July 2015 Archives

By Gerald M. Levine, Esq., Levine Samuel, LLP

CPLR 7503(c) provides that "notice or demand [for arbitration] shall be served in the same manner as a summons or by registered or certified mail, return receipt requested." Plaintiff in Town of Amherst v. Granite State Ins. Co., Inc., 2015 NY Slip Op 05352 (4th Dept. 6-19-2015) argued that defendant's service of a demand for arbitration was defective because it was inconsistent with the statutory requirements. The motion court agreed; the appellate division reversed.

Two interesting points in the case. First, the parties had entered into a handwritten agreement in which they "agreed to litigate" a particular issue that plaintiff believed constituted a waiver of the Policy's arbitration clause. The court held that "Once the parties to a broad arbitration clause have made a valid choice of forum . . . all questions with respect to the validity and effect of subsequent documents purporting to work a modification or termination of the substantive provisions of their original agreement are to be resolved by the arbitrator."

The second point concerns service of the demand for arbitration. The court held that New York law was inapplicable. Defendant had served the demand by Federal Express, which the court in an earlier case, Matter of New Cent. Mut. Fire Ins. Co. V. Czumaj, 9 A.D.3d 833, 834 (2004) had held was defective because it was not one of the permitted methods of service.

However, in Town of Amherst the parties had expressly agreed to be bound by the procedural rules of the American Arbitration Association, which permits such service--Rule 39 then but currently Rule 43 under the Amended Commercial Arbitration Rules.

The agreement to be bound by the rules of the arbitral provider for serving notices had the result of superseding New York Law, citing Smith v. Positive Prods., 419 F.Supp 2d 437, 446 (SDNY 2005).

Federal Arbitration Case Update - Cox and the Courtroom

| No Comments

By Richard Birke

Following is an interesting and recent federal court ruling related to arbitration.

Litigation Activity Results in Waiver of Right to Arbitrate
Healy v. Cox Communications
United States Court of Appeals, Tenth Circuit
June 24, 2015

In 2009, Cox's cable service subscribers sued, arguing that Cox had illegally tied premium cable to its "set-box" rental. Cox moved to dismiss. While the motion was pending, Cox inserted mandatory arbitration clauses and a class waiver in all its contracts, including those of putative class members.

Class certification failed, but smaller sub-classes began to file many class actions - each of which was designed to overcome the objections the court had with the original, national attempt to certify a class.

Richard Healy became the lead plaintiff in an Oklahoma-based case. Cox moved to dismiss, and when that was unsuccessful, the parties agreed to stay other cases and use Oklahoma as a bellwether.

After substantial activity, including a grant of class certification, Cox moved again to compel arbitration. The district court denied the motion, ruling that Cox's litigation activity amounted to a waiver. Cox appealed.

The Court of Appeals for the Tenth Circuit affirmed. It found that "the parties then engaged in extensive pre-trial discovery, issuing interrogatories, submitting declarations, exchanging 10s of thousands of documents, locating and hiring experts, and deposing witnesses. In September 2013, named plaintiff Healy moved to certify a class. Cox opposed the motion and moved to exclude the testimony of Healy's experts in support of the motion. Nowhere in its answer did Cox inform the district court of its arbitration agreements or raise the presence of these agreements as an impediment to the alleged numerosity, typicality, and commonality of the class. During the pendency of the motion for class certification, the parties continued to engage in discovery. Cox also filed a surreply in opposition to the motion for certification, which again did not mention the arbitration provisions."

The Court used a six-part test to determine waiver. The factors are "(1) whether the party's actions are inconsistent with the right to arbitrate; (2) whether the litigation machinery has been substantially invoked and the parties were well into preparation of a lawsuit before the party notified the opposing party of an intent to arbitrate; (3) whether a party either requested arbitration enforcement close to the trial date or delayed for a long period before seeking a stay; (4) whether a defendant seeking arbitration filed a counterclaim without asking for a stay of the proceedings; (5) whether important intervening steps [e.g., taking advantage of judicial discovery procedures not available in arbitration] had taken place; and (6) whether the delay affected, misled, or prejudiced the opposing party."

The Court analyzed each and found that they "strongly cut against Cox." The district court's denial of the motion to compel arbitration was affirmed, and the case remanded for an increasingly rare class action trial on the merits.

This entry was posted in Alternative Dispute Resolution, Arbitration, Arbitrator, Class Action, Multi District Litigation and tagged class certification, Communications, Cox, Healy v. Cox Communications, motion to compel arbitration, Tenth Circuit, United States Court of Appeals, waiver by Richard Birke.

Arbitration and Mediation Courses - Webinars/Live/Online

| No Comments

To view webinars and live Courses, see the following link:


To view online courses, see the following link:


Lawline will be sponsoring a 3-member panel discussion led by Gerald M. Levine on the administrative (ODR) and statutory procedures for combatting cybersquatting. It will take place on October 11, 2015 at midday for 75 minutes (live and streamed) at New York Law School. The panelists will cover the arbitral regime implemented by the Internet Corporation for Names and Numbers (ICANN), the Uniform Domain Name Dispute Resolution Policy, and the Anticybersquatting Consumer Protection Act, both of which were rolled out in 1999. The discussion will include procedures, evidentiary demands, remedies, and jurisprudence of both regimes.

September Arbitration Events - Posted by NYIAC

| No Comments

Tenth Annual ICC New York Conference (Sept. 21)

This conference will address current challenges facing institutions, counsel and arbitrators from an ICC perspective. The conference will take place at Sidley Austin LLP and will feature Andrea Carlevaris, Secretary General, ICC International Court of Arbitration and President, SICANA, Inc.
Register by August 21st for an Early Bird Discount

NYIAC Fall for Ethics Breakfast Panel (Sept. 22)

Two years in, how are the IBA Guidelines on Party Representation faring? Are they being used? Are they effective at regulating counsel conduct? Join the discussion with speakers including Julie Bédard, Paul Friedland, Samaa Haridi and Elliot Polebaum, moderated by Joseph LoBue and Melissa Byroade. The panel will take place at NYIAC from 8:30-10:15 a.m.; attendees will be eligible to receive 2.0 NY Ethics CLE credits. Stay tuned for details and registration information.

