Lincoln & ADR: Pepperdine’s Stipanowich Discusses Evolution in Arbitration

By Alice Albl

The second series of New York Law School’s Conversations in Conflict drew to a close Sept. 23 with an interview featuring Pepperdine University Caruso School of Law Prof. Thomas J. Stipanowich.

The discussion centered around the progress of arbitration since the release of Stipanowich’s five-volume treatise on federal arbitration law in the 1990s; his expansive view included advancing the practice with lessons taken from the life of Abraham Lincoln.

Stipanowich’s theories focused on a tension between familiarity and efficiency. In drawing from what they know as lawyers, neutrals in arbitration may bind the process too closely to the establishment of litigation, he explained.

While neutrals may believe that apparently tried-and-true procedures inspired by litigation form the best avenues to successful dispute resolution, this mindset hinders the use of more creative, and potentially more effective, methods.

Instead, Stipanowich invited neutrals to follow in the footsteps of President Lincoln, whom he considered to be a “super functional” arbitrator. Like Lincoln, modern ADR community members should seek to work for the parties’ interests and not a nominal win.

But when Stipanowich began studying arbitration in the 1980s, neutrals weren’t the focus. Back then, arbitration suffered from a lack of procedural structure, most notably missing protocols for discovery and case management, he said.

In the ensuing years arbitrators filled these gaps. Stipanowich described this as the “legalization” of ADR, a process by which neutrals appropriated features from the practice of law into their work.

While legal processes may be effective in arbitration, their familiarity causes them to monopolize the roles they serve. Stipanowich cited examples in both the United States and abroad to demonstrate that the dominant legal processes are not necessarily the best.

Domestically, Stipanowich discussed the double-blind arbitration process used in contracts by the Writers’ Guild of America. Under this process, the disputants’ and arbitrators’ identities are not known to each other. This has the practical purpose of preventing conflict in the industry beyond the dispute, but it may also prove for a more equitable resolution beyond the reach of “legalized” ADR.

Abroad, Stipanowich, who is former president and chief executive officer of the CPR Institute, which publishes this blog, looked to the “multi-lane” duties neutrals performed in other cultures, such as the way German arbitrators help craft settlements or Chinese arbitrators often double as mediators.

U.S. arbitrators seem to be gradually warming to the idea of building multi-lane brands, something that Stipanowich encourages. He praised those who use a variety of roles and techniques to find the true conflict in disputes.

Stipanowich emphasized that finding the true conflict as early as possible will allow a neutral to spend more time balancing resolution with the interests and relationships among parties. After 40 years of study, he has found that this balance is key to success in ADR.

For Stipanowich, few could exemplify care for interests and relationships more than Abraham Lincoln. He closed the session by emphasizing the icon’s willingness to look beyond wins and vengeance during the Civil War, instead focusing on a goal of rights and equity. To see beyond the fray toward a fair resolution, Stipanowich says, is what ADR is about.

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Recordings of NYLS’s Conversations in Conflict Resolution series are being posted at the school’s Alternative Dispute Resolution Skills Program at https://bit.ly/32A3aAP.  

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

[END]

How Litigants View the ADR Options in Courts

By Alice Albl

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

‘VUCA’ in the EU and Beyond: Highlights from a CPR European Conference Session

By Joseph Famulari

Volatility, uncertainty, complexity, and ambiguity.

When reading these words, one may assume they mean to describe 2020’s chaotic nature. But while this may be partly true, the acronym serves as an example for how leaders across the commercial spectrum, including in the ADR community, look to reflect, learn and adapt to the circumstances living in a “VUCA” world entail.

The overall theme of this year’s CPR European Conference on Business Dispute Management, held online, was present during “Evaluating and learning from disputes in a VUCA world,” a seminar that took place on the conference’s first day, Sept. 15.

Moderated by Noradèle Radjai, a partner in the international arbitration team at the Swiss Law firm Lalive, the panel explored how unpredictable conflict requires agile thinking, adaptability, and a growth mindset. Panelists answered vital questions such as “How do companies learn?” “What is the role of firms and in-house counsel in promoting learning?” and “How does one grow a learning mindset among dispute specialists?”

Laura Abrahamson, former Senior Vice President, Deputy General Counsel, and Head of Litigation for AECOM, an engineering and infrastructure company based in Los Angeles, led the panelists to emphasize “presentness” to counter the world’s hectic nature–that is, problem-solving strategies should be implemented in real-time, to get ahead of issues that may arise, rather than tackling issues far after the fact.

She stressed that corporations must have the vision to align stakeholders against a common goal, to counter volatility and display agility to adapt and counter ambiguity. By scaling back in real-time problems present in disputes, companies can achieve adapt by adopting practices of collaboration, and reflecting and measuring the outcome against agreed-to metrics.

Abrahamson emphasized that organizational learning must take place to learn from disputes and speed best practice adoption. Using slides, Abrahamson highlighted that organizational learning should be a critical role of inside and outside counsel to speed best practices adoption; by developing a root-cause analysis capability, counsel can convert findings to actionable improvements.

Also, organizational learning involves developing a post-mortem after disputes to establish and communicate lessons learned. Once these learnings are channeled to continuing or new projects, the root-cause analysis can promote corrective action to the prior failures, build upon the successes, and speed best practices adoption for the company.

Next, Mallory B. Silberman, a partner at Arnold & Porter in Washington, D.C., led with an explanation of how the VUCA world is present all around us–including her dogs waiting anxiously for her just outside the confines of the virtual panel. Silberman explained that the solution to VUCA—again volatility, uncertainty, complexity, and ambiguity–is a different VUCA: Vision, Understanding, Clarity, and Agility, with an emphasis on understanding.

Through this, Silberman expanded on how teaching is complex, and detailed how this complexity comes into play through education roles’ fluidity and how the role between teachers and students often becomes interchangeable.

She explained three types of students in her experience: The first type is actual students, the ones she teaches in the classroom, developing practical skills in advocacy. Next are clients that are advised on practical and procedural issues, how to conduct virtual hearings, and who counsel details on how to bring fair and equitable treatment to investors. The third category is colleagues and peers–meaning that everyone can learn from everyone’s experiences, through teaching colleagues within the firm and organizing hearing simulations, and a platform for improved empathy and more precise expectations develops.  The student/teacher relationship is essential to maintaining and streamlining information.

Focusing on these relationships adequately and improving methods of conveying and receiving new information is vital to a firm’s success in an ever-increasing VUCA world.

Silberman highlighted the receptivity of the student categories, and expanded on the point by stating, “Will this benefit them somehow?” She concluded by saying, “If you follow up with a quick check-in after a filing/hearing, it is more likely to promote learning going forward.”

Finally, Reza Mohtashami, a London partner at the Three Crowns LLP law firm, addressed how dispute specialists embrace a learning mindset. “Every dispute arises in a volatile, complex set of parameters,” he said.

In Mohtashami’s eyes, every day operates in a VUCA world. To highlight this, he went on to discuss the most cataclysmic events in the Middle East and MENA (Middle East, North Africa)  region:

  • The events of the Arab Spring, which were not widely predicted and understood at the time;
  • The nuclear accord entered into by the U.S. and other nations with Iran, and the Trump administration’s rollback of the deal, with foreign investors realizing the possibility of reimplementation and maintaining their own levels of protection, and
  • The Qatar blockade, highlighting the capacity of the Qatar government to retool its economy in the face of isolation by four big regional powers.

He discussed how dispute lawyers are adapting their practices always under scrutiny; with the contentious process making dispute lawyers more nimble than transactional lawyers. In highlighting these instances, Mohtashami painted a picture of how events such as these can foster a learning mindset among dispute specialists.  In tune with the prior speakers, an emphasis on quick-thinking, self-preservation, and adaptability are key. Though about the Qatar blockade, he says another lesson learned is, “if the country affected has deep pockets and is able to cushion the blow from an embargo on its economy, it will always be ready.”

Noradèle Radjai asked, “Do we first have to unlearn some practices” to succeed in a VUCA world? Mohtashami answered, “To some extent, yes, experienced arbitrators have a set way of conducting their arbitrations. But on the whole, people learn to adapt with best practices because it’s a competitive practice, and if you don’t do that, you get left behind.”

