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UIA Mediation Forum and Employment Systems Design

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The Union International des Avocats have hosted the World Forum of Mediation Centres since 2002, and I have attended all but three of their meetings.  It is a convivial crowd of well-informed, deeply committed and sociable folks who tend to meet at interesting (mostly European) venues.

The meeting scheduled for Luxembourg on April 22-23, 2016, will feature many of the topics and speakers that make the organization so valuable.

It will be tinged with tristesse on this occasion, however, since it will be the first time that the late Colin Wall, co-President and co-Founder, will not be with us.  By way of both honoring and exemplifying Colin’s devotion to sharing insights on mediation, the program designers have asked various speakers to contribute a paper for inclusion in a volume to be published in Colin’s honor, proceeds to go to his designated charity.  My topic is systems design for employment dispute resolution, and the article follows.

Designing Employment Dispute Management Systems

Peter Phillips[1]

               In 2002, CPR Institute for Dispute Resolution[2] published a compendium of 20 American employers’ internal workplace dispute programs (the “Compendium”).[3]  The Compendium also included a comparative analysis of certain attributes of these programs,[4] as well as interviews with six program designers and administrators.[5]

This article summarizes the findings of this study. Some of the concerns addressed by the internal programs are unique to the American context, particularly its regulatory and statutory environment concerning workplace rights and regulations.  The overall approach reflected in these programs may nevertheless be of interest to students of workplace dispute resolution in other countries.

Why do companies adopt internal employment dispute systems? 

How do they measure whether the systems are successful?

            The impetus for most employment dispute resolution programs is usually managerial, and only secondarily legal.[6]  Though many companies are prompted to create employment dispute programs because of an adverse judicial ruling involving a class of employees, [7] a systematic managerial approach to workplace conflicts, clearly articulated and neutrally applied, lends consistency and manageability to the workplace.  It assists in identifying flaws (including supervisory weaknesses) in the workplace that might otherwise undermine employee confidence and morale.  It discourages intuitive, retaliatory, or vituperative managerial response to employee behavior.  Corporate policies and interests, rather than individual supervisors’ predispositions, drive company practices in the workplace.

            Additionally, there are the benefits of preventive legal exposure.  Managerial efforts to identify conditions or behaviors that might ripen into a legally cognizable cause of action, and to create nonlitigious avenues of redress, are clearly economically beneficial.[8]  Thus, well-planned and properly administered employment dispute management programs are not only managerially rational, but legally prudent.

The managerial goals of a dispute management program require the adoption of appropriate metrics.  That is, companies measure success in this area the same way they measure the success of any organizational system or policy – by a metric chosen for that purpose.  The effectiveness of employment dispute management programs might be measured by any of the following criteria:

  • How long does it take between the initiation of an employee complaint and its satisfactory resolution? And what resources (person-hours, days, etc.) are expended in that process?
  • What are the average costs of internal and external counsel in addressing an employee complaint?[9]
  • What is the rate of employee turnover before and after establishment of the program?
  • What is the rate of employee complaints filed with external government regulatory agencies?
  • What is the rate of employee utilization of the program?
  • To what extent are resolutions achieved at a junior management level, without implicating senior management time?
  • Are users generally satisfied with the experience of using the program? Would they recommend that peers use it?[10]

These metrics are merely indicative.  Each employer may adopt measurements that suit its management goals.[11]  The main point is that setting metrics to determine the effectiveness of any program is as important as creating the program itself.

Structural overview

            Almost all of the programs in the Compendium were designed with sequential and progressive phases, or steps.  Classically, the first step was consultative and informal; the second step was professionally facilitated formal negotiation (such as mediation), and the third step was adjudicative, either public (litigation) or private (arbitration).

Distinctions among the programs were variations on either the details of these processes or their sequence.  Some companies allowed mediation without the requirement of prior consultation.  Some companies made mediation optional for employees but, once selected, mandatory for supervisors.  Some used Human Relation officers as the first consultative step; others had peer review systems or methods to consult with management other than one’s immediate supervisor.  In some programs arbitration was binding on both parties; in others it was binding on the company but optionally binding on the employee.

Some companies required employees to use the program; others simply offered it.  One company encouraged employees to seek legal advice before accepting a proposal in settlement, and even offered to pay towards the employee’s legal costs for this purpose.  One company had no requirement of sequential use of its steps, and offered four rather than three: an “Open Door” or “Hot Line” option, an “Internal Conference” option, a “Mediation Option,” and an “Arbitration Option.”  Some companies required employees to waive court redress and agree to final and binding arbitration as a condition of employment; others offered but did not require it.

In designing “stepped” employment dispute management programs, all of the companies studied found it necessary to confront certain considerations.  These included:

  • Scope: Which employees will be covered by the program, and which disputes are cognizable under the program? Within the program, are some claims included in informal consultations but excluded from arbitration?[12]
  • Cost: Should employees be required to contribute to the cost of processes such as mediation or arbitration? Would cost-sharing deter usage, or would it ensure that the employer is not perceived as “owning” third-party neutrals such as mediators or arbitrators?
  • Neutrality: Who makes the choice of arbitrators and mediators?  How should the program address the risk of the “repeat-player syndrome,” where the same arbitrators are hired repeatedly by the company and are perceived by employees as incentivized to find in favor of the employer?
  • Incentives/Rewards: Many managers of well-designed programs are concerned to maximize employee usage. Should the program offer an incentive to prompt employee usage, or a reward as a consequence of usage?
  • Collaborative Design: Should the program be designed and then unveiled to the workforce, or should representatives of the workforce be enlisted in the design process? One employer strategically engaged union representatives who were predicated to object to the program, in an effort to co-opt that objection and create “ownership” by trusted members of the workforce.
  • Implementation: Even the most sophisticated program is ineffective unless utilized.  Who shall the program be communicated to employees?  Will junior supervisory management perceive that their authority has been undermined?  Should the “C-Suites” be involved in launching the program and making clear the company’s expectations of compliance with its directives?[13]

Skills of consensus-building are particularly valuable in this context.  The broader the input in program design, the more likely the program will be effectively implemented.  Objections to any program features are best heard early in the design stage, and not only addressed, but seen by the objector to have been addressed, in order to obviate their inevitable airing at a later time in less flexible circumstances.

The challenge of early problem identification

Four attributes of successful internal employment dispute management programs may be articulated as:

  • Providing expense-reduction benefits through front-ending resources to address problems before they ripen into more costly disputes
  • Encouraging amiable resolution of conflicts while avoiding animosities engendered by litigation
  • Building “early detection” mechanisms into the workplace to discover and address issues with supervisory error
  • Providing an adjudicatory process – when needed – other than public litigation

There are a variety of ways that the benefits of early detection of workplace problems may be accomplished.  One is the establishment of the office of organizational ombudsman.  Such an office is a resource to all members of the workforce, including managers and supervisors, and points inquirers to routes for solutions in a confidential atmosphere.  The ombudsman office is not part of Human Resources or the Legal Department, and is answerable directly to the office of the president of the organization.

This is an area in which responsible innovation may reap substantial rewards.  One program administrator, when asked what types of issues the program would address, replied that he would discuss with an employee concerns about the patterns of the linoleum on the floor, on the assumption that if the employee voiced concern about that, she had a broader concern about something else, and unless he heard about it now he ran the risk of hearing about in later, in the form of a legal filing.

The underlying premise is broadly shared:  Allocation of institutional resources to identify problems at an early stage is the most effective way of preventing later, more expensive claims or disruptive incidents in the workplace.[14]

Conclusory Observations

At the time the Compendium was compiled, not all participating companies maintained statistical reports of trends of usage, outcomes and user satisfaction levels.  Moreover, many of these programs no longer are in operation, either because of corporate restructuring, program modification, or other reasons.

Nevertheless, certain of the observations drawn in 2002 may still be useful for program designers today.  Among the most prominent are:

  1. Nearly all disputes submitted to systemic employment dispute resolution programs are resolved by agreement, and very few go to arbitration. Halliburton and Johnson & Johnson reported that fewer than 2% if disputes entering their programs proceeded to the arbitration stage.  General Electric reported only one arbitration in the 1998/99 period.  Shell reported fewer than 1% of the matters entering its program were arbitrated.[15]
  2. A good mediator can be hard to find. Though the market has likely changed in the 15 intervening years, as of 2002 many program administrators reported that few mediators had a background in employment law and few employment lawyers were trained in mediator skills.
  3. Many employees are skeptical of company-promulgated employment programs. Many of the administrators were confident of the fairness and efficacy of their programs, but spent a great deal of time trying to convince employees to use it.[16]  High employee satisfaction rates reported by those who did use the program seemed to have little effect on others’ usage.
  4. Reactive response, rather than proactive identification, still predominates management thinking. All programs were designed to respond to employee-initiated complaints and concerns.  None was designed to seek out the sources of employee dissatisfaction and prevent such concerns from arising in the first place.  Reactive policies have inherent limitations as managerial tools.
  5. The program does not result in increased employee complaints. None of the program administrators reported any change in the rate of voiced concerns in the workplace.  The concern that an institutionalized dispute management system might encourage or invite dispute reportage turned out to be a canard, with no data backing it up
  6. Cultural and legal assumptions persist. Employers in the United States approach employee conflicts from the assumption that employment is “at will” and the relationship can be terminated for any non-discriminatory reason.  By contrast, employees approach workplace conflicts in the context of a matrix of “rights” that legislatively express social values and give rise to legal causes of action.  In a given dispute, neither party has reason to reframe their vocabulary to articulate underlying interests.  The “rights” rhetoric of workplace conflict is pervasive and undeniable; rights-vindication is frequently the reason the problem is being pressed.
  7. The unavoidable still needs to be adjudicated. Despite the indications that efficiency derives from reallocating institutional resources from the back-end of a dispute to the less expensive front-end, it does not follow that all disputes will be resolved at the front-end and none will require adjudication.  The success of these programs does not imply that arbitration or litigation will one day be obsolete.  Rather, these programs address the many organizational benefits of resolving concerns at a very early stage, reserving costly adjudicatory processes for the very few instances where it is needed.