Fourth Annual GAR Live New York (Sept. 24)

This one-day conference will bring together an elite line up of speakers to discuss a variety of topics, including "Damages - why do arbitrators always get it wrong?" The conference is co-chaired by Mark Friedman and John Fellas.
*NYIAC Individual Members receive a 15% discount on registration. For details, e-mail info@nyiac.org.

NYIAC Breakfast for Individual Members (Sept. 29)

Olivier André, Vice President of CPR, joins us for a breakfast session at NYIAC with up-to-the-minute updates on CPR initiatves.
*Open to NYIAC Individual Members only.

Guidance Note: Arbitration and Social Media

| No Comments

To access the Guidance Note: Arbitration and Social Media, see the following link:


The Guidance Note was prepared by a committee consisting of: Thomas D. Halket (Chair), Stephen P. Gilbert, Herbert H. (Hal) Gray, Larry D. Harris, Robert A. Holtzman, William H. Lemons, Peter L. Michaelson, Edna Sussman, Irene C. Warshauer and John H. Wilkinson.

On May 27, 2015, the Dispute Resolution Section of the NYSBA presented the CLE "Building a Sustainable ADR Practice, A Guide for Lawyers." If you missed the program, you can view it here online: https://lnkd.in/en82kEH

"This Legal Update was first published by Practical Law Litigation web service at http://us.practicallaw.com/w-000-4856. For more information about Practical Law, visit us.practicallaw.com."

In Katz v. Cellco Partnership, the US Court of Appeals for the Second Circuit held that the Federal Arbitration Act (FAA) mandates a stay of proceedings, rather a discretionary dismissal, when claims are referred to arbitration.
Practical Law Litigation

On July 28, 2015, in Katz v. Cellco Partnership, the US Court of Appeals for the Second Circuit held that the Federal Arbitration Act (FAA) mandates a stay of proceedings, rather a discretionary dismissal, when claims are referred to arbitration (Nos. 14-138 and 14-291 (2d Cir. July 28, 2015)). Katz sued Verizon for breach of contract and consumer fraud claims on behalf of a putative class of New York-area Verizon subscribers. His contract with Verizon included an arbitration clause that invoked the FAA and required arbitration of disputes arising from the agreement or from Verizon's wireless services.

Verizon moved to compel arbitration and stay the proceedings. Katz argued, in contrast, that the action should be dismissed if arbitration was compelled. The district court ruled that Katz's claims were arbitrable and dismissed the action. The court noted that whether district courts have discretion to dismiss the action is an open question in the Second Circuit.

Business to business arbitration thrives today and is used by thousands of businesses in every sector. Companies use arbitration to handle commercial disputes, including large and complex cases, through a private and customized process decided by expert neutrals who understand the intricacies unique to the parties' industry sector.

There are many people, however, who say arbitration is becoming as expensive and time consuming as litigation. The American Arbitration Association (AAA) looked at 4,400 cases administered by the AAA over a three year period and across five important U.S. business sectors: energy, healthcare, financial services, technology, and telecom. There were billions of dollars in claims, one third of which were even over $500,000 and involved complex disputes.

Below are the results of the case review completed by the AAA.

FACT: Parties settle prior to hearings at a rate of 3 to 1.\

Disputes in industries where parties typically continue to work together, like healthcare, settled at a rate of 80%. The AAA, cognizant of its high settlement rates, works hard to move each case fairly and efficiently, leading to earlier less expensive settlements for the parties. In fact, the median AAA fees plus arbitrator fees on settled cases were just $3,250.


Energy 68%
Healthcare 80%
Financial Services 68%
Technology 72%
Telecom 65%

FACT: Some large complex cases were awarded in 5 months or less.

Business to business arbitration users depend on the AAA for speedy resolution of disputes. A critical component of AAA arbitration is helping parties customize the process. While some add litigation-like procedures that lead to a time-consuming process, most adhere to the arbitration's original intent for a fair, fast and efficient resolution their dispute.

Fastest to Award

Energy 4.3 months
Healthcare 4.5 months
Financial Services 4.8 months
Technology 3.5 months
Telecom 4.4 months

FACT: Billion-dollar and bet-the-company cases trust arbitration.

With high stakes cases, transaction costs increase rapidly. In business, time is money. While every large complex case exceeded $500,000 in claims, several of these AAA cases reviewed included $1 to $5 billion. These parties know that arbitration works for high-profile, high-stakes cases.

Saving Time & Money in Arbitration: Tips for Advocates

| No Comments

Saving time and saving money continue to be important reasons why attorneys and their clients use arbitration. However, when it comes to realizing these savings, users of the arbitration process often see the arbitrator as the sole agent responsible for delivering economy and efficiency. The arbitrator's role in this regard, while important, is only part of the picture. There are many things party advocates can do to assist the arbitrator in delivering an economical and efficient process for their clients.

The starting point is the advocate's mindset. It is important that attorneys approach the process with an "arbitration mindset" rather than a "litigation mindset." Challenging the "litigation mindset" is not easy, but here are a few things attorneys can do that will help.

These include:

1. Proactively collaborate with arbitrators to promote process choices that lead to efficient and economical arbitration proceedings.

2. Ask the arbitrator to intercede whenever proposed changes to rules or procedures threaten the efficiency and economy of an arbitration proceeding.