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The author, a CPR Institute Fall 2020 intern, is a second-year student at Brooklyn Law School in New York. CPR Institute Fall 2020 intern Cristina Carvajal, a student at the City University of New York School of Law, assisted with the research and writing of this article.

[END]

Dispositive Motions in Arbitration: Authority, Rules and Practical Tips

head shot 1By Janice L. Sperow

As companies, parties, and their lawyers across the nation debate whether they may, or even should, resolve their disputes in court or arbitration, courts and arbitrators—both faced with pandemic-generated, unprecedented backlogs—seem more willing to entertain docket clearing motions.

For some practitioners, dispositive motion practice in arbitration presents a new challenge. Yet, dispositive motions have existed in arbitration almost as long as arbitration itself. Now, however, both parties have embraced them. Recently, arbitrators have witnessed an increase in requests for leave to file them as parties dealing with the economic fallout of the pandemic attempt to resolve disputes sooner, more efficiently, and more cost-effectively. As more practitioners turn to arbitration to resolve disputes, they increasingly look to dispositive motion practice to promptly adjudicate them.

Still, some arbitrators have questioned their authority to entertain dispositive motions. Others hesitate to dispose of the arbitration before it really starts when it may well be the claimant’s only course of redress. Still others, like the author, view dispositive motions as a potential opportunity to narrow and resolve issues fairly and efficiently for both parties. So where do arbitrators obtain the power to consider dispositive motions?

The Parties’ Contract

Like the arbitration itself, the authority often starts with the parties’ contract. The arbitrator can and will allow dispositive motions if the parties’ arbitration clause provides for them. Many litigants now specifically provide in their arbitration agreements that the arbitrator shall have the authority to resolve jurisdiction, arbitrability, and many other threshold or dispositive issues. Indeed, astute drafters will frame their arbitration clauses to include the right to bring a dispositive or threshold motion to avoid the arbitrator’s exercise of discretion. Arbitrators will typically enforce such clauses if both parties may reciprocally invoke them.

Practical Tip: Explicitly provide the arbitrator with the authority to entertain dispositive and threshold motions directly into the parties’ arbitration agreement rather than incorporating them indirectly by reference to court rules, civil procedure rules, or forum administration rules. Court, civil procedure, and forum rules might include other provisions, which the parties may consider less desirable and which they may not want to incorporate wholesale into their agreement. The parties should also determine if they want to have the automatic right to bring such motions or merely grant the arbitrator the authority to entertain them at her discretion or upon a specified showing. If the parties intend to provide contractually for the application of a specific arbitral forum’s rules, review that forum’s dispositive motion rule and determine if the parties wish to modify it in the contract. Most arbitral fora expressly allow the parties to modify in writing the application of any rule. Finally, provide for reciprocity to enhance the clause’s enforceability.

Post-Dispute Agreement

If the contract itself does not mention the authority to hear dispositive motions, the parties may always agree to them in a written stipulation or even orally after the dispute has arisen or after the arbitration has begun. Contentious litigants may yet find common ground and agree to resolution of a threshold issue upfront if it will save time and expense. They will also routinely agree post-dispute to motions to resolve choice of law, jurisdiction, contract formation, forum rule applicability, and other threshold issues which will govern the rest of the case moving forward.

Practical Tip: Reduce the post-dispute agreement to writing whether by stipulation or in the arbitrator’s order. Identify the specific scope of the agreement including the precise issues to be determined by motion, page limits, and a briefing schedule. Decide if, pending the motion’s resolution, discovery should be stayed, continued, or restricted to information necessary to adjudicate the motion. Agree upon an early deadline for the resolution of the motion to maximize its cost savings and efficiency. Also set a cutoff date by which all dispositive or threshold issues must be brought. Early resolution saves the most time and expense; a dispositive motion brought on the eve of arbitration merely disrupts the process and often adds to, rather than minimizes, the costs of arbitration. Finally, proffer a dispositive motion agreement in writing to opposing counsel even if he will not likely agree; then track the fees spent on that issue at hearing and seek to recover them if the arbitrator rules in your favor on that point. Even if your side loses on the ultimate merits of a claim, the arbitrator may offset the prevailing party’s fee award if the other side incurred unnecessary fees on an issue, which could have been summarily adjudicated.

The Arbitral Forum’s Rules

The arbitration rules applicable to the dispute will usually permit dispositive motion practice. For example, in 2011, the pioneering  International Institute for Conflict Prevention & Resolution (CPR) specifically allowed for dispositive motion practice in the arbitral forum when it issued its 2011 Guidelines. In 2013, the American Arbitration Association also championed the arbitrator’s authority to entertain dispositive motions when it amended its rules to explicitly permit the filing of dispositive motions. Likewise, CPR’s first edition of Administered Rules promulgated in 2013 expressly authorized dispositive motions. Now, most arbitration associations include a dispositive motion rule. For example, JAMS’ Comprehensive Rule 18 explicitly authorizes them. Only the Financial Industry Neutral Regulatory Authority (FINRA), which involves primarily customer complaints, generally prohibits them; but even FINRA allows them under a few exceptions. We will explore the AAA and CPR rules in more depth because they provide parties with the most specific and comprehensive guidance.

The AAA Dispositive Motion Rules

Notably, the AAA did not adopt a uniform dispositive motion rule. Instead, it wisely chose to tailor its rules to the type of arbitration. The AAA Commercial Rule 33 now provides: “[t]he arbitrator may allow the filing of and make rulings upon a dispositive motion only if the arbitrator determines that the moving party has shown that the motion is likely to succeed and dispose of or narrow the issues in the case.” Likewise, the AAA Consumer Rule 33 and Employment Rule 27 state: “[t]he arbitrator may allow the filing of a dispositive motion if the arbitrator determines that the moving party has shown substantial cause that the motion is likely to succeed and dispose of or narrow the issues in the case.” The AAA Construction Rule 34 provides: “[u]pon prior written application, the arbitrator may permit motions that dispose of all or part of a claim or narrow the issues in a case.”

Interestingly, the dispositive motion rule applicable to consumer and employment cases, which involve individuals arbitrating against companies, require a higher initial showing than the dispositive motion rule applicable to commercial cases, which involve two companies arbitrating against each other. The consumer and employment rules require the moving party to show “substantial cause” that the motion is likely to succeed while the commercial rule only requires the moving party to show that the motion is likely to succeed. “Substantial cause” suggests more ample, considerable, or abundant cause whereas “likely to succeed” evokes mere feasibility and reasonableness – a fair chance rather than a good chance.

Conversely, the construction rule does not require proof of a likelihood of success but merely a written application showing that the motion will “dispose of all or part of a claim or narrow the issues in a case.” Of course, the written application itself will be more persuasive if it demonstrates the motion’s likely success. Unlike the construction rule, the AAA employment, commercial, and consumer dispositive motion rules do not technically require a written application. However, most arbitrators require them, nonetheless. At a minimum, arbitrators will expect an email requesting leave, not just an oral request.

While the specific rules differ in some key respects, they also share some important commonalities. For example, all the AAA dispositive motion rules – and indeed many if not most arbitral fora rules – allow dispositive motion practice only at the arbitrator’s discretion. AAA Commercial Rule 33, Consumer Rule 33, and Employment Rule 27 (“arbitrator may allow”); Construction Rule 34 (“arbitrator may permit”). Unlike civil litigation, arbitration does not include an automatic right to file a dispositive motion. Parties must request leave to file a motion, which the arbitrator may grant or deny within her discretion.

The three rules all also require the moving party to make some initial showing to convince the arbitrator why she should exercise her discretion to permit the dispositive motion. AAA Commercial Rule 33 (“only if the arbitrator determines that the moving party has shown”); AAA Consumer Rule 33 and Employment Rule 27 (“if the arbitrator determines that the moving party has shown substantial cause”); AAA Construction Rule 34 (“upon prior written application”).

All three also require the moving party to show that the motion will “dispose of or narrow the issues in the case.” Hence, in addition to the required degree of success, the moving party must demonstrate that the motion, if granted, will eliminate an issue, or at least narrow the scope of the hearing. Basically, the AAA’s rules all require two different types of proof: merit and efficiency – some likelihood of success and some cost savings over a hearing on the issue or claim.

