CPR, LCLD & FINRA Program Aims for Actual Selection, Not Just Training, of Diverse Neutrals

CPR’s Diversity Task Force, in collaboration with Leadership Council on Legal Diversity (LCLD) and Financial Industry Regulatory Authority (FINRA), have been hard at work on a program that aims not only to train diverse candidates to become mediators and arbitrators, but provides meaningful opportunities to position participants to ultimately become selected as neutrals—the only thing that will ultimately have an impact on diversity in ADR.

As Noah Hanft, CPR’s President & CEO, has stated, “Diverse neutrals need experience to show quality, build their reputations and earn their selections—but, in order to gain that all important experience and develop their skills, they first need to get selected. The riddle is circular but not impossible to solve, and those who prevent, or at least fail to support, the latter cannot in good conscious unequivocally demand the former. We can, and must, do better. This next generation of talented individuals is poised to make a real difference, if we will only recognize our roles and do our part.”

The program, which launched last year in a pilot phase, provides participants with early skills development and unique access to professional development opportunities in dispute resolution through: (a) formal training in mediation and arbitration skills and practical observational experience; (b) mentoring by skilled neutrals; and (c) networking opportunities within CPR’s commercial dispute resolution community via attendance at these organization’s events at no cost or at a discount. Last year’s program produced six neutrals, and this year we have five participating—a wonderfully diverse and talented group hailing from New Jersey, Chicago, Houston, Miami and Atlanta.

joehanna.jpgAccording to Joseph M Hanna (pictured left), a Partner at Goldberg Segalla and a participant in last year’s program, “Even if you’re not engaged in arbitration or mediation, you will use the techniques and the ‘soft processes’ that you pick up during this training and from your mentors every day—whether you are practicing law, litigating cases, working with colleagues, mentoring young associates or even dealing with your family.”

“I found the program to be quite valuable on a number of levels,” explained Brenda DiLuigi (pictured right), Counsel at Linklaters LLP. brenda“The program provided access to very high-quality ADR training, mentoring by seasoned professionals, and networking opportunities in the ADR community generally. From my perspective (in particular, as counsel to clients facing the significant challenges associated with doing business in a heightened regulatory environment), the FINRA arbitration training program was extremely valuable, and I feel fortunate to have the ability to serve as a neutral in that capacity. I also enjoyed being part of a cohort of program Fellows who are beginning their careers in ADR.”

As a first step in this year’s program, participants were invited to complete the FINRA application to become an arbitrator so that they could become eligible to join FINRA’s roster of neutrals. After indicating their individual areas of interest, participants were assigned to, and have started to meet with their program mentors.

The program’s first official event will be CPR’s Corporate Leadership Award Dinner (including VIP reception) honoring David McAtee II of AT&T. Thereafter, program participants are invited to attend all CPR events that take place during the program, at no cost.

Once applications are approved, participants will be required to take FINRA’s first two training components online at their convenience. FINRA will then hold an in-person training for this group at the CPR offices in early April, following CPR’s annual meeting in Atlanta, GA taking place March 8-10, 2017. There will be no cost associated with any aspect of FINRA’s training and application process.

KristyKristy Offitt (pictured left), an Employment litigator at Ogletree Deakins and a member of this year’s program, signed up after receiving an email from LCLD. She has already been assigned two mentors and has started meeting with them. In addition to feeling that the negotiation and other skills learned in the program will be transferable, generally, to the work she is currently doing, Kristy explained, “I would love to do more mediation and arbitration later in my career, so I saw this as a great opportunity to start building a foundation toward that goal. It’s great to get this mediation experience.”

And do last year’s participants have any parting advice for the current class? As program alum Joseph Hanna aptly summarized, “Take full advantage of your mentors; they are there to help you. Take every opportunity you have to ask questions, meet with them, spend time watching them work. Nobody does it better than the mentors in this program.”

CPR Appoints New Cyber Panel Ahead of Anticipated Increase in Data Security Disputes

By Kate Wilford, Hogan Lovells (London)

The International Institute for Conflict Prevention and Resolution, a New York-based organisation offering Alternative Dispute Resolution (ADR) services, has recently announced the launch of a new specialised panel of neutrals, commissioned to deal with cybersecurity disputes. The Cyber Panel is composed of experts in cyber-related areas such as data breaches and subsequent insurance claims. In a press release, Noah Hanft, President of CPR, described the new panel as guiding the “critical effort” by businesses to “prevent and/or resolve cyber-related disputes in a manner that best protects operations, customers and reputation” due to attacks now occurring with increased frequency and sophistication.

