Resolution has filed an amicus brief requesting that the U.S. Supreme Court grant certiorari to resolve a federal circuit court split on whether 28 U.S.C. § 1782 allows federal district courts to order discovery for private commercial arbitration abroad.

CPR did not take a position on the merits of the case.

Yesterday’s filing in Servotronics Inc. v. Rolls-Royce PLC, et al., No. 20-794, highlights the circuit split underlying the case.  Petitioner Servotronics presents the question,

Whether the discretion granted to district courts in 28 U.S.C. § 1782(a) to render assistance in gathering evidence for use in “a foreign or international tribunal” encompasses private commercial arbitral tribunals, as the U.S. Courts of Appeals for the 4th and 6th Circuits have held, or excludes such tribunals without expressing an exclusionary intent, as the U.S. Courts of Appeals for the 2nd, 5th and, in the case below, the 7th Circuit, have held.

CPR urged the Court to resolve this circuit court split, noting in the brief that “the question of whether United States district courts may entertain applications for judicial assistance in obtaining evidence for presentation in arbitral proceedings before international tribunals is one of great relevance to CPR and its constituents.”

The friend-of-the-Court brief states that the “current existence of opposite rules on whether district courts have jurisdiction to render assistance under Section 1782 in gathering evidence for international arbitral tribunals creates both the opportunity for blatant forum shopping and the likelihood of protracted litigation on the threshold jurisdictional question in each of the seven remaining regional circuits that have not decided the question.”

CPR also argues that the court should set the case for argument this term to avoid the likelihood that it will become moot prior to decision.

Section 1782 authorizes “any interested person” in a proceeding before a “foreign or international tribunal” to ask for and receive discovery from a person in the United States.  But the conflicting federal circuit cases differ on whether the statute’s definition of tribunals would cover arbitration matters. The Servotronics parties have decisions going both ways, one in the Fourth Circuit, and the second, the subject of the cert petition, in the Seventh Circuit.

CPR has created a web page for the brief at http://bit.ly/3nklaYp.

CPR Speaks has addressed the issues in this case as they arose.  John Pinney, counsel to Graydon in Cincinnati who prepared the amicus filing on CPR’s behalf, discusses the case in a video post here.  Updates on the circuit split as it developed in 2020’s second half are available here and here.

You can find the CPR amicus filing, as well as other filings in the case, on the Supreme Docket page, here. Law360 covered the filing here, available with a subscription.

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