But the AAA’s rules all require only either disposition or narrowing of the issues, not both. Accordingly, if the motion will achieve some economies of scale, the arbitrator can and should properly entertain the motion even if it does not completely dispose of an issue.

Practical Tip: Practitioners who wish to use the rules to narrow, rather than dispose of, issues should still present adequate proof of efficiency. For example, the moving party may want to demonstrate that early resolution of the issue may eliminate the need for expert or other witnesses who would not otherwise testify, may reduce the number of exhibits, may limit the necessary scope of discovery, or may reduce hearing time in some other way or even encourage settlement. 

Arguably, the rules do not require the complete disposition of a claim. For example, Construction Rule 34 explicitly provides that the motion may dispose of all “or part” of a claim. While the AAA’s Commercial, Employment, and Consumer Rules do not contain the same express language, they likely also permit partial disposition of a claim because they all permit the motion if it would narrow an issue and an arbitrator will likely find that partial resolution of a claim will indeed narrow the issues in the case.

Practical Tip: As noted, the parties can choose to include the right to file motions in their arbitration clause or post-dispute agreement rather than leave it to the arbitrator’s discretion. They can also set the applicable standard that they want to govern the grant or denial of the motion if they do so in writing. If the rules apply as written, consider a two-step proffer to save costs: during the first step, the moving party shows the rule’s satisfaction in a short letter or email without a response from the opposing party during which time the case and discovery proceed; then, in the second step, if the arbitrator finds that the moving party has satisfied the applicable standard, the parties set a full briefing schedule and suspend all or some discovery pending the motion’s resolution. In whatever manner litigants decide to tackle dispositive motion practice in arbitration, plan ahead and raise the issue early in the initial case management conference to allow sufficient time to schedule the motion(s) well before the hearing date in order to maximize cost savings for all parties. Consider the desirability of two different deadlines: an early one for purely legal or threshold questions and a later one at the close of discovery, if appropriate, for remaining disputes.

CPR’s Dispositive Motion Rule

In 2013, ADR industry leader CPR also issued its rules to expressly provide for dispositive motion practice. Under Rule 12.6, a party may apply to file “a motion for early disposition of issues, including claims, counterclaims, defenses, and other legal and factual questions.” CPR 2019 Administered Arbitration Rules, Rule 12.6(a). Rule 12.6 then instructs the applicant to include the issues to be resolved, the basis for the motion, the relief requested, how early disposition would “advance efficient resolution of the overall dispute” and a proposed procedure for resolving the issues. Rule 12.6(b).

CPR’s standard for the granting of the application differs slightly from the AAA’s Rules. CPR requires the arbitrator to find “a reasonable likelihood that hearing the motion for early disposition may result in increased efficiency in resolving the overall dispute while not unduly delaying the rendering of a final award.” Rule 12.6(c). If the arbitrator finds the motion “appropriate,” she will then establish the governing procedure, which may involve “written submissions, witness testimony by affidavit or other written form, limited hearings, or in any other manner.” Rule 12.6(d).

While the CPR and AAA Rules may differ somewhat in terminology, they represent a fairly uniform standard at least in the commercial arbitration context. The AAA Commercial Rule 33 requires “likely” success whereas the CPR Rule 12.6(c) requires “reasonable” success. Yet, they essentially require the arbitrator to undertake the same analysis in evaluating the burden of proof since “likely” evokes a fair, reasonable chance of success, whereas the AAA Consumer Rule 33 and the AAA Employment Rule 27 with their “substantial cause” requirement demand a higher quantum of proof.

But the rules do differ slightly more when it comes to what the applicant must prove: under the AAA Rules, the arbitrator will determine if the applicant has shown that the motion will dispose of or narrow the issues whereas the CPR Rule requires the arbitrator to focus on the motion’s overall efficiency without added delay. The CPR Rule technically does not focus on the likely success of the motion itself but rather reasonable likelihood of gaining efficiencies if the arbitrator grants the motion. The difference is nuanced, however, and may ultimately result in the same outcome as motions which dispose of or narrow the issues will necessarily promote efficiency.

The real difference between the AAA and CPR rules centers on the concept of delay. CPR specifically directs the arbitrator to consider the potential delay caused by adding a dispositive motion practice to the arbitration process, while the AAA rules do not mention delay to the final award as a specific consideration. Under the CPR Rule, an arbitrator may rightfully deny an application for leave to file a dispositive motion if it would unduly delay the rendering of the final award. Thus, under the CPR Rule, an arbitrator is much more likely to deny leave to file a dispositive motion the closer the parties get to the scheduled hearing. Indeed, CPR’s emphasis on “early” disposition of issues encourages the parties to use dispositive motions during the preliminary stages of the arbitration before or after limited discovery.

Practical Tip: As the applicant, counsel should consider raising issue identification and disposition, especially of legal questions, at the very first case management conference to forestall any delay argument. If the parties and the arbitrator calendar the motion from the outset of the case, the nonmoving party will be hard pressured to argue undue delay. To further minimize delay, allow discovery to proceed on the factual issues while the arbitrator considers the legal issues. Conversely, as the nonmoving party, counsel should insist on the discovery necessary to fully adjudicate the issues before any motion practice. Be prepared to identify with particularity the discovery needed on each issue for which the applicant seeks early disposition.  

CPR’s Dispositive Motion Guidelines

More than just a rule, CPR provides arbitrators and parties well-considered guidelines on the process. CPR issued formal “Guidelines on Early Disposition of Issues in Arbitration,” (“Guidelines”), which strike a fair balance between unmeritorious motions and issue winnowing. The Guidelines clarify that the parties may use dispositive motion practice to narrow and simplify the issues for hearing and not just to dispose of the entire case. They also encourage arbitrators to take an active role in promoting early issue identification and disposition. Guideline 1.1. They also warn the parties and the arbitrator to consider efficiency to the case overall. In other words, the arbitrator may properly deny leave to file a dispositive motion if, even if granted, it would not materially reduce the total time and cost involved in the arbitration. Guideline 2.4.

Court Approval & Inherent Authority

The Sixth Circuit recently relied upon AAA Rule 27 to uphold an arbitral tribunal’s summary judgment disposition in a AAA employment arbitration. McGee v. Armstrong No. 18-3886, October 29, 2019. McGee did not explicitly address Rule 27’s language. McGee merely cited R-27 and held “as such, the arbitrators did not exceed their power.” While the court based its decision upon Ohio’s state vacatur statute, the statute contains nearly identical grounds for vacatur as the FAA. Consequently, McGee teaches us that courts will not likely vacate a dispositive award by arbitrators under the FAA or state law as an excess of power if it satisfies the requirements of the applicable arbitration rules authorizing arbitrators to summarily dispose of matters. However, even before the AAA and the CPR adopted their dispositive motion rules, the courts routinely held that arbitrators had inherent authority to entertain dispositive motions. See, e.g., Schlessinger v. Rosenfeld, Meyer & Susman, 40 Cal. App. 4th 1096 (Cal. App. Ct. 1995).

Types of Dispositive Motions

Dispositive motions typically fall into three groups: (1) threshold or pre-discovery motions; (2) post-discovery summary adjudication motions; or (3) tactical motions. Threshold motions often raise procedural issues, such as venue, necessary parties, arbitrability, jurisdiction, applicable arbitral rules, scope of the arbitration, mootness, standing, res judicata, collateral estoppel, joinder, small claims election, or consolidation. But they can present substantive issues as well, such as contract formation, contract existence, contract validity, waiver, laches, plain meaning, estoppel, choice of law, failure to state a claim, right to punitive damages, right to attorneys’ fees, statute of limitations, tolling, statutory construction, statute applicability, consent, irrevocable consent, contract provision enforceability, liquidated damages availability, injunctive relief, defenses based upon contractual covenants, statutes of fraud, release, and more.

Substantive post-discovery motions are akin to partial or complete summary adjudication but can also include a motion to amend the claim based upon newly discovered facts, a failure to state a claim based upon undisputed facts, or even a motion on the pleadings.

