May 2014 Archives

Excluding Third Party Actions in Your Arbitration Clause

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By Jeffrey T. Zaino, Esq.

Third party court actions involving a party that is also subject to the arbitration process can be problematic and create significant complications and delays for the parties to the arbitration agreement, i.e., the need to respond in the third party action in court, while being required to assert rights against the other contracting party (under the indemnity provision or otherwise) in arbitration. This can result not only in having to participate in two separate arenas and jurisdictions to address the same matter (e.g., breach of representation), but also the possibility of ultimately producing inconsistent results. It is therefore worth considering a contractual "carve out" for third party actions when drafting your arbitration clause. The following arbitration clause provides an example of one approach taken by practitioner Sidney Bluming of Meister Seelig & Fein, LLP:

(a) In the event of any dispute which arises solely between the parties hereto, arising under, relating to or in connection with this Agreement or the enforcement or interpretation of any provision hereof, or the breach or alleged breach by either party of its obligations hereunder, such dispute will be submitted to binding arbitration pursuant to the Commercial Arbitration Rules then obtaining of the American Arbitration Association, in New York, New York. The arbitration award shall be final and binding upon the parties and judgment on any award may be entered in any appropriate state or federal court within the County of New York, State of New York, or any other court of competent jurisdiction. All arbitration proceedings, and all documents, pleadings and transcripts associated therewith, shall be kept strictly confidential by all parties, their counsel and other advisors, employees, experts and all others under their reasonable control.

(b) In the event that a third party brings an action or other proceeding against either party to this Agreement or asserts a cause of action in any action or proceeding initiated by either party to this Agreement against it (a "Third Party Action"), then the party to this Agreement against which or whom such Third Party Action is brought or asserted, may in such Third Party Action, or separately in any court of competent jurisdiction, litigate any related claim which it may have against the other party to this Agreement, including, without limitation, by way of a claim, indemnity, cross-claim, counterclaim, interpleader or other third party action without being obligate to arbitrate the same as otherwise provided in Paragraph (a) hereof. In any such case, the matter which is the subject of such Third Party Action (including any related claims, indemnity, cross-claim, counterclaim, interpleader or other third party action, which either party hereto may have against the other) shall not be subject to arbitration, but shall be resolved exclusively within such Third Party Action or, at the election of the asserting party, in such separate action[, and for such purposes of inclusion in the Third Party Action, each party hereto expressly consents to the jurisdiction and venue of the court or other legal body in which such Third Party Action is pending, and in such separate action, to the jurisdiction of the designated state or federal court within the County of New York, State of New York].

Jeffrey T. Zaino, Esq., is Vice President for the Commercial Division of the American Arbitration Association in New York.

Quick Tips for Developing Your ADR Career

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By Jeffrey T. Zaino

Developing a career as an arbitrator or mediator can be very challenging. Before you consider moving into the field it is important that you talk to those arbitrators and mediators who have done it successfully. Over the years I have had the opportunity to take their counsel. The following are some of the best of their many tips regarding how to develop and sustain an ADR career:
• Compare your resume/panel card to successful neutrals.

• Keep your resume/panel card updated and fresh. ADR service providers and advocates do carefully review resumes/panel cards.

• Set a fair hourly or per diem rate. Compare your rate with others with similar backgrounds and experience. Understand what the going rate is in your region.

• Get involved in various bars associations, state and national. Do not just be a dormant member, volunteer for committees and produce. Bar associations provide a wonderful networking opportunity.

• Become active with non-bar association groups active in the field of ADR (e.g., Association for Conflict Resolution and Labor and Employment Relations Association).

• Pay your dues - volunteer your services as a neutral to develop skills and network. There are various pro bono community and court programs.

• Find multiple mentors to see and learn about different styles. Shadow your mentor not just to be educated but to network with advocates and parties.

• Practice in your backyard where parties and advocates know of you and your reputation.

• Participate in ongoing trainings and educational events to keep up on current trends/laws and to network.

• If pursuing a mediation career read, "Making Peach and Money: Economic Analysis of the Market for Mediators in Private Practice."

• Have a webpage and effectively use social media. Social media is here to stay and many new neutrals use social media to promote themselves. It is one tool used by parties and advocates to research about neutrals.

• Google yourself. If you are active in the community professionally and have a social media presence, what should appear is positive and free information about you. This is a free advertisement about you and your ADR practice.

Jeffrey T. Zaino, Esq., is Vice President for the Commercial Division of the American Arbitration Association in New York.

• Do not get discouraged - as any successful neutral will tell you, it takes a lot of hard work and time to develop a career in this field.

Interview with New AAA Arbitrator Timothy Taylor

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By Jeffrey T. Zaino, Esq.

In the interest of developing and promoting new arbitrators in New York, I offer the below Q&A of a new AAA labor arbitrator, Timothy Taylor.

Q: When did you first take an interest in alternative dispute resolution? What prompted such interest?