3. Do not rely on litigation procedures to form a framework for arbitration but rather capitalize on arbitration's flexibility to bypass such procedures and ensure an efficient and economical proceeding for their clients.

4. Actively seek the arbitrator's guidance regarding their case presentations for ways to make the process more efficient and economical when compared to litigation.

Closely associated with challenging the "litigation mindset" is a need to move away from reliance on extensive (and expensive) discovery. There is no statutory or common law right to discovery in arbitration. Therefore, there are several things arbitration advocates should do to minimize discovery to the greatest extent possible.

These things include (but are not limited to) the following:

1. Vigorously adhere to the principle of limited discovery in arbitration.

2. Intentionally encourage/require client participation in discovery discussions.
3. Passionately pursue what your client needs, not everything you may want.

4. Diligently avoid interrogatories and requests for admissions.

5. Earnestly follow the notion that witnesses should only testify once, and that is at the evidentiary hearing.

6. Conscientiously avoid fishing expeditions.

Next up in the effort to save time and money in arbitration is considering whether motion practice is a help or hindrance. The prevailing view of motion practice in arbitration is that motions likely to expedite or facilitate the proceedings are acceptable. Motions likely to be unproductive are strongly discouraged.

When it comes to motion practice, advocates should consider the following:

1. Arbitrators have the authority to consider any form of motion-including issues of arbitrability--and to grant any from of relief, subject to limitations imposed by the parties' arbitration agreement, applicable rules, or law.

2. Arbitrators have authority to consider any type of motion and have the discretion to grant any form of relief that the arbitrators deem just and equitable and within the scope of the agreement of the parties.

3. Advise the arbitrator of your intentions regarding motions--imminent and prospective--as early as possible.

4. Seek the arbitrator's permission before presenting motions.

5. Be very selective when contemplating filing motions. Generally, file only motions likely to promote efficiency and economy.

6. Refrain from filing motions likely to be unproductive.

Let's look at a number of specific motions to gain a little more insight into their efficacy in the context of arbitration.


AAA rules [Commercial R-32(b), Construction 32(b), Employment 30] explicitly give arbitrators the authority to bifurcate arbitration proceedings. Arbitrators will typically only allow bifurcation after deliberate forethought and discretion.

When weighing whether to file a motion for bifurcation, it is important for an attorney to understand that arbitrators may consider some of the following factors in determining if it should be granted:

• Whether substantive issues in the arbitration are significantly different from each other or significantly complex to justify bifurcation.

• The amount and type of evidence needed to support each issue.

• Whether the evidence necessary for a later phase will overlap or will be mutually exclusive.

• Whether the evidence necessary for a later phase of the hearing will be prejudicial or inflammatory.

• Whether evidence necessary for a later phase of a hearing is sensitive.

• Whether resources will be conserved by bifurcation or would increase costs with multiple phases.

• Whether a second phase of the arbitration will be voluminous.

• The effect that bifurcation may have on discovery (if allowed).


Postponements are the primary cause of delay in commercial arbitration cases and the chief frustration of arbitrators and parties. Prior to filing a postponement request a party should first contact the other party (or parties) involved to see if
they have any objection to the request. Generally, arbitrators will strongly discourage requests for postponements and will only consider them when good cause is shown. It is up to the arbitrator's discretion to determine what constitutes "good cause." If granting a postponement, arbitrators will generally reschedule the hearing for the earliest possible date.

Factors considered by arbitrators when weighing whether to grant or deny a request to postpone a hearing include, but are not limited to:

• The reasonableness of the request, i.e. are the supporting reasons sound?

• The comments of the other party or parties opposing the request.

• Whether granting or denying the request will be prejudicial to any party.

• The number of prior postponements, whether mutual or unilaterally requested.

Arbitrators must also consider whether denying a postponement request could be interpreted as "misconduct" sufficient to warrant vacatur of the final award as provided for in Section 10 of the Federal Arbitration Act (FAA), i.e. "Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown..." The Uniform Arbitration Act and many state arbitration statutes contain a similar provision.

Limiting Testimony

AAA rules [Commercial R-34(b), Construction 33(b), Employment 30] provide that arbitrators have the authority to determine the admissibility, relevance, and materiality of the evidence offered and may exclude evidence deemed by the arbitrator to be cumulative or irrelevant. If a party's advocate cannot demonstrate that such testimony would be unfairly prejudicial, such requests to limit testimony on the basis of prejudice will generally be denied by the arbitrator. Section 10(a) of the FAA provides that refusing to hear evidence "pertinent and material to the controversy" is a ground for vacating the award.

Efficient and economical ways of presenting expert testimony in arbitration include:

• Have expert witnesses meet before the hearing to prepare a list of those points on which they do and do not agree so they can focus on points in dispute.

• Having both experts available for simultaneous questioning. This can greatly enhance the arbitrator's ability to understand, analyze and make decisions.

• It may be possible to conduct the joint examination of the experts after the arbitrator has received the experts' reports and before any other testimony is taken.

Asserting a Counterclaim

Under all of the AAA's arbitration rules, no new or different claim or counterclaim may be submitted without the consent of the arbitrator after the arbitrator is appointed.

Party advocates need to be aware that factors considered by arbitrators when deciding whether to allow new or different claims or counterclaims include, but are not limited to:

• Will allowing the claim/counterclaim be prejudicial to the other party?

• Will NOT allowing the claim/counterclaim be prejudicial to the requesting party?

• Will allowing the claim/counterclaim promote judicial economy and fairness?

• Is the request substantive or put forth for the purposes of delay, etc.?

To avoid this situation, the parties and the arbitrators should consider including--as part of the Preliminary Hearing Scheduling Order--that the parties submit terms of reference, i.e. a statement of the issues that the parties feel the arbitrator must decide.