Parties sometimes use tactical motions, not necessarily for their merits, but to educate the arbitrator early on about a key issue or to get a pre-mediation or pre-settlement “read” from the arbitrator on a key issue. They may seek to eliminate an expert or other witness by removing the issue from the arbitration’s scope. They may simply hope to delay the proceedings, raise the costs to the underfunded party, or disqualify counsel. Fortunately, CPR’s rule specifically considers any delay caused by the motion as an explicit factor in denying leave to seek a dispositive ruling. Some have even used AAA Commercial Rule 57 to defeat jurisdiction: they move to amend the claim, increasing the amount of damages, which in turn increases the AAA administrative fees, which defeats jurisdiction pending payment of the augmented fees.

Practical Tip: Regardless of the type of motion, all should result in a written award or order, which specifies the basis for the denial or grant of the motion. The movant should craft a well-written proposed order for the arbitrator as part of the motion but so should the opponent. Consider whether to request an opportunity for renewal after the completion of discovery or an aspect of discovery if the arbitrator denies the motion. The proposal should also identify the discovery completed up to the motion to circumvent an attack based on incomplete discovery or evidence. The opponent should identify the discovery still needed before the arbitrator can fairly resolve the issue. If the motion only partially disposes of the dispute, identify the remaining issues to be decided at the hearing.

Bottom line: As long as an arbitrator provides the parties a fair opportunity to present their cases, she can grant a dispositive motion without violating the right to a fundamentally fair hearing—the touchstone for whether or not a court will vacate an arbitral award. So, when you can, consider threshold and dispositive motion practice in arbitration as a way to cost-effectively narrow or resolve the arbitration.

The views expressed in this article are those of the author(s) and do not necessarily reflect the views of The CPR Institute.

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Janice Sperow is a full-time arbitrator, mediator, hearing officer, and prevention facilitator. She serves on the CPR’s mass claims, employment, commercial, banking, financial services, dispute prevention, mediation, flat fee mediation, and pro bono panels as well as the AAA’s commercial, large case, employment, technology, healthcare, consumer, pro se, and workplace investigation panels. Also serves as a neutral for the San Diego Superior Court (where she sits as a Judge Pro Tem), the Financial Industry Neutral Regulatory Authority, the National Arbitration FORUM, the World Intellectual Property Organization, the National Futures Association, the National Association of Arbitrators and Mediators, and the Better Business Bureau. Member, National Academy of Distinguished Neutrals. Serves as Hearing Officer for the Port of San Diego. Former President of the National Association of Women Lawyers and Vice-President of California Women Lawyers, Member, ABA Dispute Resolution and Business Law Sections. www.sperowadr.com.

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

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

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

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

How did you get your start as a neutral?

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

Who is your dispute resolution hero/heroine?

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

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

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

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

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

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

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

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

Were you ever the first in doing something?

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

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

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

What makes your conflict resolution style unique?

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

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

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

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

What is the most important mistake you see counsel make?

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

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

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

Mediation should be mandatory before going to court or arbitration.

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

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

In your view, what makes CPR unique? 

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

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

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

Meet CPR’s Appellate Panel: Hon. James Eyler

Hon. James Eyler

Periodically, CPR showcases various members of our Distinguished Panel of Neutrals. Today, we continue our new feature, “Meet CPR’s Appellate Panel,” speaking with Judge James Eyler, of Eyler Dispute Resolution.

Eyler has engaged in both court ordered and private mediation, arbitration and neutral evaluation since May 1, 2012. He was a member of the law firm of Miles & Stockbridge, PC from 1968 -1995, and Chairman of the firm from 1991 to January 8, 1996. He served as Judge, Court of Special Appeals (COSA), Maryland’s intermediate appellate court, from January 9, 1996 until retirement in May 1, 2012. Since that time, he continues to serve on the Court part time as a recalled judge.

Eyler’s primary practice areas at Miles & Stockbridge, PC included torts, contracts, business disputes, appellate issues, mass torts, professional malpractice and commercial disputes. As an incumbent judge, he managed the Court’s prehearing conference program, including a mediation subprogram and conducted hundreds of conferences. Litigants may appeal as of right to the Court of Special Appeals. The Court’s jurisdiction extends to all cases appealed from trial courts with the exception of election law cases.

1.     How did you get your start as a neutral?

While in practice from 1968-1995, I enjoyed settling cases because I found that settlement was usually better for the parties than a trial. In the early 90s, I became interested in ADR and took beginning and advanced courses. After appointment to Maryland’s intermediate appellate court at the end of 1995, I assumed the role of prehearing conference judge, in addition to regular opinion assignments. This meant that I had occasion to utilize various methods of dispute resolution prior to briefing and argument. Since retirement, I have spent the bulk of my time conducting mediation, arbitration, settlement conferences and neutral evaluation.

2.     Were you ever the first to do something (e.g., in your law school class, your family, at your firm)?

I was the first in my family to go to college.

3.     Do you have any general words of wisdom for parties entering into deals and contracts, when it comes to anticipating future disputes and the right to appeal?

Understandably, when negotiating contracts, parties focus on the substance of the deal and often do not pay enough attention to dispute resolution provisions.

4.     What makes your style of conflict resolution in the appellate context unique? How is it different from dispute resolution, pre-appeal? Do you have a particular philosophy or approach?

Cases often have issues that cannot be raised on appeal. Alternative resolution provides an opportunity to resolve all issues. A unique aspect of cases on appeal is that the parties’ experience up to that point usually is a reminder that the court system is not perfect and “winning” is often unsatisfactory.

5.     Describe the most difficult challenge you have faced as a neutral and how you approached its resolution.

One of the most difficult challenges is getting through to people who articulate a goal or interest but insist on conduct that is inconsistent with their own goal/interest.

6.     What is your favorite part about being a CPR Distinguished Neutral?

A neutral gets more hugs than a judge or lawyer.

7.     Which types of conflicts would you recommend for ADR and why?

Any conflict which the parties want to settle and, therefore, approach with interest. Cases with a long history of animosity, revenge, distrust and the like are difficult. Cases that turn on a pure legal question that has ramifications beyond the case are difficult.

8.     What is the biggest mistake you see advocates make in an arbitration/mediation?

Treating it as traditional litigation.

9.     How can parties help to ensure progress when they reach an impasse?

Just keep talking. An impasse at 9 a.m. often turns into a solution at 5 p.m.

10. If you could change one thing about commercial arbitration/mediation, what would it be?

No suggestions. In mediation, my approach is to be flexible and use any and all techniques that may work. All cases have similarities but also have differences. I attempt to adjust my approach to the case.

11. What do you see as the “next big thing” in global dispute prevention and resolution?

Video conferencing

12. What in your view are the most unique and/or beneficial features of CPR’s Appellate Arbitration Procedure?

It provides an opportunity for correction in those infrequent cases in which the process goes awry.

The CPR European Advisory Board presents: “Meet CPR Distinguished Neutrals Based in Europe: Mladen Vukmir”

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

Mladen is the founder of Vukmir & Associates based in Zagreb, Croatia https://www.vukmir.net/.  He has a background in intellectual property and is both a patent and trademark agent, admitted to practice before the Croatian State Intellectual Property Office (CSIPO) and the European Patent Office.  He has been appointed by the Croatian government to serve as a member of the Board of Appeals for Patents and Topographies.  In addition, he is an arbitrator on the panel of domestic disputes at the Permanent Arbitration Court at the Croatian Chamber of Commerce, a panelist on the UDRP Domain Name Panel at the WIPO Arbitration and Mediation Center and a distinguished neutral on the CPR Panels of Neutrals and at the INTA PON as well as being an IMI certified mediator.

How did you get your start as a neutral?

I have always thought that the adversarial process is not properly aligned with the interests of the disputants.  During the second year of my traineeship, back in the Eighties, I attended a hearing in a divorce proceeding where I realized that I was not helping my client very much by bringing in legal expertise and positional thinking.  Although I was well educated, I was not equipped to deal with the human aspect of the challenge faced by my client, captured in a protracted lawsuit.  While it is a great anecdote, I will not retell it here beyond this summary.