 

[1] F. Peter Phillips is a mediator and arbitrator in Montclair, New Jersey, USA.  His professional website is www.BusinessConflictManagement.com.  He is Adjunct Professor and Director of the ADR Skills Program at New York Law School.

[2] Now the International Institute for Conflict Prevention and Resolution.  See www.cpradr.org.

[3] CPR Institute for Dispute Resolution, How Companies Manage Employment Disputes: A Compendium of Leading Corporate Employment Programs (2002).

[4] The companies whose programs were included in the Compendium were Alcoa, Anheuser-Busch Companies Inc., Bank of America, CIGNA, Credit Suisse First Boston, General Electric, Halliburton Company, Johnson & Johnson, Masco, McGraw Hill, MG Company, Pfizer, Philip Morris USA, Rockwell, Shell, Texaco, United Parcel Services, UBS Paine Webber, U.S. Air Force and U.S. Postal Service.  The programs included were those in effect in 2002.

 

[5] The Compilation included interviews with Richard R. Ross, Senior Associate General Counsel, Anheuser-Busch Companies, Inc.; Donna M. Malin, Assistant General Counsel, Johnson & Johnson; Wilbur Hicks, Shell Oil Company; Geoffrey Drucker, Chief Counsel, Dispute Resolution and Prevention, U.S. Postal Service; Teri P. McClure, Corporate Counsel – Employment, United Parcel Service; and Elizabeth W. Millard, Director and Counsel, Credit Suisse First Boston.

[6] Richard R. Ross of Anheuser-Busch Companies stated in his interview, “We saw the Dispute Resolution Program as a means to not only provide [a dispute resolution] avenue for employees, but also encourage better management practices.”

[7] Geoffrey Drucker, administrator of the REDRESS program at the U.S. Postal Service, said in his interview that, although “the settlement of the class action [in a Florida lawsuit] was the immediate impetus, behind that was a concern about this rise in complaints and a desire to do something about it.”

[8] Elizabeth W. Millard of Credit Suisse First Boston said in her interview that to some degree the company “saw a dispute resolution program as a way of promoting management accountability, because it can demonstrate to managers that, if they make inappropriate decisions, the company will take employees’ complaints seriously, and support the employees’ efforts to seek redress.”

[9] Donna M. Malin of Johnson & Johnson said in her interview that the primary metrics her office maintained were the number of employee-related lawsuits and the expense of outside counsel.  A secondary metric was the time from assertion of the complaint to resolution.  Teri P. McClure of United Parcel Service stated in her interview that “[t[he main reason UPS started looking at alternative dispute resolution is because the largest percentage of our legal department budget was spent on labor and employment related matters.  We were looking for ways to reduce costs with respect to labor and employment-related litigation.”

[10] Geoffrey Drucker of the U.S. Postal Service notes that the metric chosen has a relationship to the program goal.  In his interview he said that the primary purpose of the program was “to improve the workplace environment,” and the program valued information on user satisfaction higher than rates of resolution.  “[W]e’re getting about 40% success rate in terms of resolution.  And levels of satisfaction with the process are [in the high 90s].”

[11] Wilbur Hicks, who administered the Shell RESOLVE program, said in his interview that the CEO of Shell specifically abjured metrics as a means of evaluating program success.  “[H]ow do you measure that – people feeling that they have more of a stake in what happens to them in the workplace?  In fact, Phil [Carroll, Shell’s President at the time of the program’s adoption,] would probably say, ‘Gee, if the number of complaints went down, that’s not what I want – I want the number of complaints to increase.  I really want people to feel safe bringing forth these issues.”  In fact, complaints did not increase.

[12] Elizabeth Millard of Credit Suisse First Boston articulated, in her interview, the rationale behind designing that company’s program to “cover[] everything as well as everyone”:  “I think some companies have decided that they are better off in court with some types of claims – bonus claims, for example.  Whether or not that is true is not an issue for us.  We are committed to the principle of alternative dispute resolution for employment-related claims.  And if employment ADR is a good thing, then its benefits should be made available as to all types of claims.”

[13] Richard Ross of Anheuser-Busch Companies stated in his interview, “The only reason this worked was that we had the full support of senior management, including the CEO.”  Teri McClure of United Parcel Service said that, “as part of the rollout, we used a videotape that included our CEO and our senior VP of HR, telling people that this program was something that the company takes very seriously.”

[14] Wilbur Hicks, of Shell, said in his interview, “We’re getting these things earlier in the process, when the emotions haven’t ratcheted up.  Big lawsuits drag on and on and people perceive that the company is resisting and holding out and they become more and more angry, so the price of resolving it goes higher and higher.”

[15] The overall theme was voiced by Elizabeth Millard of Credit Suisse First Boston in her interview: “I think the information is reliable, and that it convincingly demonstrates that, as a result of the program’s being in place, disputes are resolved sooner and at a lower cost in terms of legal fees and other transaction costs.”

[16] Teri McClure of United Parcel Service said in her interview: “I can’t emphasize it enough – the senior management buy-in and the marketing, the on-going marketing of the program.”

 


Party Autonomy: "Something They Teach at Pepperdine"?

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A group of sharp and experienced thinkers on the mediation process offered a panel at the recent ABA Dispute Resolution Section meeting in New York before a packed crowd of just-as-sharp practitioners on the topic “Reevaluating the Role of Autonomy in ADR.”  The discussion was led by an ever-patient and always-perceptive Hiro Aragaki of Loyola Law School, and questioned whether party self-determination — often extolled as a primary virtue in ADR and, indeed, Standard I in the ABA/AAA/ACR Model Standards of Conduct for Mediators — is actually a comforting myth.  Prof. Aragaki opened the session with an anecdote about an exchange he experienced where the other discussant eventually threw up his hands in exasperation and said, “Autonomy?  That’s just something they teach at Pepperdine!”

It got a good laugh.  But as the hour went on, it became increasingly clear that party autonomy may, in fact, not exist in the real world of mediation — not ever.

One common example of incomplete party autonomy arises from the disconnect (whether intentional or not) between a party and her representative.  The lawyer, seeing the matter through the lens of damages and contingent fees, may be seeking back-pay while the client might be seeking reinstatement.  Who is the mediator to listen to, and is it the mediator’s job to mediate between them in the first place?  Moreover, if the client were purely autonomous, the lawyer wouldn’t be needed, right?

Another speaker distinguished between self-determination as an attribute (a political or social perspective, as in “this person is a voter”) and as a capacity (a medical, psychological or educational perspective, as in “this person needs assistance to perform daily tasks”).  Does the person sitting in that chair actually possess the capacity to make optimal decisions on her own behalf?  Indeed, isn’t her own uncertainty on that score the very reason she hired a lawyer?  And, one layer up, the reason they sought intervention by a mediator?

Indeed, the whole idea seems to make most sense when applied to people who have control of a situation.  One speaker proposed that powerful white men are among the few who feel comfortable discussing party autonomy — because they are among the few who might actually possess it!  May a woman in 1950 be said to have self-determination?  Or, indeed, a woman today?  Does an employee who needs the job have autonomy in negotiating its terms compared to an employer who merely needs the job filled by someone?  As Anatole France said, does mediation, “in its majestic equality, mean that the rich, as well as the poor, are forbidden to sleep under bridges, to beg in the street, and to steal bread?”

Jennifer Reynolds acts as Ombuds for the University of Oregon, and is accustomed to dealing with individuals who are uncertain as to the appropriate structural, procedural or substantive context in which their concerns may be voiced.  Indeed, their confusion is what prompts them to call the Ombuds office.  Does lack of clarity on what you want and whom you want if from amount, in practice, to lack of autonomy?  When one party to a divorce is financially dependent on the other, may each party be said to be autonomous?  Same goes for employment disputes: As one speaker put it, “Getting fired is pretty disempowering.”

The attendees left with a more nuanced and more useful understanding of the principle of “party autonomy,” which released us as neutral facilitators.  When we find ourselves trying to solve a conflict, we all are disadvantaged to some degree.  We all are interdependent; what we decide in a mediation room will have an impact on people other than those who are present. None of us acts in a vacuum and none of us has perfect parity in either factual knowledge or negotiation skills.

Instead we might, as students and practitioners of the facilitative process, hope merely to provide help that a party did not otherwise have.  We might seek to experiment; we might even hope that the exchange is, to some degree, transformative to the troubled or broken relationship.  But to posit that the people in front of us are autonomous is simply delusional.

New ABA Mediator Ethics Opinion

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In a previous post I noted the work of the ABA Dispute Resolution Section’s Committee on Mediator Ethical Guidance, which interprets the Model Standards of Conduct for Mediators (promulgated in 2005 by the ABA, AAA and ACR).  In that same post, I noted the frequent close correlation between ethical lapses and raw stupidity.

Well, we’ve got another one.

The Committee recently published an opinion that addresses the conduct of a mediator who posted the following on his Facebook page:

Whew!  Just settled my first Superior Court civil mediation.  A case involving a non-English speaking elderly client, who really really didn’t want to have to go through trial.  Possible jury verdict could have been zilch to around $80k.  I got her $50k.