CPR’s decision to establish a specialist cyber panel addresses a perceived need for arbitrators and mediators with relevant expertise, given that data protection and security breaches are regarded as an increasingly common cause of technology, media, and telecommunications (TMT) disputes, and therefore a significant growth area for commercial dispute resolution. According to the 2016 International Dispute Resolution survey on TMT disputes conducted by the School of International Arbitration at Queen Mary University of London, respondents predicted a 191% increase in disputes related to data/system security breaches, the largest growth area identified by the survey.  Despite the fact that only 9% of respondents had encountered such disputes over the last five years, 79% of respondents thought that they were either likely or very likely to arise over the next five years. The survey also suggested that data breaches are most often caused by employee action, followed by malicious third party attacks, with both being more common than breaches caused by system failures.

Given the significant reputational and financial damage that can result from a data security breach, it is crucial to resolve subsequent disputes through the use of a reliable procedure which is tailored to the wider commercial context. This is why TMT companies are increasingly often turning to international arbitration which, as the survey shows, was respondents’ preferred mechanism for resolving disputes in the sector. Compared to the 43% of respondents who expressed a preference for arbitration, only 15% chose court litigation as their most favoured option. However, at present, litigation remains the most used mechanism in practice, used in relation to 44% of TMT disputes over the last five years. In that regard, the authors of the survey add that many of these disputes arise from contracts which were concluded long before arbitration grew in popularity and consequently, they do not include an arbitration clause. If this is true, we are likely to witness a significant increase in the number of TMT arbitrations. Indeed, 82% of respondents believed that there was likely to be a general increase in TMT arbitrations.

In general, the survey suggests that TMT companies may require more confidence in international arbitration in order to make this theoretical preference a reality. One way in which this could be addressed is by increasing the number of arbitrators with specialist knowledge of the sector and the specific issues in dispute. This approach appears to correspond with the views of the respondents to the Queen Mary University of London survey, which identified the technical expertise of the decision maker as an important aspect when deciding on a dispute resolution mechanism, as well as decision makers. In light of this conclusion, it was a logical step for CPR, which already has a series of specialist panels in other areas, to appoint a specialised Cyber Panel which may appeal to parties faced with disputes relating from data security breaches. More generally, there seems to be a wide consensus that cybersecurity-related arbitration is going to be an area of future growth.

Kate Wilford is a Senior Associate in Hogan Lovells’ London office. She represents international companies in large-scale, international commercial disputes. Her practice focuses on international arbitration (most frequently under the ICC, LCIA and UNCITRAL rules) and associated court litigation, including challenges to and enforcement of arbitral awards. Ms. Wilford’s full bio can be accessed HERE.

This post was originally published at http://www.hldataprotection.com/2017/08/articles/cybersecurity-data-breaches/cpr-appoints-new-cyber-panel-ahead-of-anticipated-increase-in-data-security-disputes – the Hogan Lovells Chronicle of Data Protection blog. It was also republished on the firm’s international arbitration blog, ARBlog and is republished here with permission.

CPR Launches New Cyber Panel Focused on Security Disputes and Related Insurance Claims

A cyber security breach occurs, possibly exposing consumer or other sensitive information. What happens next, at the corporate level?

Certainly underlying any serious cyber event are the questions of who is responsible, who is going to do what to remedy it and who is going to pay for it, including related insurance issues that will arise.

“With attacks occurring with both greater frequency and sophistication, smart companies and their counsel are adopting proactive strategies to prevent and/or resolve cyber-related disputes in a manner that best protects operations, customers and reputation,” said CPR President & CEO, Noah J. Hanft.

With CPR’s announcement, today, of a new CPR Cyber Panel, now those strategies can even more squarely include CPR, as well as thoughtful options outside of traditional litigation. The CPR Cyber Panel contains neutrals who are expert in data breaches and other cybersecurity issues, as well as those experienced in handling related insurance coverage disputes.

“Mediation of cyber security disputes and insurance claims if done by the right individuals can drive substantial value to all parties,” said Daniel Garrie, a longtime CPR Distinguished Neutral, Editor-in-Chief of Law & Cyber Warfare and CPR Cyber Panel member. “Of course, it is critical that your mediator have the mediation experience and real-world technical cyber expertise to ensure the right outcome. If done by the right individual supported by a quality ADR organization with strong rules and protocols, an entity will be able to realize the benefits a cyber security neutral.”

In the Law360 article, “Growing Demand for Mediation of Data Breach Disputes,” Barton LLP Partner and CPR Cyber Panel member Kenneth N. Rashbaum stated, “For reasons of financial savings, efficiency and plain peace of mind, those who prepare agreements in technology areas have increasingly turned to mediation and other dispute resolution clauses and this, in turn, has created a demand for mediators with backgrounds that comprise multiple practice areas, including cybersecurity, privacy, technology transactions and litigation. And they should open to dispute-mitigation alternatives. For example, arbitration clauses have been around for a very long time but newer and possibly less expensive modalities include ‘cooling-off and mediation’ provisions that require the aggrieved party to notify her counterpart of the disputed matter and then, only after a certain period of time, the parties will proceed to mediation and can only go further, to arbitration or litigation, if mediation fails.”