As I am professionally involved in intellectual property, as soon as I became aware of the WIPO efforts in the mediation field, I joined its mediation education course in San Francisco, back in May of 2000 and immediately afterwards continued with the advanced trainings.  A couple of years later, I participated in a full USAid mediation training held in Croatia by US instructors, followed by the first batch of International Trademark Association (INTA) international trainings as well as some CEDR organized trainings for the local judge mediators.

I clocked up my first practical experience (as a volunteer mediator) through a pilot, court-annexed program initiated by the Croatian ministry of Justice. This was followed by more international trainings and commercial mediation in various settings

Who is your dispute resolution hero/heroine?

My biggest mediation hero is Judge Srđan Šimac of the Croatian High Commercial Court, who started independently from me the very same year, through a judges’ exchange program in Canada. Since 2000, he has succeeded in bringing Croatia into the group of countries considered to have a developed mediation scene.  A remarkable achievement.  Since he took over the Croatian Mediation Association (HUM), he has turned it into a highly professional and experienced mediation hub, with an established mediation center and various training programs.

One of my early international trainers, an Italian mediator, Carlo Mosca, is also someone whom I remember as being a big influence.  It was Carlo who first told me as a trainer during an INTA international training that a mediator is not responsible for the outcome of the process but is primarily responsible for the process itself.  I think this is a very important insight for young mediators.

I should also mention my early trainers Bill Marsh, the late Colin Wall, and David Richbell, as well as Robert Mnookin and Gary Friedman. In addition, I would also like mention Jack Himmelstein, who was not my teacher but whose video on joint meetings strongly influenced me in accepting the importance of the joint mediation sessions relative to caucusing.

What is the one piece of advice that you would want to give to the younger generation looking for a first appointment as neutral?

Take any mediation that becomes available to you in order to find out how you function in the role of a mediator.  It is important to find out as early as possible your own ideal balance between the knowledge you have acquired through mediation trainings, which helps to form you as a mediator playing her/his role and your own authentic self.  Finding this balance is important in order to be able to build a deeper rapport with the parties.  Secondly, do not hesitate to push much of the content typically dealt with during the opening phase into the preparatory phase of a mediation.  This will make running the process with maximum efficiency much easier and, again, deepen your rapport with the parties.

Were you ever the first in doing something?

I was among the very first in my country to become interested in mediation back in 1999. This, in itself, was a pioneering step.  However, I think even more important is the fact that since 1986, I have been very aware that the role of law will change in our societies.  After many centuries of the increasing importance of law as a central axis of social organization, we are now faced with the prospect of law shifting away from its central role as a tool of social organization.  To make myself clear, I do not think that law will vanish in any way, rather, I believe it will morph and shift to a different position in our societies, in a way similar to the path feudalism took previously.  It did not disappear, but transformed into today’s role of constitutional monarchies bound by law.

Before the legal profession was ready to discuss this type of issue, back in 2004 I published an article, entitled “Embracing the Negative to Achieve the Positive” in The European Lawyer magazine, pointing out what was perceived as wrong with the system (https://www.academia.edu/19744783/Embracing_the_Negative_to_Achieve_the_Positive)This preceded, by some four to five years, thinking about the limits of the legal profession such as those elaborated in the fascinating book The End of Lawyers by prof. Richard Susskind.

What makes your conflict resolution style unique?

I strongly believe that every individual has a unique mediation style and that every mediation will further influence it.  Each mediation is unique, just as snowflakes are and a good mediator understands that.  Every mediator is bound to be unique because if a mediator is true to himself or herself he or she will approach any problem in his or her own, unique way.  For example, because of my countercultural background, some street-smartness gained on the rock and roll scene, lengthy education in different countries and my legal family background, my own blend of introvert and extrovert characteristics, will certainly result in me having some individual approaches and ideas!

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

In retrospect, all of the challenges seem just like a learning process, whereby one gradually matures.  Certainly, one of the most unexpected for me was a situation that occurred early on in my career.  It happened in a business mediation and developed from a simple request by the parties to turn on the air conditioning in the room where we were meeting.  It was an unfamiliar setting for all of us, we were in a hastily adapted apartment that was being used on a temporary basis by the Mediation Center.  Not knowing where the AC controls were in this old apartment, I scanned the walls, looked under the windows and around the AC machines, as I did so I heard noises behind me.  When I have turned around I saw the parties on their feet pushing the table at each other.  The chairs which they had been sitting on soon started tumbling to the floor and then the shouting started. I managed to calm the parties sufficiently for them to pick up the chairs and sit around the table but I was not able to get the conversation running again or otherwise remedy the harm to the process that had occurred.  The parties decided to proceed with arbitration as per the dispute resolution clause that was applicable.

Back then I was a very young mediator and I have since learned a great deal about the importance of the environment, which I have used to great benefit in some difficult subsequent mediations.  For example, when faced with a serious impasse, it can be helpful to stand up and move away from the table, allowing the parties to regain space and start behaving partially out of the scope of authority of the mediator.  This technique can encourage parties to be more assertive achieving transition to the phase of ventilation more quickly thus breaking the impasse choking the process.

Besides this single example that I have selected here, in general, I still find it rather demanding to deal with ethically questionable episodes that are revealed in some mediations.

What is the most important mistake you see counsel make?

I generally see counsel that approach the mediation process with good faith and the utmost effort to sustain it.  Having said that, I can provide an example of a situation where a counsel sent me through the roof, figuratively speaking.  I will never know if it was a result of counsel not understanding the process or a deliberate attempt to undermine it.  The situation arose when I was engaged by an important international mediation center as a convener, as they could not convene the parties themselves.

I spent a couple of months getting familiar with the matter and building trust with the parties, only to see a representative of one of the parties defeat all that effort with a single letter, drafted against my advice which I had provided based on my understanding of the issues behind the refusal to mediate.  Instead of sending a carefully drafted, emotionally balanced and deferential communication, counsel decided to send out just another one of the positional threats that sounded impersonal and legalistic.  I am not sure that his client was consulted, or even informed about my efforts and recommendations.  The letter was not well received by the party that previously refused to mediate and it derailed the process.

My lesson here was that I might have had focused too much on the party that wished to avoid mediation and not enough on the party that was nominally willing to mediate. Regardless, it was really disappointing to see a colleague unable to contribute to, or even possibly intentionally undermine the rapprochement between the parties – by clinging onto the positional threats and impersonal communication.  Having said that, my overall experience is that counsel are very helpful to the mediation process in general.

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

I never look at arbitration and mediation as belonging to the same group of ADR methods.  Arbitration is a position-based process and mediation is not.  Arbitration has a third person deciding on the outcome, rather that the parties achieving the settled outcome.  I therefore, make a clear distinction between the two.  I serve in both processes, but largely refrain from presiding as an arbitrator because I feel that the energy I spend is not proportional to the degree of service I can bring to the disputants.

However, since I do serve as a wingman from time to time, I can say that in my experience, some arbitrations are indeed more burdensome for the parties than litigation is, in terms of costs, complexity and duration.  Because it is essentially a legal process, I think that the emphasis of the legal aspects in arbitration is not ideal in the ADR context.  Equally, mediation is not free from its downsides.  One of my early mediation trainers and a very experienced mediator himself said some twenty years after we have met and after he went through a mediation as a disputant for the first time, that he found the experience very difficult and much worse than he expected.  He felt the process was painful and his feeling had apparently nothing to do with the mediator, or with the other party making it difficult, it was just simply difficult to go through the mediation.

Admittedly, his experience was based on the personal dispute, not a business one. Nevertheless, in order to prevent such experiences, I would like to assist the disputants in feeling as good as possible in the mediation setting and I think that one of the ways of doing this is actually not to focus only on the process itself.  Of course, given the expectation of businesslike focus on the issue in dispute and the process itself, a mediator that departs from such focus risks appearing unprofessional.  In other words, what I would like to help disputants do is peel away layers of the professional masks we wear all the time and be themselves to a greater degree even in commercial mediations.

Now let’s turn to some specific topics:

  • What is your approach to cybersecurity and data protection in international dispute resolution?