The Committee’s formal opinion noted that the public Facebook post “would not be proper unless the mediator had the consent of all parties.”  I’ll say!

(See, that’s why I wouldn’t do well on Committees like this.  Lack the tact.)

Two grounds were cited in support of the Committee’s analysis.  First, Standard II(B), requiring impartiality, was violated by the mediator’s apparent sole concern on “getting” the plaintiff benefits.  Second, the Facebook post violated two subsections of Standard V (confidentiality) inasmuch as (a) it disclosed facts about participants in, and the outcome of, a confidential mediation and (b) it revealed the plaintiff’s sentiments concerning trial, which were presumably communicated during private session.

This is all very well.  But neither of these lapses sent me off my chair.  The one that jumped out at me was the sentence, “I got her $50k.”

My friend, you “got her” nothing.  One party offered, and the other party accepted, $50,000.  And you didn’t “settle the case” — they did.  It wasn’t “your” case, and it wasn’t “your” mediation — it was theirs.

This conflation of the mediator’s value with the occurrence of settlement during or soon after mediation is too frequent among folks who really should know better.  The case you’re mediating will certainly terminate prior to trial, for one reason or the other, and the fact that it settles during mediation doesn’t mean that “the mediator settled it.”

We often cite the statistic of the teeny number of filed civil cases that are disposed at trial (in federal district courts, 1.1%) in support of the importance of mediators’ contributions to those dispositions.  But what that statistic really shows is that parties usually settle litigated cases prior to trial. It doesn’t show that mediators settle cases that would not otherwise settle in the mediator’s absence.

I accept that mediation (not mediators) frequently prompts parties to consider settlement at an earlier stage than they might in the absence of mediation (though that’s hard to measure).  And I take it as an article of faith that good mediators are more effective than unskilled mediators in facilitating early settlement (though I have never seen reliable statistics on that, either).   But I am skeptical of the notion that a case that was not ripe for settlement nevertheless settled because of the mediator’s efforts.  And I reject utterly the idea that a mediator “settles cases.”

I don’t know whether I’m asking for professional humility or a simple reality check.  I do hope we remember that when we do our job, we don’t settle cases.  We help the parties to do so, if they conclude that it is in their interest to do so.  And when it happens the credit belongs to them, not to us.

With statistics like the ones cited above, we may as well take credit when water runs downhill.

Arbitration Primer for Litigators

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The Dispute Resolution Section of the New York State Bar Association, under the Chairmanship of David C. Singer, has published a dandy 23-page booklet to introduce lawyers accustomed to the courtroom to the intricacies and nuances of representing a client in arbitration.  as the Introduction notes:

It is a common misconception among litigation attorneys that any attorney who has represented a client in court is completely prepared to represent a client in domestic arbitration.  [In fact] the differences between these processes are significant, and could easily prove to be traps for the unwary.

Brief and pithy essays are then provided by some of the leading lights of arbitration practice:  Peter Michaelson on selecting arbitrators, Paul Bennett Marrow on issues of arbitrability, Barbara Mentz on conducing a preliminary conference, John Wilkinson and discovery, Geri S. Krauss on conducting evidentiary hearings, and so on.

This is exactly the kind of service that a bar association’s ADR section should be rendering to its fellow attorneys.  Its brevity is very welcome.  Its utility is, as it states, to alert litigators out of their slumber and prompt them to hone skills that are uniquely suited to the curious forum that is private arbitration.

In his book Hooray for Yiddish! Leo Rosten defines a mitzve as a kind, considerate deed that reflects the will of the divine.  His illustration is a policeman who, in persuading a despondent man not to drown himself in the Sea of Galilee, pleads with him: “If you jump I will have to go in after you.  I can’t swim.  I have a wife and two children.  Don’t be so selfish!  Perform a real mitzve.  Go home, and in the peace and comfort of your own home, hang yourself.”

In this spirit I urge upon the reader that buying about 50 copies of this pamphlet and distributing one to every litigator you know would be “a real mitzve.”

Early Call for DR Section Proposals

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The ABA Section of Dispute Resolution has announced that proposals for programming for the 2017 Spring Meeting (scheduled for San Francisco April 20-23 2017) are due by Wednesday, August 3, 2016.

This annual event is one of the wonderful ADR-related events of the year, and San Francisco of course among the most delightful cities in the world.  Gina Brown of the ABA notes: “A PDF of the proposal form is available on the Conference RFP web site, http://www.americanbar.org/groups/dispute_resolution/events_cle/annual/conf_rfp.html for preparation and planning purposes. All proposals must be submitted through the online proposal form.”

Screw on your thinking caps, colleagues.  I can’t wait to ttend your programs in San Francisco.

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David Hoffman Inspires Us Again

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David Hoffman‘s capacity to lead by inspiration is unparalleled.  When you attend a program or lecture by David, you feel as if he’s talking to you over a table, sharing stuff that matters to him in the hope that it will matter to you, too.

David recently gave a TEDx Talk in Northern Illinois University, and happily it is posted at YouTube.  It’s titled Lawyers as Peacemakers.  Really?!? Yes, Really!  His talk, couched as a summary professional memoir, is actually a testimony to the core impulse of dispute resolution — the desire to help parties to resolve the conflicts that burden them.

David is the only one of my heroes who regularly cries when he tells stories.  He cries in this TED Talk, too.  I attribute this proclivity not to David’s tendency to be emotionally labile, but to reflect his practice of entering the very beating human pulse of conflict.  He moves easily from a war story of a family conflict to the teachings of two Buddhist priests.  This is because David’s approach to his work is as transparent and committed as his approach to his life.  He seeks to live in a way that reduces the conflict that surrounds us — whether or not he is in a formal mediation.  The way he thinks, is the way he lives, is the way he works, is the way he talks, is the way he thinks.

It is no surprise, then, that David cites Gandhi in his talk, urging us to “be the change you want to see in the world.”  In the talk he “announces” that, as of that day, he will forthwith be a lawyer who is a “full-time peacemaker,” and “just say no” to litigation as part of his practice.  He sees the role of a lawyer as assisting parties to heal their rifts.

David Hoffman as peacemaker.  Really, David?!? Yes, Really!

CPR’s Third Volume on Employment ADR

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Last year the International Institute of Conflict Prevention and Resolution (“CPR”) published a new volume, Cutting Edge Advances in Resolving Workplace Disputes. It is a fine book, an deserves to be a steady reference to practitioners and systems designers in the field.

The book is a joint publication of CPR and Cornell’s Scheinman Institute, and reflects the leadership of Jay W. Waks, Chair of the CPR Employment Disputes Committee, and Nancy L. Vanderlip, former senior counsel to several corporations and Chair of the Subcommittee charged with the project. It is a compendium of essays contributed by members of the Committee, each a contribution to the thought-leadership at which CPR is unparalleled.

David Lipsky of Cornell writes an overview of how corporations use ADR in employment, presenting useful findings from corporate surveys conducted in 1997, 2011, and 2013. He concludes that a growing number of companies rely on ADR as their principle approach to employment disputes, embracing a wide array of ADR techniques. In a subsequent chapter Lipsky focuses on the evolution of Integrated Conflict Management Systems and notes intrinsic organizational obstacles to their adoption, independent of their benefit.

Judy Cohen offers a chapter on approaches to stakeholder engagement in developing and nurturing such systems, including examples of companies’ roll-out materials and online resource centers. In that theme, Michael J. Wolf offers an approach to the use of online tools in service of workplace dispute identification and resolution. These range from web conferencing to sophisticated online dispute resolution platforms.

Employee hotlines are the subject of Stephanie Morse-Shamosh‘s chapter, which itemizes the many considerations in determining a hot;line’s function, attributes and trustworthiness. Mary Rowe and Randy Williams write on the practice — still too infrequent, in the view of many observers — of the organizational ombudsman.

Finally, Cynthia S. Mazur introduces a practice to which I have not previously given enough thought — the skills of a “conflict coach” in service of the goal of preventing, rather than resolving, conflicts that too often — and in her view unnecessarily — absorb institutional resources through formal mediation or arbitration.

While I served as Executive Vice President and Interim President of CPR, the Institute published two books in this area: What Jay Waks in his introduction calls the Fat Book and the Skinny Book. This newest publication is perhaps the Goldilocks Book — just right!

 

 

The New York City Convening of the Global Pound Conference: September 12, 2016

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The Global Pound Conference is a series of convenings of ADR practitioners, end-users, teachers and students around the world. Its goal is to assess the current state of Alternative Dispute Resolution and to point the direction for its continued advancement.

GPC events have taken place at, or or planned for, London, Singapore, Lagos, Mexico City, and many other places around the world. New York City’s conference will be held at Cardozo Law School on Monday September 12, 20-16.

More information on the Global Pound Conference may be found here. Information on the New York event is found here.

It’s difficult to imagine a more exciting, broader, and more comprehensive event in our field. All in New York City should of course be there on September 12, and others are encouraged to find a gather in near you and take part in this extraordinary happening.


“Procedural” Apology

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Richard Nixon was responsible for many teaching moments. One of my favorites is the advance in American appreciation of the difference between the passive voice (“Mistakes were made”) and the active voice (“I made mistakes”) that was offered by his press secretary, and echoed by other presidents.

A recent paper by an accomplished New York Law School student presents a similarly tantalizing distinction — the difference between saying “I’m sorry for what I did” and “I’m sorry for the trouble caused.”

