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June 2014 Archives

June 23, 2014

Mediation in E-Discovery

http://nysbar.com/blogs/ResolutionRoundtable/


By Steven C. Bennett


Commentators have increasingly remarked on the possibility for use of "Alternative Dispute Resolution" (ADR) as a means to resolve discovery disputes, especially those in the growing field of "electronic discovery" (e-discovery) in litigation. The volume of "electronically stored information" (ESI) and ever-changing communications, storage and other applications technologies present a great challenge for courts, which may not have the resources and expertise to tackle the project management issues that often arise in e-discovery.

Cooperation and transparency are essential elements of modern e-discovery practice. Because the parties best know their own needs and capabilities, negotiation, rather than motion practice and judicial supervision, has become a key to efficient litigation. Yet, counsel sometimes shirk their responsibility to gain an understanding of their clients' capabilities, and may assert overbroad demands and objections to discovery. Where parties do not confront their issues in good faith, and early in the discovery process, a case can become tied up in motion practice, sideshow requests for sanctions, and "do over" inefficiencies.

Under federal rules, a "special master" may be appointed to supervise all or a portion of the e-discovery process. Typically, the master's appointment terms are negotiated between the parties, and "so ordered" by the court. The master's fees are generally paid by the parties. Due to expense, masters are not routinely used. Most courts rely on magistrate judges to supervise more complicated discovery projects in federal litigation. Several districts have adopted mediation programs, which could be adapted to the e-discovery context. In many cases, a judge may perform "triage" to determine what particular issues, or what forms of discovery, may best contribute to efficient resolution of the case.

In New York's state courts, judges may appoint special "discovery referees" to oversee complicated or contentious cases. The courts also may draw upon retired judges as "judicial hearing officers." Several of the Commercial Division courts have developed programs for more organized referral of cases, where judges spot problems brewing in the discovery process. With such resources, a neutral may help set a "tone" of civility in the discovery process, which can facilitate resolution of problems, without the need for motion practice. Courts might also benefit from access to technology professionals, assigned to the court, to help judges address e-discovery issues.

In many cases, organized discussion of e-discovery problems can produce negotiated solutions. A neutral need not resolve all e-discovery disputes in a single session. The process may proceed in "steps," toward resolution of significant issues. Where problems remain, moreover, the process of review by a referee provides increased clarity of understanding, such that resolution by the court may be made more efficient.

The 2012 report on commercial litigation in New York courts recommended, among other things, development of a cadre of qualified referees and other resources to assist in management of the discovery process. Not all these efforts necessarily require additional resources from the courts. One particular suggestion is that judges focus early on discovery efforts that may help to settle a case. Many of the best practices of the Commercial Division judges could be extended to litigation in other areas.


Steven C. Bennett is a partner at Park Jensen Bennett LLP, in New York City. The views expressed are solely those of the author, and should not be attributed to the author's firm, or its clients.

Guidelines and Best Billing Practices for Arbitrators

By Jeffrey T. Zaino, Esq.

A primary objective of arbitration is to reduce the costs of dispute resolution. Arbitration costs can include administrative fees of an alternative dispute resolution (ADR) service provider and the arbitrator's fees. It is imperative that ADR service providers, neutrals and advocates work together to ensure that no one is precluded by cost from using an arbitration process. At the same time, ADR service providers and arbitrators deserve to be fairly compensated for their time and services.

Arbitrators should keep in mind the need for simplicity in their fee structure but rates for serving on AAA panels, for most case types, are at the complete discretion of the arbitrator. There are, however, certain best billing practices for an arbitrator. This article will provide some guidelines and best practice recommendations made by AAA Neutrals Services. It should be noted that these guidelines and best practices for billing are important regardless of the ADR forum. Also, many ADR providers likes JAMS and CPR also have similar high expectations with respect to arbitrator billing practices.

Per Diem/Hourly Fees

Arbitrator fees should be all inclusive. Per Diem fees are expected to include a full day's hearing time (7 hours). With either per diem or hourly fees, no billing should be submitted for (a) time spent discussing the case with AAA staff; (b) written, telephonic, faxed, and electronic communications with case management staff; (c) local travel time and expenses; (d) personal administrative assistants; or (e) stamps, local calls, copying of materials, etc.

If the arbitrator intends to charge for any of these costs separately from the hourly or per diem fee, the arbitrator must so state in the fees section of the AAA panel biography.

Study Time

If the arbitrator intends to be compensated for study time, it must be listed as a separate fee on the panel biography. A detailed billing sheet documenting the specific activity and actual time spent should accompany the fee request on each case on which the arbitrator serves.

The possibility and extent of study time must also be discussed with the Case Manager at the time of appointment or following the first preliminary hearing. Parties have a right to know in advance the approximate amount of your charges.

Cancellation Fees

Since many AAA arbitrators are busy practitioners, they do not charge a cancellation for postponements of hearing dates or cancellation because of settlement. If an arbitrator requires a cancellation fee, it must be listed as a separate fee on the resume, it should be for unusual circumstances, and it should require no more than 48 hours notice. Notice of postponements or cancellations may be received from a Case Manager by telephone or by e-mail. Any request for postponement or cancellation fees must be accompanied by a statement that the arbitrator was unable to reschedule or make professional use of the billed time.

Expenses

In most cases, no additional expenses will be incurred as hearings will be held locally. If the arbitrator serves as an arbitrator on a case outside of his or her locale, it should be clarified before the hearing that reasonable, necessary air travel, hotel room accommodations and meals will be reimbursed. Entertainment costs and personal expenses are not reimbursable. An arbitrator may be required to submit receipts for expenses.

Post-Award Activity

If a request or remand by the court to modify an award is necessitated by an error by the arbitrator, the arbitrator should dispose of the request or remand without additional compensation.

If a request or remand for modification does not require a great deal of effort, such as the omission of a word in a company name, the arbitrator should dispose of the request or remand without additional compensation.

If a request or remand for modification is not the result of an error by the arbitrator or requires significant effort on the arbitrator's part, then it is appropriate to be compensated for such activity. AAA will attempt to collect such compensation in advance.

Billing Language

The language used in describing fees and expenses should be clear and detailed, not summarized, as for example, "for services rendered".

Every effort will be made to collect arbitrator compensation before the hearing date. If the compensation has not been deposited, pursuant to the rules the arbitrator will be given the option to suspend or terminate the proceeding.

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

About June 2014

This page contains all entries posted to Resolution Roundtable in June 2014. They are listed from oldest to newest.

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