I was always familiar with technology as I have worked with the IT industry early in my career and have myself been an eager early adopter.  I think that one should neither completely rely on the technology nor fear technologies’ weaknesses. All software is bound to have some security issues, but that is not a reason not to go digital.  Data can be lost and or compromised in the physical domain as well.  Parties must set the standard of security they wish to achieve jointly and the mediator needs to adjust to their decision.  As I am generally in favor of high transparency standards, I don’t have a personal urge to overprotect, but I will, depending on the circumstances, strive to adapt even to the highest security standards available.

  • Preliminary / early decisions: do you attempt to identify and decide potentially dispositive issues early in the case?

Generally, yes.  I think that “slicing the salami” in an arbitration has the potential to be very productive but I should say that identifying dispositive issues early does not necessarily mean that they will be decided early in most of the cases.  I just think that identifying them is likely to be beneficial and deciding on them needs to be determined based on the legal and factual considerations of each case.

  • Taking of evidence in arbitration: are you IBA Rules or Prague Rules?  And why?

I have studied law in both civil and common law systems and do not favor either one on principle.  I am mindful of the fact that procedurally, arbitration is often complex and it can sometimes be a burden for less sophisticated parties.  I therefore agree with the attempts of the Prague rules drafters to bring increased efficiency into the arbitral proceedings.  My general view is that it is best for the parties to settle in an interest-based proceeding, rather than to conduct a high-end position-based process to its end.

As I have mentioned above, I do participate as an wingman arbitrator but generally not as a presiding arbitrator because I believe that as a presiding arbitrator focusing on the positional legal process, I am not helping parties in the best most constructive manner.

What do you see as the next “big thing” in global dispute prevention and resolution?

Parties’ empowerment.  It is already happening and the parties who take responsibility for their contribution to the dispute and who ramp up their communication skills will successfully retake control of their disputes.  Parties that are skillful in recognizing all involved interests clearly and communicating properly about them are likely to diminish the overall number of unresolved disputes significantly.  Therefore, ubiquitous, everyday application of the advanced communication techniques by the parties themselves is going to make a sea change in the dispute resolution field.

For which types of conflicts would you recommend ADR?

All, and I do not say that lightly, I have come to that conclusion based on my experience that regardless of the nature of the dispute, joint efforts to resolve issues are successful in any arena when the parties put in genuine effort.  In some fields, the percentage of success might be lower, but communicating properly will continue to be of the utmost importance.

In your view, what makes CPR unique?

For me, CPR will remain unique as it was one of the first globally reputable mediation centers I was associated with.  This happened at the time of cooperation between CPR and INTA while Peter Phillips was still involved, back in the mid Nineties.  The degree of conviction in the strength of mediation that I have witnessed at CPR impressed me a lot and the great skills of the mediators associated with the Center has had a lasting impact on me.

Do you have any concluding remarks you would like to share?

It was Peter Phillips, whom I have mentioned above, who welcomed me warmly and took me for lunch during my first visit to the CPR offices.  It was immediately after an INTA meeting where Peter spoke with strong conviction and unabashed emotion about the benefits of mediation.  As someone with a background in rock culture, I was pretty much persuaded that this type of personal attachment to the cause is superior to the distanced ways so many of our colleagues choose to adopt.

The CPR European Advisory Board Presents: “Meet CPR Distinguished Neutrals Based in Europe: Jennifer Kirby”

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

Jennifer is the founder of Kirby in Paris, France.  She acts as counsel, party-appointed, sole arbitrator and chairman in arbitration proceedings under a variety of arbitration rules.  Her experience spans a wide variety of industry sectors.  In addition to CPR’s Panel of Neutrals, Jennifer is listed on the panels of many other international arbitration institutions around the world.  Prior to creating her own boutique arbitration firm, Jennifer was a partner at a large law firm (2008-2010), the ICC Deputy Secretary General (2005-2007), ICC Counsel (2002-2004) and an associate with large U.S. law firms.

Jennifer kindly agreed to grant us an interview.  Here are her insights:

1. How did you get your start as a neutral?

When I went to law school at the University of Virginia, there were no classes in international arbitration.  And if there had been, I probably would not have taken them.  I never took any international law classes or even had any interest in anything with the word “international” in it.  A more provincial American law student would have been hard to find.

On my first day as an associate at Simpson Thacher, the assigning partner told me he was putting me on an international arbitration with Jack Kerr.  I said, “What’s an international arbitration?”  He said, “You’ll figure it out.”

As I began working on my first arbitration, it was not too different from working on my domestic litigation cases.  As an associate, I was doing pretty much the same work – e.g., drafting briefs (but they were called submissions), preparing affidavits (but they were called witness statements), reviewing documents as part of discovery (but it was called disclosure).  There was, however, one thing I could do in arbitration that I could not do in domestic litigation: live in Paris. 

It was this realization that prompted me to seek out as much international arbitration work at the firm as I could.  After about three years, I spoke with Rob Smit and told him that (1) I wanted to work exclusively in international arbitration and (2) I wanted to live in Paris – neither of which were possible at Simpson at that time.  I asked Rob if he could help me find a job.  He said, “Maybe you could get a job at the ICC.”  I said, “What’s the ICC?”  He said, “You’ll figure it out.”

All told, I spent six years at the ICC – first as Counsel and then as Deputy Secretary General.  It was at the ICC that I really learned the ins and outs of international arbitration.  The ICC is to arbitration what SEAL training is to combat.  The learning curve is steep, and the work is demanding.  But by the time you leave the institution, you know how to handle pretty much any situation an arbitration can throw up.

I received an appointment as co-arbitrator from the LCIA not long after leaving the ICC to rejoin private practice.  At that point, I had already been working exclusively in international arbitration for about ten years and was a known quantity to people at all the major arbitral institutions.  While some institutions require you to have had a case before they will give you one, others are open to giving new arbitrators their first opportunity.  Thankfully, the LCIA was willing to take a chance on me.

2. Who is your dispute resolution hero/heroine?

Robert Briner.  Dr. Briner was the chairman to ICC Court during most of the years I worked there.  I had the pleasure of seeing him regularly and working with him quite closely for about five years.  That he was a giant in the field cannot be gainsaid, but saying this understates his significance to me, which is more personal.  He combined integrity, intelligence, practicality and diplomacy in a way that made him not just an inspiration, but a kind of guiding light.  To this day, when faced with a particularly tricky situation, I ask myself, “What would Dr. Briner do?” 

3. What is the one advice you want to give to the younger generation looking for a first appointment as neutral?

Once you have some meaningful experience as counsel under your belt, meet with arbitral institutions and let them know that you want to start sitting as arbitrator.  CPR, as well as the ICC and the LCIA take a keen interest in raising the next generation of international arbitrators and giving new people a shot.  As more senior people become increasingly oversubscribed, this is essential.

4. Were you ever the first in doing something?

Given that I am young (by arbitration standards), I doubt that I am the first to do anything.  Everyone in my generation necessarily stands on the shoulders of those who came before us.  Having said this, I believe that when I started my own boutique arbitration practice in 2010, I was among the first people to do so. 

At that time, clients were especially cost-conscious in the aftermath of the 2008 financial crisis.  How to Reduce Time and Cost became the prevailing theme at arbitration conferences around the world.  I started my boutique to offer top-flight arbitration expertise for smaller disputes where it would not be cost effective to engage a large firm. 

What surprised me, though, was how many arbitral appointments came in.  At that time, I was focused on acting as counsel and it had not occurred to me that this would happen.  But I’m glad it did.  For me, sitting as arbitrator is an honor, a privilege and a passion. 

5. What makes your conflict resolution style unique?

I make a point of knowing the file well from the beginning of the case through the award.  This allows me to manage the case proactively and efficiently and to take correct decisions quickly from beginning to end.  This may not be unique – indeed, I hope it is not – but (sadly) many lawyers have told me that it is rare.

6. What was the most difficult challenge you faced as a neutral?

I am often appointed in cases that promise challenges even many experienced arbitrators would have trouble managing.  So much so that, at this point, it is probably fair to say that I specialize in difficult cases.  The challenges I have faced are so numerous and varied that I cannot say which has been the most difficult.  Nor would I want to try, as describing the situations would necessarily entail disclosing circumstances that would be identifiable at least to the people involved and perhaps others.  Instead, I will simply make an observation. 