Ayana Osada studied the long dispute between Suzuki and Volkswagen, and analyzed part of the problem through the lens of differing cultures and ensuing miscommunication. Suzuki, as a leading figure in distinctly Japanese industry, was offending by VW’s failure to respond to Suzuki’s request for a “procedural apology.” What that term means, and the ramifications of not knowing what it means, are parts of a fascinating tale.

Here is a section of Ms. Osada’s paper addressing the provocative topic. In extracting this section, the footnote numbering has been disrupted and internal references within certain of the footnotes are no longer accurate.

(This excerpt appears with Ms. Osada’s permission. She is spending the summer at the New York and Tokyo offices of Paul, Weiss, Rifkind, Wharton & Garrison.)

* * * *

Culture of Respect and Apology

Culture is an all-encompassing word; it is easy to blame cultural differences for a host of ADR related problems. However, in the context of ADR with Japanese parties, focus should be on respect and apology because together, they are the essence of dispute resolution in Japan. They explain why separating substance and procedure is helpful and why procedural apology can cure miscommunication and misunderstanding, which are common in cross-border ADR.

For example, when Suzuki demanded an apology from VW and none was forthcoming, it negatively affected their already failing relationship because Suzuki valued this incident far more than VW did. It was missed opportunity because they could have used procedural apology to repair or contain the damage. “We apologize for addressing you without due respect. It was a misunderstanding and miscommunication due to language differences. We are sincerely sorry.” This statement would have sufficed.

From Japanese party’s point of view, demanding an apology is an olive branch extended to the other party. Unfortunately, VW did not recognize it as such. Or perhaps, VW intentionally ignored Suzuki’s demand after doing analysis and calculation. From Japanese perspective, Suzuki was likely not asking VW to admit substantive guilt or liability; Suzuki was attempting to restore their working relationship procedurally.

As Professor Lee describes, this situation is an “example of how law or lawlessness is culturally constructed, and whether the question is not one of law, however defined, but of the local legal culture.”[1] In Japan, which is over 2,000 years old and is a civil law system unlike the United States, parties place as much emphasis on what is respectful and respectable procedurally as they do on what is legal and reasonable substantively.[2] How can parties engaging with Japanese parties in ADR separate substance and procedure to achieve success?

I am Sorry for the Trouble Caused

In Japanese, “gomeiwaku wo kakete moushiwake arimasen” is a well-used phrase between business partners, friends, families, and in virtually all other relationships. Directly translated, it means: I am sorry for the trouble caused.

The phrase is intentionally vague and lacks basic information such as who, what, whom, and why. This phrase may be issued in a press release by a corporation or a politician. It can be used in ADR regarding family disputes, real estate disputes, neighbor disputes, multi-million dollar commercial disputes, and any other disputes.

“Gomeiwaku” means trouble, problem, headache, additional work, wasted work, offense, disrespect, and anything else, which the injured party may resent. The phrase addresses the injured party’s need for apology because that is how the injured party feels. It is purposely vague because details do not matter as much as the fact that apology is given regardless of who did what to whom for what reason. Employees may say this phrase to apologize and bow deeply before television cameras on behalf of their company for producing a defective product. A politician may say this phrase to apologize to his constituents before resigning over a sex scandal. Legal consequences aside, it is perceived as show of respect.

The “trouble caused” can be a specific incident, injury to someone, or general mistrust of a company. Whatever it is, procedural apology expresses contrition and desire to take responsibility without admitting substantive guilt or liability. Here, substance and procedure have been separated with procedural apology. It has not solved the substantive issue such as recalling defective products and paying damages. However, it has begun to restore respect and trust between parties, which are necessary in any successful relationship.

Demanding Apology and Refusing to Apologize

To restore respect and trust between Suzuki and VW, how could procedural apology have benefited VW? Similarly, how could understanding why VW may not apologize have benefited Suzuki?

During their arbitration, both international and Japanese media reported that Osamu Suzuki, the 80-plus year old Chairman of Suzuki, was offended by VW because of the way Suzuki was treated; he felt that VW viewed Suzuki as inferior to VW.[3] In May 2011, when Mr. Suzuki accused VW of disrespecting Suzuki by calling it VW’s “associate” rather than partner in VW’s annual report, VW could have apologized to save Mr. Suzuki’s face but it did not.[4] On another occasion, VW representatives told Suzuki representatives: “If you become a development center, the VW Group will rely on Suzuki, and our fate will be shared[…] Although it is not that we don’t trust you, we don’t know what will happen in the future. The future may bring concerns that you will be controlled by another company.”[5] While VW may have made the statement with no intention of offending Suzuki, Suzuki was reportedly offended because it implied that Suzuki was incompetent, unreliable, and unpredictable.[6]

When there is miscommunication or misunderstanding, what can be done to remedy the problem? If Mr. Suzuki was offended, it may have been in VW’s long term interest to apologize: “Please forgive us, Mr. Suzuki, if we have offended you or your team. Communicating in English, which is our second or third language, can be challenging. If we misspoke, we are deeply sorry.”

Generally, can such procedural, conciliatory, and vague apology resolve substantive issues? Probably not. However, at least for Japanese parties, such apology would go a long way towards building a relationship. It is an indication that past and future miscommunication or misunderstanding may be unintentional because good faith effort was made to show respect.

On the other hand, European and American parties may believe that such procedural apology is not only confusing but also distracting and even insincere. If apology is procedural, substantive issues and “the real problems” are not being addressed. Apology for the sake of formality may confuse the situation and complicate the matter. This may be the thinking of an American corporation, who hesitates to issue an apology after apology is demanded by a Japanese corporation. Because apology means different things in different cultures, it may be undervalued to the detriment of both parties, who miss an opportunity to nip a problem in the bud.

Power of Apology

To varying degrees, apology is valued universally and has been accepted as effective tool in ADR in multiple countries. By 1986, “apology legislation,” which legalizes use of apology as legal remedy, had been introduced in 56 jurisdictions including the United States, United Kingdom, Australia, and Canada to settle a variety of conflicts, including business disputes, family disputes, sexual assault charges on college campuses, and international war crime tribunals.[7] However, fear that apology can be construed as admission of guilt or liability remains in the United States.[8]

It is this strategic thinking, based on which one abstains from apologizing, which offends Japanese parties even more because it indicates that strategy rather than respect is controlling. It is especially disrespectful, the offended Japanese party may conclude, that apology is not forthcoming. The American strategy of rational thinking and self-preservation can be described as “kakehiki” in Japanese. Although kakehiki is just as valuable and inevitable in business in Japan as it is in the United States, it is not necessarily honorable in Japanese psyche. Kakehiki endorses hedging bets and calculating what is most advantageous at the expense of more honorable values such as respect. In contrast, formal apology shows respect, honor, and courage.

Therefore, when problems arise in ADR and apology is demanded, withholding it can be devastating. Parties can end up with more problems than when they started the ADR. This is where procedural apology can be effective because it can cure potentially serious relationship problems quickly without addressing substantive issues so the parties can return to solving the substantive issues.

Crowded Society and Apology

Japan and the United States can be at the opposite ends of the spectrum regarding use of apology. Scholars including Professor Lee have studied “the U.S.­–Japan axis” and explain that Japanese cultural norms, which value respect, community, and harmony, cause them to apologize more readily, when “one’s actions have resulted in the significant injury of another[.]”[9] In contrast, the U.S. inclination is to refrain from apologizing or to deny responsibility in the very same situation.[10]

One relevant factor is geography; Japan is ten times more crowded than the United States. Most Japanese communities are highly populated, in which people must work and live together in harmony for survival. Japan’s population was 127.1 million in 2014 and its surface area was 377,962 square kilometers while the U.S. population was 318.9 million and its surface area was 9,831,510 square kilometers.[11] Comparing their “population density,” which is “people per square kilometer of land area,” the U.S. density was 34.9 while Japanese density was 348.7.[12] The United States is roughly 26 times the size of Japan but Japan’s population is nearly 40% of the U.S. population.[13] Japan is a country, in which the equivalent of almost 40% the U.S. population lives.[14] Yet Japan is “slightly smaller than California.”[15]

Living in a crowded country helps explain why Japanese people value harmony, respect, and keeping face, and why they appreciate apology as show of respect. Avoiding confrontation resolves disputes and conflicts efficiently in Japan because when everyone lives and works in close quarters, parties cannot escape from one another. Confrontation, escalation, and disorder, cannot be permitted in crowded communities because dissenters cannot simply move out west, where there is plenty of land and few people. In Japan, there is little unclaimed land and wilderness. In such crowded communities, independence, individuality, and respectful disagreement, which are valued in U.S. communities, are subordinated. In Japan, it is often easier, more efficient, and ultimately beneficial to everyone, to apologize. Strategizing and avoiding admission of guilt or liability would likely aggravate the matter. Therefore, lack of apology, when it is expected, is that much more devastating to Japanese parties.

Law and ADR that Reflect Host Culture

Law and ADR systems generally reflect each country’s “societal inclination or disinclination to apologize.”[16] In Japan, legal institutions have reinforced societal use of the apology and integrated it into the country’s justice system. To resolve conflicts quickly and to have finality, Japanese courts regularly demand apology from parties. Professor Lee explains: “The culture of Japan is such that all of society, including the bench and bar, expects and demands an apology from a party causing harm or injury to another.”[17]

In the United States, apology is not typically a part of civil or criminal court proceedings. Courts can ask parties to apologize. However, even in ADR, apology may not be mandatory because “the societal inclination not to apologize in the U.S. setting is matched (and perhaps shaped) by a legal culture that advises clients not to issue an apology for fear that it may be used against the apologizer as an admission of legal liability.”[18] Therefore, apology is not given high “legal priority” and “legal doctrine based on apology” is not as well developed in the United States.[19]

“You Should Know Better”: High Context v. Low Context

To convey that a person is better than his or her own misguided conduct, expression, “you should know better,” is used in the United States and in Japan. However, the Japanese version implies this notion: “You lack common sense that all of us in this community unquestionably share, which means that you are showing disrespect.” Assuming that everyone shares the same common sense is a mistake, which Japanese parties can make due to geographical and cultural conditioning.