A. My earliest memories include finding ways to resolve disputes without the aid of the governing authorities. Growing up in a rural community in the Deep South access to the courts was non-existent. Local people had to develop a way to resolve daily conflicts in a way that strengthened relationships rather than weakened them. My interest in alternative dispute resolution grew from watching the elders in my community apply principles of fairness, justice, and equity.

While at Cornell Law School, I had the opportunity to take an intensive writing course with Professor Michael Gold of the ILR School. The assignment for that class exposed me to topics in alternative dispute resolution. My first job after graduating was with a firm representing public sector labor unions. As an attorney dealing with contract grievances, negotiating collective bargaining agreements and representing clients in arbitration proceedings as well as civil litigation, I grew to appreciate the efficiency and fairness of ADR.

Q: What past, professional and/or personal experiences, have you had that make you a better arbitrator?

A. After 25 years of litigating cases in various forums, the one thing that I remember most is that for the client this may be the only case that they have or will ever have. Because of this, they deserved the very best representation and experience possible. While the outcome mattered, the process sometimes mattered more. If I focused on each step of the process and diligently prepared and presented the case, the end result was usually just and fair. In arbitration, I have found that paying attention to the details of the process, from listening to opening statements to careful review of the evidence and thoughtfully writing the decision, results in an equally just and fair result.

Q: How do you manage an arbitration case?

A. Since every arbitration has its own procedure, the parties are responsible for highlighting the contractual provisions. In addition to the contractual provisions, it is my practice to give the representatives of the parties an opportunity to meet and discuss possible settlement. If settlement is unlikely, barring any outstanding discovery issues, the parties are responsible for presenting their case in the manner they choose, consistent with due process, as long as they are efficient and above all civil.

Q: What advice would you give new arbitrators starting off and breaking into the

A. Reread " How Arbitration Works". Be patient, write out a business plan and have a daily to-do list related to that business plan. Make sure your plan includes all aspects of ADR, and share your plan with your mentors. I would also recommend joining and participating in your local and state bar association.

Q: How do you foresee ADR - the future, say in the next 10 years?

A. In the next ten years ADR will continue to grow. Administrative agencies, in their regulatory and adjudicatory functions, will use alternative dispute resolution processes to provide due process to the public. Federal, state, and local courts will expand the use of ADR as a way to better manage their crowded dockets and provide greater access to the legal system in matters involving civil litigation. State and local governments, particularly in resolving disputes related to budgets, will continue to use it to strengthen management-union relationships. The accessibility of qualified arbitrators and mediators will help litigants in all areas save money and shorten the litigation process. Since ninety percent of civil cases settle, ADR will continue to play an important role in fostering a culture where the parties truly are heard prior to the settlement of their case. As long as ADR continues to give the parties a fair and impartial alternative without the expense and time of traditional litigation, it will continue to be the preferred method of resolving disputes.

Jeffrey T. Zaino, Esq., is Vice President for the Commercial Division of the American Arbitration Association in New York.


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By Jeffrey T. Zaino, Esq.

The American Arbitration Association (AAA) will soon offer a Fixed Rate Mediation Program for commercial disputes designed to provide parties with a cost effective approach to resolving two-party disputes where claim amount(s) are $75,000.00 or less by submitting a dispute to a neutral third-party (the Mediator). Multi-party cases with claim(s) less than $75,000.00 are also eligible provided all parties agree that the mediation can conclude in one day.

Mediation will take place at a flat rate (fixed, up front disclosed cost) with expedited time frames and parties will have access to AAA

Mediators from the AAA® National Roster that agreed to participate in this program. The program will be flexible and allow parties to incorporate it into an existing AAA arbitration. The program can reduce transactional costs (time, money, emotions) while achieving an amicable resolution of the dispute. There are considerable cost savings when compared to hourly or ad-hoc Mediators.

Under the program, prompt appointment of an AAA Mediator will take place. Only mediators that have agreed in advance to serve at the fixed rate under this program will be selected. The mediations will be one day and scheduled within 30 days of the Mediator's appointment. If requested, a pre-mediation conference call with parties and Mediator can be arranged along with submission of pre-mediation statements.

Parties that mediate under this program will be charged a fixed rate of $525.00 per party which includes the Mediator's compensation. If the mediation is settled or withdrawn prior to the confirmation of the appointment of the mediator, and / or prior to the mediation conference being held, and / or prior to the submittal of pre-mediation statements, the mediator will not be compensated. The AAA nonrefundable filling fee of $200.00 will not be refunded. The mediator's compensation of $850.00 shall be refunded to the paying party(s). Parties to an AAA arbitration that mediate under this program pay the mediator's fixed rate of $850.00 which is shared equally amongst the parties.

Jeffrey T. Zaino, Esq., is Vice President for the Commercial Division of the American Arbitration Association in New York.

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This page is an archive of entries from May 2014 listed from newest to oldest.

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