In 2009, Global Arbitration Review held a roundtable discussion in Paris on The Dynamic of Time and Cost.  At that event, Emmanuel Gaillard said that two attributes arbitrators should have are the “ability to anticipate” and “courage”.  As an arbitrator, it is not enough to keep up with a case.  You need to be thinking several steps ahead – anticipating the parties’ likely next moves and what will be coming down the pike.  And when the moment arrives for you to take a decision, you have to have the guts to take the correct one – come Hell or high water.  Unfortunately, too many arbitrators lack the courage to do so. 

7. What is the most important mistake you see counsel make?

Counsel in my cases are generally superb.  One of the great pleasures of sitting as an international arbitrator is seeing excellent advocacy.   In my experience, mistakes are rare – and important mistakes are even rarer. 

Having said this, I have occasionally had counsel who try to capitalize on the due process paranoia that at times seems more rampant than the coronavirus.  I am, however, immune to that particular disease.

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

I would have far more cases decided by sole arbitrators instead of three-member arbitral tribunals.

In 2009, I challenged the prevailing party preference for having three-member tribunals in my article With Arbitrators, Less Can Be More: Why the Conventional Wisdom on the Benefits of Having Three Arbitrators May Be Overrated.  There, I contended that, from a systemic perspective, having three arbitrators as opposed to one does not generally improve the quality of the arbitral process or the award and may actually do the opposite.  Any increased confidence parties have in the arbitral process from having three arbitrators is accordingly misplaced.

I wrote that article before I had ever served as arbitrator based on my experience at the ICC, where I participated in the administration of approximately 3000 international arbitrations and read and critiqued over 1000 draft arbitral awards.  Since then, my more granular experience sitting as arbitrator has only confirmed my views.  Given parties’ attachment to having party-nominated co-arbitrators, however, I do not have high hopes that the preference for three-member tribunals will abate any time soon.

9. Some specific topics:

a) What is your approach to cybersecurity and data protection in international dispute resolution?

CPR and FTI Consulting have developed a superb series of training modules on cybersecurity and data protection.  They explain the nature of the threats that currently exist, the duty arbitrators have to mitigate the risk they pose, and the practical steps arbitrators can take to do so depending on the particular circumstances of their practice.  I have found this series to be invaluable. 

And I can’t see the word cybersecurity without immediately thinking of Stephanie Cohen.  Steph is my go-to guru for all matters related to cybersecurity and data protection.  She is as practical as she is knowledgeable.  I cannot overstate how much I have benefitted from her expertise and guidance.   

b) Taking of evidence in arbitration: are you IBA Rules or Prague Rules? And why?

IBA Rules.  The IBA Rules reflect the prevailing consensus with respect to the taking of evidence in international arbitration.  In Procedural Order 1, I typically note that I may refer to the IBA Rules for guidance in the conduct of the proceedings and no party has ever objected to this or suggested that I should refer to the Prague Rules instead. 

In all events, however, I am not sure that the two sets of Rules would be as different in practice as one might think.  This is because the differences seem to me to be more matters of emphasis than fundamentals. 

Both the IBA Rules and the Prague Rules give arbitrators ample discretion to craft solutions that make sense in light of the circumstances of the particular case.  Does a reference to one set of Rules as opposed to the other lead arbitrators to exercise their discretion in a materially different way?  Maybe.  But if I had to guess, I’d say, “Probably not.”  Unless and until the Prague Rules gain greater currency, however, it’s hard to know.

10. What do you see as the next “big thing” in global dispute prevention and resolution?

I will be interested to see how expedited rules may come to affect arbitral rules more generally.  Many institutions now have expedited rules that provide for streamlined proceedings.  These rules are often designed with smaller cases in mind, but it may be that they ultimately point the way to making arbitral proceedings more efficient across the board. 

11. For which types of conflicts would you recommend ADR?

I am usually hesitant to suggest ADR to parties appearing before me.  In the cases where I sit, the parties and counsel are almost universally sophisticated and experienced.  I figure that they are aware of mediation and other forms of ADR and have considered those options.  If they have not gone down that route, there is usually a good reason. 

Having said this, I have on rare occasion had cases where I have suggested mediation at the outset.  These cases typically concerned situations where the parties had an ongoing relationship that it would be to their mutual advantage to preserve and the dispute seemed to arise from a breakdown in relationships between key individuals.  In short, they were textbook examples of the types of situations that can often be successfully mediated. 

In these circumstances, I suggested that the parties might want to consider mediation and explained why – not because I thought the parties had failed to consider it, but to clear my own conscience.  I just didn’t feel comfortable moving ahead with the arbitration without disclosing to them that I thought mediation might well allow them to reach a more constructive outcome more quickly and more cheaply.

12. In your view, what makes CPR unique?

CPR is a think tank that general counsel created 40 years ago to find ways to prevent disputes and promote the efficient resolution of any disputes that do arise.  Through CPR, in-house counsel, practitioners, neutrals and academics collaborate to find innovative solutions to some of the field’s most vexing problems.  It is CPR’s members who develop its rules to ensure that they are always in sync with users’ needs.

13. Do you have an anecdote you would like to share?

My decision to leave New York and go to the ICC was more fraught than one might initially assume.  While I wanted to move to Paris and specialize in arbitration, it also required me to step outside my comfort zone.  Apart from a college year abroad at Cambridge, I had never lived outside the US.  My French was rusty (to put it mildly).  Since law school, I had only ever worked in large law firms.  Leaving Big Law in New York for the ICC would mean leaving all my friends.  It would also mean taking a hefty pay cut. 

As it came time for me to take my decision, I started getting cold feet and felt unsure about what I should do.  I called Hans Smit to talk things over.  He listened patiently as I explained my fears and reservations and then said, “Jennifer, will you please just go and lead an interesting life.”  Thanks to Hans, that is what I’ve been doing ever since.

Meet CPR’s Appellate Panel: Hon. Christopher Droney

Hon. Christopher Droney

Periodically, CPR showcases various members of our Distinguished Panel of Neutrals. We are pleased to introduce a new feature, “Meet CPR’s Appellate Panel,” and begin with this interview with Judge Christopher Droney, of Day Pitney LLP.

Droney is a former Judge for the United States Court of Appeals for the Second Circuit and the United States District Court for the District of Connecticut, as well as the former United States Attorney for the District of Connecticut. As a federal court of appeals and district judge, he presided over many trials and appeals in all matters that come before the federal courts, including intellectual property, unfair trade practices, employment discrimination, class actions, securities matters, commercial matters, antitrust, technology, insurance and corporate disputes.

A member of faculty for the National Advocacy Center, he taught at the Yale Law School and the University of Connecticut School of Law in trial and appellate courses. As U.S. Attorney, he was a member of Attorney General’s Advisory Committee of U.S. Attorneys and co-chair of its Civil Issues Subcommittee. He is also a member of the Committee of the U.S. Judicial Conference on the Administration of the United States Bankruptcy System and the Board of Directors of Federal Judges Association.

Q. How did you get your start as a neutral?

I got my start as a neutral fairly recently when I retired from the federal bench at the end of 2019.  However, before that I was a federal trial judge for fourteen years and a federal appeals judge for eight years.  In those positions I gained a great deal of experience in resolving disputes in so many different areas, whether it be commercial, trade secret, employment, antitrust, civil rights, class actions, securities and others.  I believe my time on the trial bench and the appellate bench combine for a rare insight into how to arrive at solutions for much-disputed matters and how to assess different sides of matters.  That experience also helps in seeing the essence of disputes and the best ways of drilling down on issues.

Q. Do you have any general words of wisdom for parties entering into deals and contracts, when it comes to anticipating future disputes and the right to appeal?

It is very often that the dispute resolution provisions of an agreement get little attention at the time the transaction is completed.  That is understandable as the parties typically expect success in all aspects of their relationship.  It is a mistake, however, to not give sufficient care in crafting those provisions and making them as specific as possible, especially as to the venue for resolving differences, the choice of law, the arbitral forum, etc.  In the unlikely event of the need for those provisions, at least the parameters of how to resolve the disagreement will be clear, and making headway in resolving substantive issues will be more timely.