The reason Suzuki was offended by VW may have been that Suzuki assumed that VW should know better. VW must know that it should not call Suzuki an associate because they are equal partners, Suzuki assumed. It may not occur to Suzuki that VW representatives simply misspoke or misused some words. Suzuki assumed that VW knew better and yet, VW called them an associate rather than partner. Therefore, Suzuki was offended. Similarly, Suzuki likely assumed that VW knew or should have known that VW must apologize; it is common sense. Yet VW refused to apologize. Therefore, Suzuki was further offended.

“Joshiki shirazu,” meaning “lacking common sense,” is an expression used to describe conduct that is frowned upon in Japan. In a small and crowded island country with long history of interdependent agricultural communities and limited immigrant population such as Japan, common sense enables collective survival.

In contrast, in a large country made up of immigrants with frontier spirit, where multiracial, multi-ethnic and multi-religion communities coexist, such as the United States, common sense and assumptions are not dependable. Instead, freedom, pluralism, and tolerance for those who disagree with us, are valued. Many Americans living in large cities such as New York City, especially, do not assume that our neighbors, coworkers, and business partners, share the same customs and common sense. People in diverse communities must keep an open mind to learn from each other; we learn by compromising and communicating. Therefore, people are not so easily offended if there is misunderstanding or miscommunication.

In Japan, however, people are conditioned to assume that everyone shares the collective common sense, rendering disregard for common sense particularly disrespectful. Refusing to apologize can be offensive to many Japanese parties, when it may be dismissed as harmless by many Americans, who are conditioned to expect that people from different cultures have different customs.

[1] Ilhyung Lee, Introducing Int’l Com. Arb. and Its Lawlessness, By Way of the Dissenting Opinion, 4(1) Contemp. Asia Arb. J. 19, 27 (May 31, 2011), http://ssrn.com/abstract=1867886.

[2] Introduction to Japan’s Legal System, Library of congress, http://www.loc.gov/law/help/legal-research-guide/japan.php (last visited May 22, 2016).

[3] Anna Mukai, Suzuki Starts Arb. with Volkswagen to Buy Back Shares, BLOOMBERGBUSINESS (NOV. 24, 2011), www.bloomberg.com/news/articles/2011-11-24/suzuki-starts-arbitration-with-volkswagen; Hans Greimel, How the VW-Suzuki Alliance Went Wrong, AUTOMOTIVE NEWS (Aug. 3, 2015), http://www.autonews.com/article/20150803/OEM/308039944/how-the-vw-suzuki-alliance-went-wrong.

[4] Mukai, supra note 11; Greimel, supra note 11.

[5] Mukai, supra note 11; Greimel, supra note 11.

[6] Mukai, supra note 11; Greimel, supra note 11.

[7] Robyn Carroll et. al., Apology Legis. and its Implications for Int’l Disp. Resol., 2015-9 UWA FACULTY OF LAW RESEARCH PAPER 115–117 (2015), http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2677033.

[8] Id.

[9] The Law and Culture of the Apology, supra note 8 at 2.

[10] Id.

[11] World Dev. Indicators: Japan, The World Bank, http://databank.worldbank.org/data/reports.aspx?source=2&country=JPN&series=&period= (last visited May 22, 2016); World Dev. Indicators: United States, The World Bank, http://databank.worldbank.org/data/reports.aspx?source=2&country=USA&series=&period= (last visited May 22, 2016).

[12] World Dev. Indicators: Japan, supra note 19; World Dev. Indicators: United State., supra note 19.

[13] World Dev. Indicators: Japan, supra note 19; World Dev. Indicators: United State., supra note 19.

[14] World Dev. Indicators: Japan, supra note 19; World Dev. Indicators: United State., supra note 19.

[15] The World Factbook, Central Intelligence Agency, https://www.cia.gov/library/publications/the-world-factbook/fields/2023.html (last visited May 2, 2016).

[16] The Law and Culture of the Apology, supra note 8 at 2.

[17] Id.

[18] Id.

[19] Id.

[20] The Law and Culture of the Apology, supra note 8 at 10.

[21] Id.

[22] Id.

[23] Id.

[24] Id.

New Book on Business ADR

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The ABA Business Law Section has about 50 substantive committees, many of which include subcommittees addressing dispute resolution in their field.  In the past several months, many members of these various entities undertook a collaborative effort to “cut across the solos.” The result is a unique  new volume titled ADR Deskbook for the Business Lawyer: A Cross-Disciplinary Workbook.

An introduction by immediate past ABA President Paulette Brown sets the tone by encouraging the increased use of “forms of mediation and arbitration that return us to the essential, direct and straightforward way of helping clients do business efficiently.”  Chapters include studies of dispute resolution methods in employment (Hugh Christie and Joe Semo), Bankruptcy and Restructuring (Timothy Bow, Howard Brownstein, Jerry Markowitz and Scott Stuart), Mergers and Acquisitions (John Levitske and Steve Knee), Family Business Divorce (Steve Knee), IP (Kristine Dorrain, Sandra Partridge and Ryan Isenberg), Public Infrastructure Projects (Deborah Mastin), Futures and Derivatives (William Nissen and Louis Burke); Sports (Richard Pound); and proceedings under the innovative Delaware Rapid Arbitration Act. (Blake Rohrbacher).

Authoritative legal associations such as the American Bar Association often attract gifted minds that too seldom confer with each other.  I was honored to be trusted by these terrific authors to edit and contribute to this book, and hope that future editions include chapters from more and more fields of business law.

ABA Business Law Meeting Features CFPB Panels

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The upcoming Annual Meeting of the ABA Business Law Section in Boston (Sept. 8-10) features two opportunities to understand the various perspectives on recently promulgated proposed rules of the Consumer Financial Protection Bureau.  The rules, if they become effective, would (among other things) render unenforceable provisions of consumer agreements that purport to waive a right to assert claims as part of a class.  The discourse that the Bureau’s promulgation has prompted implicates concerns in public policy, arbitration, consumer redress and class actions.

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One panel will be held at 10:30 a.m. Friday September 9, and I have the privilege of moderating the discussion.  Doug Eyre, Associate General Counsel of Flagstar Bank, will address the risk that CFPB’s proposals might pose to substantive review of arbitration awards.  Eric Mogilnicki of Covington & Burling will outline some challenges that the proposed rule might face and issues arising with respect to class actions asserted or pending prior to the effectiveness of the rule.  Mike Flynn of Goodwin Procter will voice concerns about the consequences of the possible abuse of the class action process.

We are particularly honored that the Chair of the ABA Dispute Resolution Section, Nancy Welsh, will travel to the Business Law Section to convey that Section’s concerns about the impact that class action waiver and other current practices have on the integrity of the arbitration processes.  Finally, Amy Schmitz of the University of Missouri will offer a preview of her upcoming book — co-authored by Colin Rule — suggesting that as consumer transaction activities increasingly rely on online communications, so will consumer satisfaction efforts, including consumer dispute resolution.  This panel is sponsored by the Dispute Resolution Committee and co-sponsored by the Consumer Financial Services Committee and the Business and Commercial Litigation Committee.

The second panel will be offered on Thursday September 8 at 3:30 p.m.  Sponsored by the Consumer Financial Services Committee, the panel is chaired by renowned attorney Alan S. Kaplinksy and is titled “Arbitration: The CFPB’s Proposed Rule and Beyond.”

Boiling Down Consumer Arbitration

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By now I’ve attended or participated in quite a few task forces, speeches, conference panels and other occasions in which the issue of class action waivers in consumer arbitration clauses has been discussed.  Just about each time, just about each speaker has been either smarter or better informed than I am — often both.  Two more events are on the horizon:  at the ABA Business Law Section Annual Meeting and at a CLE at New York Law School, where I teach.  And perhaps it is an indication of my learning — or my not learning enough — that the kernel of the concern reduces itself to a few very simple propositions:

Arbitration Derives its Authority From Informed Consent.  Just like Thomas Jefferson said about governments, arbitrators’ power is created and confined by the agreement of the parties.  Folks who didn’t agree that an arbitrator should decide a particular dispute are not required to arbitrate that dispute.  Almost without exception, “consumer arbitration” involves parties who didn’t agree to arbitrate, and didn’t even understand what agreeing to arbitrate means.

Class Actions Are Experienced as a Form of Threat, Not Redress.  The AT&T dispute mechanism clause is a good example of a perfectly suited consumer redress mechanism.  So are EBay and Paypal.  Use the internet to advise the company that you believe you’re owed money, and the company pays 100% of the money owed, and assumes 100% of the transaction costs, or else risks harsh consequences for failing to do so.  The fact that a lawyer in San Diego thought his client was not sufficiently covered by this policy, and initiated a class action instead, confirms what businesses fear: That class actions are being used for purposes other than consumer redress, by a self-interested bar.

Arbitration Clauses Are Distorted as Vehicles for Class Action Waivers.  It would be unlikely that an agreement purporting to require purchasers of an iPhone to waive Rule 23 of the FRCP would be enforceable.  Yet an identical provision of an arbitration agreement has been held to be enforceable.  Therefore arbitration appears in many consumer “agreements,” not with the prospect that claims for redress will be arbitrated, but rather that claims asserted by class action lawyers will be dismissed.