Arbitrators may impose sanctions if empowered to do so by the parties' arbitration agreement, applicable arbitration law, or applicable governing administrative rules. Absent such empowering authority arbitrators are reluctant to impose sanctions. The Revised Uniform Arbitration Act §17(d), 21(b), (c) give arbitrators the authority to grant broad relief including an award imposing sanctions for noncompliance with discovery orders. In any given case, counsel should brief the arbitrator on his or her authority to impose sanctions. Arbitrators are likely to shy away from imposing evidentiary sanctions, such as precluding the admission of certain evidence or testimony, because the Federal Arbitration Act (and applicable state arbitration statutes) provides that failure to hear material and relevant evidence can constitute a basis for vacating an award. 9 U.S. C. §10(a)(3). The AAA's Commercial Rules (amended 10/1/13) added a new section (R-58) giving arbitrators the authority to order appropriate sanctions, upon a party's request, where a party fails to comply with its obligations under the rules or with an order of the arbitrator.

While all the forgoing items do not represent the entire universe of things attorney advocates can do to help ensure arbitration is an efficient and economical process for their clients, each is an important and effective step in the right direction.

Two Upcoming CPR Events - Wednesday, July 29, 2015

| No Comments

"The CPR Screened Selection Process for Party-Appointed Arbitrators" from 8:30-9:30 am at Jenner & Block LLP. The program will be followed by a networking reception. Note that this program is also available via webcast if you cannot attend in person.

Information and registration at http://www.cpradr.org/EventsEducation/UpcomingEvents/CPRScreenedSelectionProcessEvent.aspx

Y-ADR Seminar on "Choosing arbitration or litigation to resolve disputes: in-house counsel perspectives" at Sidley Austin LLP from 6-7:30 pm. The program will be followed by a networking reception. Y-ADR is CPR's Program for young attorneys in dispute resolution.

More information and registration at http://www.cpradr.org/EventsEducation/Y-ADR.aspx

How to Become a Successful Mediator

| No Comments

By Bennett G. Picker, AAA Mediator

The following Keynote Address was delivered by Bennett G. Picker at a conference in Florence, Italy organized by the newly launched Florence International Mediation Chamber and the International Mediation Institute.

July 2015

I have a passion for many things in life, including a passion for family, for travel and for mediation. So, to be here with my wife in Florence, one of my favorite cities in the world, together with a community of mediators, is an absolute pleasure.

The theme of today's conference is "Succeeding in Mediation." The simplest definition of mediation is "facilitated negotiations by a trusted individual." If I had to define mediation in only one word, my word would be "opportunity." The process offers the parties an opportunity to telescope issues in hours that might take years in litigation, to forge solutions based upon underlying interests, to preserve relationships and, quite obviously, to avoid the time, expenses and distractions of litigation. Opportunity will be the focus of my comments today - the one that exists for disputants and for each of you in the audience who aspires to a career as a mediator.

More specifically, Mike McIlwrath has asked me to speak on the topic "How To Become A Successful Mediator." Implicit in this topic are two questions. The first question: "What are the keys to becoming a highly skilled mediator?" As many of you know, mediation work flows to mediators with the best reputations for skill and experience. This is very much unlike law practice where work typically flows to attorneys based upon relationships. It is quite acceptable for an attorney to refer work to colleagues within the firm. In contrast, mediators are members of a solitary profession and need to continue to perform on their own at the highest levels to assure a continuing flow of work. The second question: "What are the keys to building a successful mediation practice?" Even the best mediators spend a great amount of their time developing new business opportunities.

I. The Changing Landscape Of Mediation

Before exploring these questions, however, I think we need to take a look at the competitive environment - the ever changing landscape of mediation. And I think this is why Mike asked me to speak today - because I am old enough - to have been around at the dawning of the creation of commercial mediation.

I started practicing law in the late 1960's as a trial lawyer in business disputes. At that time, the world of dispute resolution, at least in the Anglo-Saxon world, looked about the same as it had 700 years earlier when the jury trial replaced trial by ordeal and trial by combat.

In the late 70's and early 80's the world of dispute resolution changed dramatically. You have all heard of the phrase a "perfect storm." I like to describe what happened in the late 70's and early 80's as a "perfect rainbow." In a period of not much more than five years, we saw the convening of the Pound Conference in 1976 which Michael Leathes, the founder, and Deborah Masucci, current Chair of the International Mediation Institute, have called the "Big Bang of ADR." Leading scholars and judges met at the time in America to discuss increasing dissatisfaction with judicial system and insufficient access to the courts.

In this period, we also saw beginnings of tort reform. Not in a political sense. But corporate counsel were beginning to assume far more responsible roles within their companies and they began to look for faster, better and cheaper solutions to business problems.

In this period Fisher & Ury wrote "Getting to Yes," popularizing interest-based, "win-win" solutions. Especially in business disputes, many began to see the potential for business solutions in mediation that are unavailable in litigation and arbitration.

We also saw the founding of the International Institute for Conflict Prevention & Resolution (CPR) formed by America's leading corporations, banks and insurance companies for the purpose of institutionalizing ADR in corporate and law firm settings. To the extent that within only decades it was commonplace to see mediation provisions in contracts, as a part of court-annexed mediation programs, in government programs mandating ADR and to see the use of mediation on an ad hoc basis, much of this growth was due to the initiatives of CPR.

Fast-forwarding twenty years to the mid-90's, the rhetoric about mediation far exceeded its actual use in commercial disputes. By then, my problem-solving approach to life and law led me to become a reformed trial lawyer - a mediator. During this timeframe, I spent a fair amount of time educating others who wished to become mediators. While many were beginning to understand the benefits of mediation, many others could not intelligently describe the difference between mediation and arbitration. I continually was asked "how do we know that mediation won't result in a binding result." Some could not even explain the difference between mediation and meditation. On one occasion I gave a lecture on "ADR" and several individuals walked out of the room within the first few minutes. I later saw one of them in a hallway and asked why he left. The response: "I thought I was attending a lecture on "American Depository Receipts." At the time, ADR was still mostly unexplored terrain.