Q. What makes your style of conflict resolution in the appellate context unique? How is it different from dispute resolution, pre-appeal? Do you have a particular philosophy or approach?

My experience on the Second Circuit is especially helpful.  I had eight years of dealing with complex issues in many different substantive areas and in attempting to achieve a common resolution with other judges.  I also gained a great deal of experience in becoming a “quick study” in very technical and complicated matters.  My experience in the district court helped greatly in being able to understand a variety of trial dockets and the procedures for resolving disputes, including practice rules and evidence.

Q. Which types of conflicts would you recommend for ADR and why?

Most business disputes lend themselves to ADR resolution as it is swifter than litigation, fair and thorough.  Perhaps technical areas are particularly well-suited to ADR resolution as the parties can select arbitrators or mediators who have background or experience in the particular area.  That is not always true in litigation.

Q. How can parties help to ensure progress when they reach an impasse?

If the parties reach an impasse, the best advice is to have an open mind about a creative solution.  Lawyers often are so close to their cases that they sometimes lose perspective and are not as open-minded as they could be. That is where the neutral comes in:  to offer solutions that perhaps counsel would not come up with on their own and to explain the positive aspects to all sides.

The CPR European Advisory Board Presents: “Meet CPR Distinguished Neutrals Based in Europe: Catherine Peulvé”

The CPR European Advisory Board (EAB) continues its series “Meet CPR’s Distinguished Neutrals in Europe” and today it presents its next Q&A, with Catherine Peulvé, a commercial lawyer and mediator, CPLAW Paris, France.

  1. How did you get your start as a neutral?

I can date my start as a Neutral to the opening in Paris (France) of my law boutique CPLAW in 2007. Indeed, after several years with UK and US law firms (Freshfields Bruckhaus Deringer LLP/Cleary Gottlieb Steen & Hamilton LLP), including practicing abroad, I realized that despite being a lawyer and having gained a huge amount of experience as a litigator, I did not know so much about negotiation and mediation.

2. Who is your dispute resolution hero/heroine?

Charles-Maurice de Talleyrand, he is said to be the “Prince” of negotiators.  He is known for excellent preparation, obtaining and exploiting the necessary information, winning concessions and using lobbying strategies at private receptions: all principles that are still prevalent both around and outside the negotiating table.

3. What is the one piece of advice you would want to give to the younger generation looking for a first appointment as neutral?

“Give me six hours to chop down a tree and I will spend the first four sharpening the ax, ” said Abraham Lincoln, former president of the US. Thinking about this sentence, my advice to the younger generation would be learn how to learn and improve before doing. In other words, they must be well prepared. You can work hard as a neutral during sessions, but the magic happens when you have spent time preparing, structuring the process and perfecting your skills.

4.   Were you ever the first in doing something?

–     First women president of the Association for Business Lawyers (ACE) – Paris Section
–     First lawyer in my family
–     Winner of the Freshfields – Les Echos prize that launched my international career
–     Major of my student promotion at the Master’s Degree in Business and Economic, University of Panthéon Sorbonne Paris (1990)
–     Head of list of the ACE business lawyers for the election of the French National Council of Bars (CNB)

5. What makes your conflict resolution style unique?

I have been described, when appointed in a major, long-lasting, multi-dimensional mediation concerning a conflict that had been made public by the other side, as an outstanding mediator that managed the whole process in an extremely efficient manner, both in terms of ensuring the overall tone of the mediation and keeping the mediation on track over time.

My style is facilitative and I combine self-confidence with a sound command of the mediation framework, techniques and tools.

I invest time in training, keeping abreast of new tools that may enrich my practice.

6. What was the most difficult challenge you faced as a neutral?

The absence from the mediation table of a key family member in a complex inheritance and partnership dispute involving a real estate company. One of the sisters was  represented by her husband.  There was an uncomfortable atmosphere (the sister was kind of a “ghost” in the mediation), and I felt like the sessions were being recorded but I could not raise this issue upfront.

7.   What is the most important mistake you see counsel make?

Pleading their case rather than adopting a less adversarial style.

8.   If you could change one thing about commercial mediation [please chose one], what would it be?

Compulsory mediation: the French law of 23 March 2019 which reformed the justice system, introduced two new rules for amicable ADR: the principle of compulsory prior mediation in certain disputes and the possibility for any judge, in any matter, to order the parties in dispute to meet with a mediator. While the second option is a potentially interesting path, I regret the inclusion in our legislation of the first option (compulsory mediation), even on an experimental basis, for a number of reasons. It is inconsistent with the principle that the parties must be willing to mediate, particularly in commercial disputes, bringing them to the table before they are ready is unlikely to be beneficial.  Compulsory mediation undermines the principle of confidentiality which is the backbone of the success of mediation.  It is for the parties alone to determine the application of confidentiality obligations to their process, including with respect to the content and the outcome of the mediation as well as its existence. Making mediation compulsory obliges the parties to make the existence of their process public.  The new requirement could be counterproductive: for example, if the parties do not reach an agreement, it will obviously be very difficult to convince them to go to “real” mediation.

9.   Some specific topics:

What is your approach to cybersecurity and data protection in international dispute resolution?

Data security is important in all matters, including in dispute resolution. With respect to international dispute resolution, one must not only be cognizant of the requirements under the European General Data Protection Regulation but also of requirements in territories other than Europe and how the two sets of requirements operate (or not) in combination. As far as cybersecurity is concerned, we need to be attentive to protecting the confidentiality of information shared (arbitration and mediation, plus caucus confidentiality in mediation) and to choose the right tools to achieve that. So far as I am aware, CPR has been at the forefront of several pioneering initiatives in the field of cybersecurity and data protection over the past few years. 

10. What do you see as the next “big thing” in global dispute prevention and resolution?

The impact of the Singapore Convention on international business mediation.  I would like to share links to an abstract of an article I contributed to recently with other lawyers (French, Italian, Lebanese, Greek) on this subject : https://www.actualitesdudroit.fr/browse/civil/procedure-civile-et-voies-d-execution/26916/the-impact-of-the-singapore-convention-on-the-international-business-mediation

http://giustiziacivile.com/arbitrato-e-processo-civile/approfondimenti/limpatto-della-convenzione-di-singapore-sulla-mediazione

11. For which types of conflicts would you recommend mediation?

I think there are several good reasons for opting for mediation in business disputes:

–     Long term relationships can generally be maintained
–     Confidentiality is preserved
–     Offers an exit from a deadlocked situation
–     Helpful if the legal background is complex or there is a lack of proof
–     The financial consequences of the conflict would be too high to risk in litigation
–     It is a matter of urgency

There are also good reasons for NOT initiating or stopping a mediation process :

–     Bad faith of one of the parties
–     A third party is missing (ex. insurer)
–     A third party does not want to change its position/demand
–     A judicial decision is needed (Public order, precedent, publicity…)

12. In your view, what makes CPR unique?

Before I joined, I was impressed by CPR’s reputation and amazed by its detailed and accurate communications on several ADR issues worldwide. Since joining, I have been convinced that CPR possesses the appropriate skills, tools and talents for being a major ADR Center and I have been impressed with its reactivity to the Covid-19 crisis.  In particular, with the training webinars, information sharing, messages to Neutrals to stand together and find solutions.

CPR = energy + information + sharing + adaptability

13. Do you have an anecdote you would like to share?

I was once asked by a mediation Center to draft a default report because one of the parties refused to enter into the mediation process.  I was able to transform the situation into a fruitful and effective mediation, that ended with a successful and long term agreement between the companies.

I have been asked sometimes to give my tips on how I achieved this turn around. Although it is quite difficult to answer that question, I can share the following : (i) I urged the party not wishing to enter into the mediation process to be present at this meeting, and to be represented by one of its top guys; (ii) I was careful to ensure my attitude was very optimistic when meeting with the parties; (iii) I started to explain the rules and purpose of a mediation process.  Finally, the top guy, who made the effort to come and who had spent some time listening to what a mediation process entailed, probably understood that it was worth trying. Once we had reached that stage as part of the same meeting, I was meticulous about structuring the process (number of meetings /topics on the agenda / topics per meeting / participants and experts per topic…) and the rocket was launched to go for exploration.