The confluence of these three trends puts us where we are now, which is to say no one’s interest is being met.    Rational consumer redress mechanisms are discouraged; businesses’ efforts to manage litigation risk are being regulated to the point of prohibition; and the process of arbitration — a mercantile method of centuries’ lineage and continuing utility — is being mangled and distorted.

How to fix it?  As Viola says in Twelfth Night, “It is too hard a knot for me t’untie!”

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ADR Legislative Update

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Larson Frisby of the American Bar Association recently prepared an informative memo updating the pending federal legislation and regulations that pertain to mediation and arbitration.  The memo was presented at the ABA Dispute Resolution Section Council meeting in August and is well worth serious study.  It is posted on the Section’s web site, here.

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New York’s Global Pound Conference

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A group of very prominent stakeholders on commercial dispute resolution met at Cardozo Law School on September 12, 2016, to conduct the New York City session of the Global Pound Conference.  Of all the many institutions and volunteers who were responsible for this success, the International Mediation Institute takes the foremost position in realizing the vision of its founder, Michael Leathes.

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The New York participants included representatives of users of ADR (companies and individuals), advisers to those users (lawyers and law firms), providers of adjudicative or non-adjudicative services (ADR organizations and solo practitioners), and other “influencers” (including academics and other experts).  These people participated, not just attended, because they periodically responded to “core questions” (posed to participants in all 40 conferences in 32 countries) and other more local and specific questions.  These responses were made available to the participants in real time, and in the aggregate will yield robust data reflecting regional as well as global insight into where we are and where we might progress.

This conference addressed the resolution of business disputes.  Specifically excluded were family, consumer, criminal or other types of disputes.

Among the welcoming speakers, Laurence Shore of Herbert Smith Freehills cautioned humility and modesty both from advocates (who may obstruct resolution through behavior they defend as “zealous”), and neutral mediators and arbitrators (who do well to remember that they almost always understand less than they think they do — indeed, in my own experience, less than anyone else in the room — about the disputes).

The first two panels sought perceptions of the current status of ADR choices and use by end-user parties.  The first panel addressed the participants’ understanding of party needs and expectations in commercial dispute resolution – on whose advice ADR is chosen, with what expectations and with what business goals in mind.  Two outcomes of participant voting particularly caught my eye.  When asked whether concern for attorneys’ own fees had an influence on their advice that their clients engage in ADR processes, only 23% of users and 17% of attorneys – that is, those actually giving and getting the advice – responded that it was.  By contrast, 44% of mediators, 44% of academics, and 37% of arbitrators thought that attorneys’ advice was colored by a concern for their fees.  This seems to suggest that ADR participants other than counsel and their clients harbor skepticism of whether parties are being advised in a disinterested, professional manner.  It also seems peculiar that folks who neither gave nor received confidential legal advice had such a sure view as to what that advice reflected.

(Percentages reflect weighted choices of importance, with 1st choice getting three points, second two, and 3d one – so things don’t add up to 100%.)

Another interesting result of this “user behavior” panel dealt with the relative importance that preserving relationships had in user choice of ADR.  Parties and attorneys rated it the lowest of the six available selections, at 7-8%.  By contrast, mediators thought that users valued relationship preservation much higher, at 20%.  The conclusion might be that mediators think they are doing something that (a) they’re not doing; (b) the users themselves don’t seek; and (c) neither the users nor their legal advisers value.

The second panel addressed party expectations and current practice – what outcomes users value the most in the process and outcomes of ADR.  Here a surprising level of unanimity of perception was revealed in certain propositions.  Pretty much everyone understood that the responsibility for advising a party of the options and consequences of resolution processes lay with inside and outside counsel.  Similarly, pretty much everyone (including users, happily) understood that the main things that users get from mediation are control of the outcome and a reduction of cost.

More nuanced results arose when the group was asked how they understood outcomes were determined. Both parties (79%) and mediators (77%) said that outcomes reflected consensus, a voluntary shared decision.  By contrast, attorneys relegated that idea to a far lower raking (37%) and thought that outcomes reflected a concern for the rule of law (76%).  Parties acknowledged that legal concerns were important (63%) but mediators seemed not fully to appreciate the role that legal concerns take in framing commercial outcomes (49%).  And remember that we’re talking here about the mediators’ own customers.

Perhaps the most helpful perception I got from the whole conference was a better understanding of the ways in which what mediators think they’re doing, contrasted to what users experience them doing and expect them to do.

The third panel looked forward, asking which stakeholders were most likely to obstruct, or to bring about, change in commercial dispute resolution.  Two outcomes of the voting were particularly noteworthy.  First, external lawyers for the parties were uniformly identified as the main source of obstruction.  This was contrary to my experience; I have regularly found counsel for parties in mediation to be highly competent and supportive.  They also, of course, are the ones who employ me, exemplifying profoundly astute powers of observation.  <G>  I’m loathe to join this condemnation, which in any event I have not personally observed.

Various stakeholders were identified as likely to prompt positive change in methods of resolving party disputes — except for the parties themselves!  The parties were the only group who placed themselves in the primary position; everyone else had widely divergent views, none of them prominently naming the parties.  That is to say, the people who had the disputes were the only ones who thought that they were best positioned to improve ways to resolve them.  That outcome seemed either humorous or patronizing.  Or both?

The organizers of this fabulously successful program are to be congratulated, particularly the global project manager Jeremy Lack.  I have never understood why the conference series was subtitled “Access to Justice,” inasmuch as ADR is an attempt to circumvent — not to access — formal, public systems of justice.  Nor have I have thought of ADR as particularly accessible in any event.  Mediation and arbitration are for parties with the money to buy them, whereas the courts are supported by the taxpayer and access is (relatively) free.  And, in practice, very little of the discourse at the actual conference related to this topic.

But quibbles be damned.  Many, many more conferences are scheduled around America and around the world over the next several months.  See the schedule here and hie you to an entirely unique, captivating day of discussion and insight.

Waiver of Class Action Without Arbitration Provision

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In considering the debates raging about the enforceability of class action waiver provisions in arbitration clauses, I have always assumed that the arbitration clause was there just as a vessel to hold the class action provision.  That is, I thought that there was no vehicle to waive class actions outright.  Indeed, I once wasted a good portion of my not-much-remaining youth trying to find any instance where a party to a contract included a waiver of FRCP 23 while contemplating litigation, and I couldn’t find one.

Well, I wan’t looking in the right places.

Many thanks to Karl Bayer, whose indispensable blog Disputing.com has alerted us to an appeal before the Fifth Circuit Court of Appeals that was argued earlier this week.  In Convergys Corporation (363 NLRB No. 51, Nov. 30, 2015), an employer was found to have violated  Section 8(a)(1) of the National Labor Relations Act by requiring employees, as a condition of employment, “to agree that they would not pursue any claim or lawsuit relating to their employment on an individual basis.”  The rule was found unlawful because it explicitly restricts activities protected by Section 7 of the Act.  Noted the Board:

The Board has long and consistently held, with uniform judicial approval, that the Act protects the right of employees to join together to improve their terms and conditions of employment through litigation.  Accordingly, by requiring employees to waive their right to engage in class or group litigation as a condition of employment, the Respondent has interfered with their Section 7 right and violated Section 8(a)(1) of the Act.

Two things spring to mind.  The first is that the NLRB’s rulings in previous cases such as D.R. Horton were in the context of class action waivers embedded in arbitration clauses, and judicial challenges to the Board’s findings were couched in terms of federal support for agreements to arbitrate (assuming, arguendo, that these are agreements rather than unilaterally promulgated policies of employment, and assuming further that the employer’s policy was intended to ensure arbitration rather than to prohibit class actions).  Without the decades-old pro-arbitration judicial policy to rely upon, the employer here  may be less protected from challenge.

The other issue is that, in the event the NLRB’s Decision and Order is upheld, it will necessarily be restricted to agreements of employment.  Other efforts to restrict individual protections afforded by Rule 23, such as consumer, financial, nursing home, and other “agreements,” would of course remain unaffected by the Fifth Circuit’s actions.

The CFPB is acting to eliminate class action waivers in arbitration clauses in consumer financial transactions, and recent word has it that the Obama administration is acting to make entire arbitration provisions unenforceable in nursing home contexts.  Maybe the game of inserting class action waivers, with or without arbitration clauses, has about run its course?


Report from Asian Mediation Association Conference

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I write from Beijing, where the two-day Conference of the Asian Mediation Association has been held, organized by the China Council for Promotion of International Trade (CCPIT) Mediation Centers.  I was very excited to return to Beijing after nine years’ absence and to meet so many like-minded, but differently-situated, colleagues.

The Conference, held by the AMA every two years, attracted over 300 participants from 16 countries.  A total of 42 speakers shared fascinating perspectives on commercial mediation, including legislative and court-annexed  systems as well as private provision of business dispute resolution.

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Many of the themes articulated by the first morning’s speakers resonated throughout the conference.  Several speakers used the term “non-confrontational” when describing the central utility of business mediation.  The concept was that face-to-face accusations are unhelpful in resolving problems and affirmatively harmful in maintaining business relationships, so the intervention of a mediator to keep talks positive and forward-looking was highly valued.

ZHOU Quaing, President of the Supreme People’s Count of the People’s Republic of China, emphasized the beneficial consequences of such an approach to society as a whole: Mediation, he proposed, was not just a private agreement, and the social consequences of dispute resolution were so great that it has become recognized as an important component of the Chinese legal system, with consequent concerns that it be performed professionally by trained mediators.