Fast-forwarding through the next twenty years to today, we have seen a substantial rise in the use of mediation. In America, in jurisdictions such as Texas, California and Florida, almost every case is mediated. Florida alone has over 8,500 state court certified mediators. Yet, there is still resistance to mediation in many parts of America and the full promise of the process has not been realized. Some of the resistance comes from law firms which see mediation as a threat to the all-important litigation profit center within the firm. Within corporations there is a great deal of lack of awareness and inertia. And while some companies have champions for ADR and mediation, when she or he leaves the company, that company is often left without any culture of appreciation for ADR.

With the advent of the Woolf Reforms in the late 1990's, we have seen the rise of mediation in countries such as England and New Zealand and today we are seeing progress from Singapore to the Netherlands and from Australia to Argentina. Yet, with EU Directive and even the recent Reboot, mediation remains stalled in most of Europe. Giuseppi de Paolo, well known to most of you, has talked about the "European Union Paradox" - the existence of a highly acclaimed, efficient and effective process that very few people use. The good news: With the IMI and others participating in today's conference including Florence, Singapore, the AAA, CEDR, JAMS and the ICC, and with the upcoming Global Pound Conference in 2016, we can begin to see a greater promise for mediation worldwide.
What does all this mean for any of you who want to be mediators? In one word - "opportunity." And that's my story. I started over 25 years ago, as one of 10 or 15 individuals in my region seeking work as a mediator. Today, in a community of almost 20,000 lawyers, there are probably close to 300 or 400 individuals looking for work as a mediator. Regrettably, as my jurisdiction is one that does not yet fully embrace mediation, the median number of cases for each of these individuals is zero - meaning more than half of those looking for mediation work get no cases in a given year.

I was fortunate to be asked to write one of the American Bar Association's first books on mediation. Today, I continue to enjoy a competitive edge I gained early on from the initial visibility resulting from this publication. This can be your story as well - especially if you are in a market where mediation is just emerging. If you are fortunate to gain recognition for skill and experience mediating in an emerging market you will have an edge that can last a professional lifetime. That opportunity exists for each one of you.

II. The Keys To Becoming A Highly Skilled Mediator

So, let's go back to the first of my two questions. What are the keys to becoming a highly skilled mediator? Let me pause and ask a question. What do you think ranks at the top of virtually every study of users who were asked "What do you look for when selecting an experienced mediator?" What does not appear in almost anyone's list is style - facilitative vs. evaluative vs. transformative. In my mind, style is like flavors of ice cream and consumers of mediation will select their favorite flavor in each next case. Also, what does not appear on the list, somewhat surprisingly, is technique, such as breaking impasse, or the use of joint sessions or one's ability to close. Fortunately, we have credible studies that can answer this question. One outstanding study was performed by Steven Goldberg and Margaret Shaw, both highly respected mediators and educators. In this study, published in CPR's publication "Alternatives," Steven Goldberg and Margaret Shaw interviewed 260 disputants and asked those surveyed what they look for when selecting an experienced mediator. Their results are confirmed by a similar study performed by the Harvard Program on Negotiation.
Here are the top five answers to the question "What do consumers look for when selecting a mediator?"

1. Honesty, Integrity & Trustworthiness
Some comments:

• "Both sides trusted that the information she relayed was completely accurate"
• "We had absolute confidence that he would not reveal information we wanted to remain confidential"

2. Relational Skills, Friendliness, Empathy
Some comments:

• "Because of his sincerity we kept talking and we committed to the process"
• "She demonstrated compassion for the client, making the client feel she was working hard on its behalf. So we tried even harder."

Roger Fisher, a few years after co-writing "Getting to Yes," wrote an outstanding law review article on the sources of negotiating power. Near the top of his list was the power of a good relationship. Understanding this, what I do and what many of the best mediators do, is meet privately with the decision-makers before any joint session. I usually insist that we talk about anything other than the dispute and if I do it right the participants may even show me pictures of their children or grandchildren. By taking this approach, the process of building a relationship and creating trust has begun even before an initial joint session.

3. Preparation

I once gave a lecture at the Advanced Mediation Training Program of the ABA on the "The Three Keys to Success in Mediation." I began by stating that the three keys to success are "preparation, preparation, and preparation." We often talk about the importance of preparation. But we don't talk nearly enough about the various steps mediators can take in advance of a mediation session to prepare themselves, the parties and their lawyers for the most productive session possible. Preparing one's self and preparing the parties involves exploring the barriers and drivers of resolution, digging deep for the underlying issues and interests and also involves a great deal of teaching and coaching. As preparation is one of the subjects that will be discussed this morning in one of our Panel Sessions, I will leave this topic for the Panel.

4. Nuanced Understanding Of Process

Skilled and experienced mediators understand that mediations are not only about the parties' positions, but also the problem and the people in the room. They recognize the need to uncover the cognitive barriers that may distort rational assessments such as selective perception, advocacy bias, and assimilation bias, among others. They understand the relational barriers to settlement. Among these barriers are the differences between various representatives of the parties attending a mediation session such the CEO, the CFO, the General Counsel, and the line manager most involved in dealings giving rise to the dispute. As just one example, in many of my mediations, one side with a reasonably strong position will ask "Don't they understand our position?" or "Don't they understand their weakness?" Of course, in many cases they do understand but have difficulty getting on the same page. In these situations experienced mediators often will conduct intramural mediations to obtain consensus among the various representatives of one party. Experienced mediators also understand the critical importance of exploring differences between parties and their counsel. Barriers to resolution can be created by attorneys initially creating overreaching expectations or by the unwillingness to deliver bad news to the client. Many times counsel have said to me "thank you for telling my client what I could not say. I started down that road and my client said if you don't believe in my case, I may need to find another lawyer." Other examples include lack of good communication or an interest in the fee. Professor Gerry Williams, a noted scholar and student of negotiations, studied the settlement behavior of twenty-two lawyers for seven years and concluded that the top reason cases failed to resolve by settlement was a disconnect between the lawyer and the client.