“One of the things CPR has particularly prided itself on, over its 40 year history, is being both tuned in and highly responsive to the needs of our members and the ADR community as a whole,” said CPR’s Helena Tavares Erickson, Senior Vice President,
Dispute Resolution Services and Corporate Secretary. “CPR’s new Cyber Panel is a perfect example of that dynamic in action: We were told about increasing cyber-related dispute resolution needs, and we acted. We encourage the community to let us know its needs as we are ready to act.”

CPR’s Panels of Distinguished Neutrals comprise those among the most respected and elite mediators and arbitrators in the world. They include prominent attorneys, retired state and federal judges, academics, as well as highly-skilled business executives, legal experts and dispute resolution professionals who are particularly qualified to resolve all business disputes including those involving multi-national corporations or issues of public sensitivity.

Focusing in more than 20 practice areas, CPR’s esteemed arbitrators and mediators have provided resolutions in thousands of cases, with billions of dollars at issue worldwide. Admission to one of CPR Panels occurs only after an individual is reviewed and approved by CPR and/or a select panel of high-end users, peers and/or academics. Candidates are screened for their ADR expertise and training, and candidate references are asked to comment specifically on the applicant’s qualifications to serve on complex commercial disputes. Qualification to the CPR roster is demanding and available openings are limited.

“Once again, Noah Hanft and CPR are leading the way in dispute resolution,” concluded Steven J. Antunes, Senior Litigation Counsel at AEGIS Insurance Services, Inc. “As the law regarding cyber security evolves and the claims become more sophisticated , the most cost effective manner in which to resolve cyber-related disputes may very well be through mediation.”

The Future of Online Dispute Resolution: Transformation & Preservation

On June 5, 2015, CPR President & CEO Noah Hanft delivered the keynote address at “ODR 2015,” held at Pace University Law School — an event that brought together the world’s leading online dispute resolution (ODR) practitioners, policymakers, entrepreneurs, members of the judiciary and academics.

Over the past few years, use of online dispute resolution has grown and matured in ways that are astonishing, both in the range of uses and the speed with which it has been embraced. Mediation and arbitration are rapidly moving online. Consumers, businesses and lawyers increasingly expect to be able to resolve any issues that arise 24 hours a day and 7 days a week, right from their laptops and tablets. Transactions also now routinely cross the globe, and disputants are unwilling to sort out complex issues of jurisdiction every time a problem crops up.

Enter ODR, which is the application of information and communications technology to the practice of dispute resolution. Demand is growing steadily. Continue reading

Arbitration Fairness Act of 2015 (AFA): An Overly Simplistic Approach?

The Arbitration Fairness Act of 2015 (AFA), recently introduced by Senator Al Franken and Representative Hank Johnson, would amend the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. (FAA), to eliminate mandatory, pre-dispute arbitration clauses in employment, antitrust or civil rights matters—as well as all nearly all consumer contracts, for such things as cars, credit cards and cell phones. Allowing parties to agree to arbitration only after a dispute has arisen, the AFA would apply to “any dispute or claim that arises on or after” the date of AFA’s passing. The legislation would also give federal courts—instead of arbitrators—the authority to rule on an agreement’s validity and enforceability.

This is not the first legislative effort to narrow the use of pre-dispute arbitration agreements; somewhat similar bills were introduced in 2011 and then again in 2013, but neither made it out of committee. While some are applauding this step towards banning what they refer to as “forced” arbitration, others have expressed concerns that requiring parties to agree to arbitration only after a dispute has already arisen might take away the parties’ critical ability to utilize arbitration preventatively, planning for it in order to avoid disputes in the first place. Others question the wisdom of transferring these responsibilities away from arbitrators and to an already beleaguered court system. Finally, while the AFA does not expressly prohibit businesses from entering into pre-dispute arbitration agreements with other businesses, some question the effect this might have on the enforceability of arbitration in business contexts where there is potential consumer application.

Institute for Conflict Prevention & Resolution (CPR) President & CEO Noah Hanft observed that, “Just as with litigation, there are circumstances where arbitration may be abused. But, if practiced properly and thoughtfully, as it should be, arbitration remains a  more effective, efficient and less costly way to resolve certain disputes—a result from which consumers can clearly benefit as well.”

Hanft concluded, “Care must be taken that any legislation aimed at protecting abuses in the use of arbitration not be overly simplistic or condemn a practice that has brought real benefits in a multitude of circumstances around the world. Even advocates of tort reform that decry litigation abuses don’t propose sweeping bans on certain types of litigation.”