Andrew PHANG Boon Leong, Judge of Appeal of the Supreme Court of Singapore, suggested that formulations of “rights and entitlements” do not give sufficient weight to equally important societal virtues such as “compassion, duty and economic relationships.”  He suggested that the purpose of separate caucuses in mediation was not, as often supposed in America, to determine the underlying interests of a disputant, but rather “to unearth issues that may cause one party embarrassment.”

LONG Fei, Director of the Supreme People’s Court’s Judicial Reform Office, linked gradations of mediation expertise with the challenges that the process is designed to address.  “people’s mediators” give way to “industrial mediators,” “commercial mediators,” “invited [i.e., specialized] mediators” and finally “professional mediators.  She also observed that dispute resolution outside of adjudicative judicial processes is a matter in which public resources ought to be directed, inasmuch as the process is inexplicably intertwined with the same matters of public concern that justify public maintenance of the court systems.

TANG Weijian, of the Chinese People’s Political Consultative Conference, expressed an underlying theme of the event by suggesting that “power, interest and self-realization” are virtues that are secondary to harmony, the sustenance of which is essential to society.

Each of the many panels and keynote speakers at the Conference contributed fresh and interesting perspectives, especially to this Western student of dispute resolution.  Among the many other speakers at the Conference were:

LU Pengqi, Vice-Chairman of CCPIT

JAING Zengwei, Chairman of CCPIT/CCIOC

Richard WAGNER, of the American firm Steptoe & Johnson LLP

David LIM, Court Mediator of the State Court in Singapore

Danny McFADDEN of CEDR

Laurence BOULLE, Director of the Mediator Standards Board in Australia

Robert RHODES QC, Outer Temple Chambers in London

Francis LAW Wai Hung, President of the Hong Kong Mediation Centre

Fahmi SHAHAB, Executive Director of the Idonesian Mediation Center

LOONG Seng Onn, Executive Director of the Singapore Mediation Centre

Judge Suthatip Jullamon TASANACHAIKUL, Judge of Office of the President of the Supreme Court of Thailand

Shane PICKERING, Mediator at the Ministry of Employment, Fiji

The hero of the event was WANG Fang, Deputy Director of the Secretariat of the CCPIT Mediation Center and current Secretary-General of AMA.  Her leadership of her staff and vision of the conference were exceptional and resulted in one of the finest and most intellectually robust international mediation events I have ever attended.

Keynote at Asian Mediation Conference

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I was honored to address the 4th Conference of the Asian Mediation Association in Beijing,  held 20-21 October, 2016, as a keynote speaker.  My remarks appear below.

* * *

What the West Can Learn from Chinese Mediation

by

Peter Phillips[1]

I first visited China almost 15 years ago as a representative of the CPR Institute in New York.  The Institute is a coalition of corporations, and their law firms, who seek ways to resolve disputes with each other that do not involve entering American courts.  Over the course of five or six years, I worked with CCPIT on a project that eventually became known as the US-China Business Mediation Center.

Although I was very proud of the work that my Chinese friends and I were able to accomplish, I value our personal friendships even more.  During my brief visit for this conference I have been meeting some of my friends and I find my life enriched by their kindness, loyalty and happiness.

At some point during the creation of the US-China Mediation Center, it was made clear to me that many Chinese lawyers, judges, arbitrators and business people wanted to learn how American businesses mediate.  This was a little bit of a surprise to me, because I thought that I had come to China so that I may learn from the Chinese, not to teach them.  But an American professor, Dwight Golann, and I conducted a 3-day training session to explain how America companies mediate.

The training session did not go as we had planned.  Many Chinese judges and very experienced CIETAC arbitrators attended the event, and they were seriously confused.  For one thing, they were accustomed to listening to the professor lecture.  In America, mediators learn, not through lecture, but instead by doing exercises and practicing.  Professor Golann and I were teaching the way you might buy a suit, or ride a bicycle – by trying it and learning what fits.  This process made some of our Chinese friends uncomfortable – they were used to writing notes while someone talked.

The other, more serious, miscommunication was more substantive.  It had to do with what mediation was for – what the very purpose of it was.  The Professor and I were teaching a process where companies who had a dispute went into a private room and hammered out a solution that worked for them, usually by offering some money and also a change to the contract going forward.  One very esteemed Chinese participant found this approach to be completely useless.  He said that he had conciliated over 10,000 cases in his court, and he explained his process.  He said that he told them to stop lying and explain what really happened.  Then he consulted the civil code to determine what the correct outcome would be.  Then he called the parties into his office and told them that Party One owed Party Two 50,000 RMB, and should pay.  He added that he could not force Party One to pay Party Two, but if it did not pay 50,000 RMB, then he would continue the trial and at the end, in front of family, neighbors, and the community, he would order Party One to pay Party Two 50,000 RMB.  “Every one of my cases settled,” he said.

“And they settled on the right terms,” he added.

It was this idea – that the terms of mediation should be “right” – that began the process of learning from my Chinese friends that I sought in the first place.

Young people often scoff that their parents do not understand them or the world – that because they are old, they are ignorant.  A famous American writer, Mark Twain, once wrote “when I was a boy of 14, my father was so ignorant I could hardly stand to have the old man around. But when I got to be 21, I was astonished at how much the old man had learned in seven years.”

So it is, too often, with young America and the older, wiser, more sophisticated Asian countries.  I do not mean to suggest that Americans are stupid.  Rather, they are so eager to teach what they think they know that they often underestimate the lessons that they can learn from older cultures such as China. This is especially true in fields like conciliation, where centuries of experience have developed a different approach to dispute resolution – one that deserves respect.

Western culture emphasizes individual liberty.  Indeed, one of my great heroes, Thomas Jefferson, wrote that the only reason governments exist at all is to protect the liberty of individual people, and the only authority that governments have is the authority that the people grant to it.  This sounds like an appealing idea, and of course it is.  But it can result in a nation that sometimes goes off-course.  As an example, I point you to the election that will take place in three weeks, in which Americans will choose between two presidential candidates that most Americans do not want to be president in the first place.

This emphasis on individuals, and individual liberty, is reflected in the way Americans mediate.  When I learned to mediate, I was trained to listen closely to individual disputants, and probe to find out as much as I could about what they wanted to gain, or to avoid, in this conflict.  I was trained to seek out areas in which their individual desires might be shared without their recognizing it, and how to identify the distinct areas in which they differed.  I was trained to help parties to measure the risk of failing to agree – the risk of going to an American court and losing money, time and reputation in a public and uncertain forum.  I was trained to be alert to possible trade-offs or exchanges or compromises, so that each party to the dispute got the things that were most important to them, by offering to exchange things that were less important to them.  And I was trained that a “successful” mediation was one in which the parties privately agreed to a solution that each thought was the best for them – the best under the circumstances they were faced with, and better than going to court.

But I was never trained to counsel them in what the law was.  That was for their personal lawyers to help with, not for the neutral and unbiased mediator.  Indeed, I was trained never, never to express an opinion about anything other than what might be best for the specific parties in front of me – and even then, always to defer to their own business judgment.

I will add that this emphasis on personal self-interest has a peculiar and uncomfortable relationship to our personal values in America.  As a child I was taught never to take the largest piece of pie, but instead to offer it to others first.  I was taught to apologize and admit responsibility if, by mistake, I threw a baseball through my neighbor’s window while I was playing.  And I was taught to be fair when playing with my schoolmates on the playground, not to bully others and not to take advantage of younger children.  Yet when American businesses engage in litigation, and even mediation, they consistently deny responsibility and seek every advantage they can obtain – and they do so on the strict advice of their legal counsel.

Compare this approach to the practice in China.  In 2009 I was given a copy of this book that I hold in my hand, which celebrated the 20th anniversary of the CCPIT Mediation Centers.  It is a beautiful volume and I was honored to receive it.  Many of my friends worked on it, including ZHUNG Rungao, CHENG Hui, and our host today WANG Fang.  There is a lovely picture of WAN Jifei addressing the 2005 US-China Mediation Center Congress, with a (younger) me listening to his words.  And here is a picture of the training session that Professor Golann conducted.

But the reason I treasure this book, and the reason I sometimes bring it down from the shelf to read it again, is because it seems to me to contain a different and valuable insight – the emphasis on social harmony.  On page 143 there are several quotations on the idea of harmony from the sages, including Confucius’ teaching that harmony is the most valuable thing, and the selection from Zisi’s Doctrine of the Mean that “Harmony is the universal path.”  I understand these teachings to be similar to those of Jefferson, in that they are aimed at how individuals should hope to act – but different because they emphasize balance, discretion and harmony rather than mere self-interest.

Our approach to mediation differs in the same way.  The pages in the book that follow these quotations contain statements by CCPIT mediators.  These statements are startling to a Western reader, because of the consistent emphasis on the idea of harmony.  WANG Fang writes that, in China, “mediation should actively promote the spirits of harmony and cooperation.”  LI Huanting understands the purpose of mediation to be “to promote business harmony.”  LI Yong says, “Mediation is to develop the qualities of human nature so as to resolve contradictions, and pursue harmony which benefits the society and the individual.”  Time and time again, these skilled Chinese mediators reveal that the reason they do their work is not only to get the parties what they want, but also with an eye to building what ZHAO Jie calls “a harmonious society.”

It is as if, when parties meet in a Western mediation room, they contemplate the concept of fa and seek ways to avoid it; while in a Chinese mediation room they contemplate the ideal of li and seek to embrace it.