5. Tenacity: The Best Mediators Never-Give-Up

Too many mediators see impasse too early and may quickly jump to a mediator proposal or simply give up. In fact, "impasse" often is not real. It is postured. Even if an impasse is real, skilled mediators understand that this is simply a reason for another conversation or for another road to be traveled. Even if dispute does not resolve in a mediation session, the best mediators persist - they never give up.

III. The Keys To Building A Successful Mediation Practice

The second question, of course, is "What are keys to building a successful mediation practice" - the business equation. Most importantly there is no one way - one needs to be authentic. And unlike mediation skills, there is no survey of which I am aware. So, I conducted my own informal survey contacting highly skilled and experienced ("successful") mediators from the United States, England, Scotland, France and New Zealand. Here is our consensus opinion of the best ways to build a mediation practice.

1. Training

At the top of almost all of our lists was the need for training which is essential to mediation skills development. Many engage in mediation without training and, while much of the process is intuitive, that in our view would be a mistake. Equally important, consumers of mediation who select mediators make the assumption that those who have had training are more likely to have greater skill.

2. Especially If You are Beginning a Practice, Look for Every Opportunity to Become Involved in Mediation

Look at opportunities to become engaged in the activities of community mediation clinics, pro bono programs and court programs. Or shadow an experienced mediator.

3. Tell People What You are Doing - Put Yourself Out There

Send emails to colleagues. Take the time to create a good mediator bio - go on the website and look at the bios of other successful mediators to see how they describe their experience and background. Create a website and consider placing on your website videos where you talk about your approach and style. Finally, consider the use of social media including possibilities such as LinkedIn and even Twitter.

4. Participate in ADR Organizations with No Barriers to Entry

Networking is one of the keys to success. It's important to engage with others whether it be in bar associations, trade associations, ADR associations or Chambers of Commerce.

5. Find a Niche

This one is somewhat controversial. When I started as a mediator, the conventional wisdom was that process expertise was most important. In my view, that view is still correct. However, consumers of mediation today are looking for subject matter expertise, especially in disputes involving issues of intellectual property, construction, and employment. Also, from a marketing perspective, you are most likely to obtain initial work in the field where you have your expertise. So, for example, if you are an IP lawyer, after you have had training and some experience, and contact your colleagues who are IP transactional and litigation lawyers, let them know of this experience and your interest in mediating IP disputes. This is where you are most likely to get work - in your own field - and of course, in
time, you can expand to other fields.

6. Consider Writing a Pop Article

By pop article I mean 1500 or so words without footnotes. There are so many places today where publications is not difficult including, for example, "mediate.com" which publishes several short articles each week. The importance of writing an article is not so much that people will read the article. The power of an article is more in the reprints you can send to those who might consider using you as a mediator. While after writing an article you may not have any greater expertise in your field, the perception - which is the reality - is that you are an expert. This was true for me. It was when I started writing about mediation that my practice began to take off.

7. Commit

Too many see mediation as a part-time career or a career compatible with retirement. However, in order to be successful one needs to commit to a sustained effort which may take years. If you have a passion for the process and persevere, while it may take years, you will have your best chance of success.

8. Take a Risk - And This May Be Difficult

Once you begin to get some flow of work, there may come a time when you will want to consider taking a risk and crossing the bridge from law practice to full-time mediation. For me, it was when I crossed the bridge to full-time mediation that my practice began to take off. However, as work usually develops slowly, one needs to consider the risk carefully.

For those of you who would like to follow up with additional marketing suggestions, I recommend a book written by one of my colleagues in the IAM, Jeff Krivis, who wrote a book entitled "How to Make Money as a Mediator (30 Top Mediators Share Secrets to Building a Successful Practice)." Full disclosure: I am one of the 30 mediators; however, I receive no royalties from the book. The book answers questions such as:

• "Can I be a neutral in a law firm?"
• "Should I join a Panel?"
• "Can I be successful if I'm not a lawyer?"
• "How should I charge?"

Also, I commend to you the most recent edition of the ABA Dispute Resolution Magazine which contains several articles for those who are beginning to plan for a future in the field of mediation.

IV. The Future Of Mediation Internationally

What does the future hold for mediation internationally? First, a caveat. Predications for the future are precarious. I am reminded of Harry Warner, the co-founder of Warner Brothers, who in the late 1920's said "No one will ever want to hear actors talk." Also, Thomas Watson, one of the founders of IBM, who once said "I think there's a world market for, maybe, five computers."
With this caveat, I strongly believe the future offers great promise for mediation internationally. With the internet and in an increasingly global marketplace, I believe we will see a dramatic rise in the mediation of disputes internationally. There will be a greater opportunity for those who want to enter the field, especially for those with strong language skills and those who are trained in managing cross-cultural disputes. I suggest you take a look at the IMI's Inter-Cultural Qualifying Assessment Programs.

Cross border disputes involve significant cultural issues. As just a few examples, in some cultures it is important to save face; various cultures have different assumptions about good faith, and in some cultures the impact of religious beliefs play an important role on decisions.
I believe the future also offers great promise for non-traditional jobs such as ombuds, settlement counsel, in diagnostics, systems design (I would note the newly conceived process of "Guided Choice"), corporate coaching and consensus building, just to name a few.
The future is also likely to allow for individuals to enter the field at a much earlier stage in one's career. I believe California is a good example of this phenomenon as many of the best mediators in California are, in contrast to the East Coast, in their 40's, many having entered in their 30's. Choosing an ADR career at a young age is an option today's more senior lawyers never had. Those of you looking to work full-time in mediation early in your legal career may want to consider working as a case manager, an outreach coordinator, an administrator or a full-time mediator in a court program or with a governmental agency.

I believe that certification of mediators will become more the rule and less the exception. Here, the IMI should take great pride in being THE world leader on this issue.

I envision technology playing an ever-increasing role in what we do - with new opportunities ensuing as a result. Here are just a few startling facts. EBAY and PayPal are resolving 60 million disputes a year through quick online resolution - where algorithms and crowd sourcing matter more than issues of jurisdiction or law. For mediation, platforms allow for custom intake, online negotiation, file sharing and video conferencing. Just last week, I spoke with Colin Rule who is truly the guru of online ODR (Online Dispute Resolution). Colin predicts that this year over 700 million disputes will be resolved online and that number will increase to in excess of 1 billion by 2017. And he says there will definitely be a meaningful role for mediators.

Regardless of what changes may be in the wind, we need to embrace change to survive as a profession or, to paraphrase Professor Frank Sander of Harvard, our profession may be killed by the status quo.

V. In Conclusion

I would like to conclude with three thoughts.

First, developing a mediation practice is not a sprint, it's a long distance run. But those who have a passion for the process and who persevere will have the best chance of success.
Second, Stephen Hawking, the brilliant physicist and author, once wrote "For millions of years, mankind lived just like animals on the planet. Then something happened which unleashed the power of imagination. We learned to talk. We learned to listen. Speech has allowed the communication of ideas - enabling humans to work together to build the impossible."

Hawking's words are lofty. But for mediators . . . facilitating communication, bringing people together, and helping them to learn from each other is the very core of what we do. And most of us are convinced that the growth of mediation worldwide is not "impossible," it is inevitable.

I, for one, am encouraged by the collaboration we can see right here in Florence, by the MOU's signed yesterday, and by the promise of the IMI's Global Pound Conference. Given this unprecedented collaboration, I believe we will see a dramatic growth of mediation internationally in the not-too-distant future.

Construction arbitrations have become more complex in recent years, and, through focus groups held across the country, users of the AAA® Construction Arbitration Rules have communicated their preference for a more streamlined, cost-effective and tightly managed process.

Working with its National Construction Dispute Resolution Committee (NCDRC), composed of a diverse group of leading construction industry and related organizations, the AAA received input from all industry sectors. These revised Rules further align the AAA Construction Rules with most construction industry contract documents.

Significant focus was placed on the need for effective management of the arbitration process, and hence the revised Rules provide arbitrators with additional tools and authority to do so.

The revisions include:

•A mediation step for all cases with claims of $100,000 or more (subject to the ability of any party to opt out).

•Consolidation and joinder time frames and filing requirements to streamline these increasingly involved issues in construction arbitrations.

•New preliminary hearing rules to provide more structure and organization to get the arbitration process on the right track from the beginning.

•Information exchange measures to give arbitrators a greater degree of control to limit the exchange of information, including electronic documents.

•Availability of emergency measures of protection in contracts that have been entered into on or after July 1, 2015.

•Enforcement power of the arbitrator to issue orders to parties that refuse to comply with the Rules or the arbitrator's orders.

•Permissibility of dispositive motions to dispose of all or part of a claim or to narrow the issue in a claim.

About the ADR Providers

| 1 Comment

By Deborah Masucci

American Arbitration Association or AAA

The AAA is a not for profit offering mediation, arbitration and other neutral services. They are the largest administrator of alternative dispute resolution services worldwide. The AAA offers specialty rules for sectors such as commercial, construction and labor/employment. Their website contains educational tools for users that provides options for drafting clauses and other important information. The AAA also trains thousands of neutrals and advocates each year.

The AAA provides services in the U.S and abroad through the International Center for Dispute Resolution (ICDR). Its headquarters is in lower Manhattan but they have twenty offices throughout the U.S. The AAA established Mediation.org in 2013 to focus its efforts on mediation.
The AAA offers education to mediators and arbitrators through AAA Education Services.

CPR or International Institute for Conflict Prevention and Resolution

CPR was formed in 1979 bringing together Corporate Counsel and their firms to find ways to lower the cost of litigation. CPR was the first to develop an ADR Pledge©. Today, this Pledge obliges over 4,000 operating companies and 1,500 law firms to explore alternative dispute resolution options before pursuing litigation.

CPR's membership comprises executives and legal counsel from global companies and law firms, government officials, retired judges, highly experienced neutrals, and leading academics. Through their numerous Committees and Task Forces, CPR uses the expertise of these legal minds to develop rules, protocols, white papers and other tools to more effectively resolve conflict.

CPR is best known as a think tank that publishes books and best practices that are models in the dispute resolution field. They have a newsletter called "Alternatives" that previews many of the changes.

Until recently CPR's model was to offer non-administered rules. They developed rules and a list of mediators and arbitrators but it was up to the parties and the panel to administer the case. CPR will serve as billing agent for matters filed under the non-administered rules charging the parties on an hourly basis.

On July 1, 2013, CPR launched its administered rules targeting complex commercial disputes. The rules provide for party appointment of arbitrators but the Chair must be from the CPR arbitrator panel. Several companies have included the administered rules in clauses but CPR has not yet had a case filed that elects the new rules. In one case the filing party initially decided to use the Administered Rules but in the end the case used the Global Accelerated Commercial Rules due to the date of the clause.