I am not proposing that Western mediators become Chinese mediators.  No one should become someone else.  Americans mediate the way they do, primarily because that is what American companies expect them to do.  This is of course one of the challenges of mediation that involves American and Chinese companies – they have different expectations of the process and of the people involved.  Still, we have much to learn from our Chinese friends.

At the core of my concern is a lesson I learned from my grandmother.  When, as a small child, a plate of sweets was passed around the dinner table, I took three.  She leaned over and put two back on the plate, whispering to me, “There are others.”  I wish that this concept would be considered more actively by Americans when they mediate – in addition to our own self-interest, and not ignoring it, to exhibit some sensitivity to the idea that “there are others,” who have their own legitimate self-interests, and who may be affected by our decisions.  To be clear, I suggest this consideration of “others,” not as an exercise in virtue, but a practical way of improving our society as a whole.  It is possible, as my older and wiser colleague explained in our Beijing training, that there is a “right way” for business mediations to conclude.

I speak this morning to urge us to listen better to each other.  I especially voice the hope that Americans will listen more closely to our Chinese friends.  Perhaps the time has come when our exchanges should not simply be Western mediators like Professor Golann and myself coming to Beijing to teach American styles of mediation.  Perhaps it is time for Chinese mediators to visit America and train American mediators not only about Chinese mediation, but also about the Chinese outlook on conflict and harmony, and the service that mediation provides, not just to the people at the table, but more broadly to the society in which we live, the world we hope to create, and the lessons we offer to our children.

 

[1] F. Peter Phillips is an arbitrator and mediator who practices in the New York City area.  He is Adjunct Professor and Director of the Alternative Dispute Resolution Skills Program at New York Law School, and can be reached at www.BusinessConflictManagement.com.

Upcoming Volume on Transforming Justice and Lawyers

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Prof. Marjorie Silver of Tuoro Law Center has sent me the proofs of a book that she is editing, scheduled to be released in January 2017 by Carolina Academic Press.  Titled Transforming Justice, Lawyers and the Practice of Law, the volume collects brave and insightful essays on the sometimes uncomfortable juxtaposition between teaching and practicing law on the one hand, and being a spiritually congruent human being on the other.

The publisher’s advance note provides:

Transforming Justice, Lawyers and the Practice of Law is a forthcoming anthology compiled by the editor of The Affective Assistance of Counsel: Practicing Law as a Healing Profession (Carolina Academic Press 2007). This new work is a collection of writings by participants in the Project for Integrating Spirituality, Law and Politics (PISLAP) and others actively engaged in transforming law, legal education and social justice into something that is collaborative rather than adversarial, that seeks to heal brokenness rather than merely resolve disputes, and that moves us toward The Beloved Community envisioned by the Reverend Martin Luther King, Jr. more than fifty years ago. The book will showcase the abundant ways in which lawyers, judges, law professors and others are employing more communitarian, peaceful and healing ways to resolve conflicts and achieve justice. It is written for those who share similar goals and are eager to learn new ways to practice law and create a legal system that fosters empathy, compassion and constructive change.

PISLAP, referred to in the description, is part-community, part-movement that seeks to “develop a new spiritually-informed approach to law and social change.”  It is a far-sighted and ambitious group of devoted and capable practitioners and academics whose work merits being on the radar screen of the legal community, and especially those of us who seek to practice in the field of resolving conflicts.

I am proud to be a chapter contributor to this volume and hope that it has a wide readership.

CAP Law

NJ Supreme Court on Agreements to Arbitrate

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We have previously noted the New Jersey Supreme Court’s somewhat radical view of arbitration agreements — including the proposition that, to be enforceable, each party to the contract needs to understand what arbitration means.  This principle has been applied to a subsequent dispute before the State Supreme Court, resulting in the holding that a provision of an arbitration agreement in a student enrollment contract delegating the authority to determine arbitrability to the arbitrator is invalid where the students were not put on notice that (a) a court would not determine arbitrability, or (b) a court would not determine anything whatsoever inasmuch as the students had irrevocably waived their right to judicial access.

In Morgan v. Sanford Brown Institute, a complaint was brought in state court by students alleging fraud against Sanford Brown Institute (a for-profit educational institution offering medical ultrasound training).  Defendant Sanford Brown unsuccessfully argued a motion to compel arbitration, implicitly acknowledging that the court had authority to grant such relief.  The school neither relied upon the delegation clause in the arbitration agreement (empowering an arbitrator, not a court, to determine arbitrability of claims), nor cited any law with respect to the validity of such delegation provisions.  The trial court denied the motion but the school prevailed before the Appellate Division, which reversed the trial court, dismissed the students’ complaint, and directed that the claims be sent to arbitration.  Here, for the first time, the court held that “the parties ‘clearly and unmistakably’ agreed an arbitrator would determine issues of arbitrability.”  The trial court’s error, therefore, consisted of its not submitting the issue of arbitrability to an arbitrator.

Ignoring its own holding, the Appellate Division panel nevertheless made certain legal findings with respect to the arbitration agreement, determining inter alia that the arbitration agreement’s limitation on the award of statutory damages and exclusion of other protections of the New Jersey Consumer Fraud Act were unconscionable and unenforceable.

The Supreme Court reversed, holding the entire arbitration agreement unenforceable and remanded to the trial court for (presumably) reinstatement of the students’ claim.  The rationale for the Supreme Court’s action was consistent with, but an extension of, its previous holding in Atalese v. U.S. Legal Services Group.  That case, in turn, was founded on the proposition that, pursuant to the Federal Arbitration Act, the enforceability of agreements to arbitrate was to be determined by generally applicable state law principles of contract, which (in New Jersey) meant that “a consumer had to have some understanding that, by accepting arbitration, she is surrendering her common-law and constitutional right of access to the courthouse.”  Because, in the court’s view, “state law governs not only whether the parties formed a contract to arbitrate their disputes, but also whether the parties formed an agreement to delegate the issue of arbitrability to an arbitrator,”  those state law principles — such as the requirement of mutual assent and a common understanding of the contract terms — defeat this agreement.  The court held that a waiver of a constitutionally guaranteed right must be clear and unmistakable — and, under New Jersey law, explained “in sufficiently broad terms” in the agreement itself.  The agreement at issue “[did] not explain, in broadly worded language or any other manner, that plaintiffs are waiving their right to seek relief in court for breach of the enrollment agreement or for a statutory violation,” and thus did not satisfy the elements necessary for the formation of a contract.

Several concerns are raised by this decision.  First, it seems to be restricted to consumers who enter into arbitration agreements.  That is, could General Motors rely on Atalese or Sanford Brown to argue that its arbitration agreement with DuPont is unenforceable because the contract did not explain the consequences of arbitration or delegation with respect to waiver of constitutionally guaranteed access to the courts?  Indeed, could any party to a contract contest its validity on the ground that it did not understand the consequences of its agreement to certain of its provisions?

In addition, there is the issue of futility.  The court itself noted that the arbitration provision in the 4-page enrollment agreement was in 9-point type, single-spaced, and therefore difficult to read.  Would the insertion of a definition of arbitration, waiver, and delegation have cured the defect that the court complained of?  And would certain prospective students reconsider their intention to enroll on Sanford brown Institute because of an additional inserted phrase in the arbitration clause of the enrollment agreement?

Finally, and perhaps of greatest concern, is the prospect that, in order to be enforceable in New Jersey, arbitration agreements now must feature certain provisions that arbitration agreements in the neighboring states of Pennsylvania, New York and Delaware need not.  The Sanford Brown court saw no difficulty here —  “no greater burden is placed on an arbitration agreement than other agreements waiving constitutional or statutory rights.”  It refers to cases cited in Atalese that require notice when a consumer or employee agrees to waive appeals of the denial of a license and other administrative acts.  This somehow doesn’t hold water.  It is the very nature of agreements to arbitrate that the parties mutually waive access to the courts.  One could argue that there is nothing of substance in an arbitration agreement other than a waiver of access to the courts.  If General Motors is presumed to understand this, and students enrolled in an ultrasound technician training course are presumed not to understand it and require it to be explained to them, then where do I fall in the continuum?  And where do you?

It seems apparent that the driving force behind this opinion is hostility to judicial arbitration, at least in the consumer context.  The court is deeply skeptical that courts should be carved out of claims of consumer fraud.  So are many of us — but as a matter of policy, not common law.  I invite readers to articulate the broad legal contract principles that render unenforceable, as to students and consumers, contracts that are perfectly enforceable between businesses, and that result in common law contract principles that render unenforceable in New Jersey arbitration agreements that are enforceable in every other state.

 

 

NY Times: “Arbitration” = Secretive and Unfair

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On the front page of today’s New York Times there appears an article reporting on a legal argument that is purportedly being advanced by Wells Fargo in response to claims brought on behalf of thousands of customers in whose name, and without whose knowledge, over 2,000,000 “sham” accounts were established.

The bank is reported to be arguing that the accounts that the customers did not authorize contained agreements that the customers did not see, containing provisions that the customers did not understand, pursuant to which judicial class actions were barred.  These provisions — drafted by the bank — apparently also unilaterally decreed that customers seeking redress were required to avail themselves of private arbitration as their exclusive method of redress.  The bank wants these provisions enforced and the judicial claims dismissed in favor of thousands of individual arbitrations.

In the fourth graf of this article, “arbitration” is defined as “a secretive legal process that often favors corporations.”

Will someone who gives a damn about dispute resolution in this country please take care of this?  I don’t mean teaching the Times reporters what arbitration is.  I mean unilaterally promulgating provisions in consumer contracts that are secretive and often favor corporations.

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