JAMS - The Resolution Experts

JAMS was founded in 1998 by combining a California based dispute resolution provider named Judicial Arbitration and Mediation Service and an East Coast dispute resolution provider named Endipute. Some JAMS neutrals have an ownership interest in JAMS and take part in the management and direction of the Organization. Historically, JAMS is known for having a panel primarily comprised of retired federal and state judges because of its roots in California. By combining with dispute resolution providers like Endispute and active recruitment, JAMS has expanded its panel to include attorneys that do not have prior judicial experience and neutrals that do not serve full-time. Similar to the AAA, JAMS resolves disputes involving a myriad of subject matters including business/commercial, construction, and disaster recovery. The majority of JAMS filings are resolved through mediation; however, it has a robust arbitration practice.


ARIAS•U.S. is a not-for-profit corporation that promotes improvement of the insurance and reinsurance arbitration process for the international and domestic markets.
They are promoting mediation, however most disputants in the reinsurance arena want a resolution and not a compromise. Most cases are resolved by a handful of arbitrators. Most of their arbitrators are former senior executives with carriers.


Since 1968, the National Association of Securities Dealers, Inc., now known as the Financial Industry Regulatory Authority, has sponsored an arbitration program to facilitate the resolution of disputes between customers and members, as well as intra-industry disputes. The primary goal of the program is to offer the investor an inexpensive, fair, and expeditious method to resolve disputes with members. Investors file the majority of cases at FINRA. Most investor claims are either filed under FINRA rules or a program administered by FINRA. Look at the FINRA website for a list of the exchanges whose rules are administered by FINRA.

(from Covington's website)

LONDON, July 23, 2015 -- Covington has launched a new arbitration resource designed specifically for Apple iOS/Android phones and tablets -- 'The Arbitration Handbook'.

The app compiles over 90 resources (arbitral rules, treaties, national laws and guidelines) commonly used in international arbitration into one convenient electronic resource, while enabling users to bookmark and annotate the content. Complete with a search function across its entire content, the app will be regularly updated to reflect the shifting landscape of arbitral rules around the world. The app is available from Apple's App Store and Google Play free of charge.

"The legal community needs to be apprised of developments in the field of international arbitration and we felt that in light of the rise of mobile and tablet use, an app would be a convenient way of doing so", said Marney Cheek, partner and co-chair of Covington's global arbitration practice. "The Arbitration Handbook will be an easily accessible, consistently up-to-date resource for practitioners globally."

Stephen Bond, senior of counsel in the firm's London office, notes "I call the app the Covington Arbitration Hand-E-Book. Infinitely handy, I'm confident that most arbitration professionals will download the app, and no client should ever again be charged for counsel digging out these key resources."

Jeremy Wilson, an international arbitration partner in London and co-chair of the European litigation practice, added: "Having had the opportunity to use the app internally, we are excited to share this useful tool with our friends and colleagues in the arbitration community."

For Apple users The Arbitration Handbook can be found at the Apple App Store by clicking here: https://appsto.re/gb/Mn1x8.i

For Android users The Arbitration Handbook can be found at the Google Play store by clicking here: https://play.google.com/store/apps/details?id=uk.covington.arbitrage&hl=en

Mediations Increase at AAA Due to Rule Change


By Jeffrey T. Zaino, Esq.

In October 2013, the American Arbitration Association (AAA) amended the Commercial Rules and made a number of changes. The rules had not been amended for several years. One significant change to the rules was to add the new Rule 9 requiring mandatory mediation for cases where a claim or counterclaim exceeds $75,000. The addition of this rule has had a positive impact with respect to encouraging both mediations and settlements.

Rule 9 reads as follows:

In all cases where a claim or counterclaim exceeds $75,000, upon the AAA's administration of the arbitration or at any time while the arbitration is pending, the parties shall mediate their dispute pursuant to the applicable provisions of the AAA's Commercial Mediation Procedures, or as otherwise agreed by the parties. Absent an agreement of the parties to the contrary, the mediation shall take place concurrently with the arbitration and shall not serve to delay the arbitration proceedings. However, any party to an arbitration may unilaterally opt out of this rule upon notification to the AAA and the other parties to the arbitration. The parties shall confirm the completion of any mediation or any decision to opt out of this rule to the AAA. Unless agreed to by all parties and the mediator, the mediator shall not be appointed as an arbitrator to the case.

The AAA saw a 51% increase in commercial mediations from 2013 to 2014 and a large increase in clients opting to mediate after initially filing for arbitration. In 2014, 61% of AAA business-to-business cases were resolved prior to going to award and 43% of those cases were resolved so early that they incurred no arbitrator compensation. There is a clear link between Rule 9 and increases in the AAA mediation caseload and settlements on cases initially filed as arbitrations.

Though the parties can opt out of Rule 9, the rule has increased positive mediation dialogue between the AAA, parties and counsel. The rule eliminates the "perception of weakness" concern that some parties and counsel may have about merely starting the conversation about mediation. Mediation is now being deemed an important "step" in the arbitration process with the ultimate goal to potentially reach early settlement and avoid a costly arbitration process. Some parties are even opting for a two track process to conduct a mediation session while simultaneously keeping the arbitration process going.

The International Centre for Dispute Resolution (ICDR), the international branch of the AAA, also amended its rules on June 1, 2014 to include discussion about mediation. Article 5 of the amended rules reads as follows:

Following the time for submission of an Answer, the Administrator may invite the parties to mediate in accordance with the ICDR's International Mediation Rules. At any stage of the proceedings, the parties may agree to mediate in accordance with the ICDR's International Mediation Rules. Unless the parties agree otherwise, the mediation shall proceed concurrently with arbitration and the mediator shall not be an arbitrator appointed to the case.

It is anticipated that this addition to the ICDR rules will also increase mediations.

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

About this Archive

This page is an archive of entries from July 2015 listed from newest to oldest.

February 2015 is the previous archive.

August 2015 is the next archive.

Find recent content on the main index or look in the archives to find all content.



Powered by Movable Type 5.11