What's New
(3/16/10)
Keith Seat
A bankruptcy court in New York imposed penalties for mediating in bad faith on a party the court found to be rigid and obstructionist during court-ordered mediation. The court recognized that of course parties cannot be forced to settle and may take a “no pay” position. But mere attendance without active participation is not sufficient for good faith. Sending representatives who would not consider the risks involved and who could only repeat a mantra that they would pay nothing renders mediation futile and forms the basis for penalties for obstruction of the mediation. Party representatives must have full authority to settle; having to telephone for additional authority is not sufficient. The offending party did ultimately make a settlement offer, but only after the threat of sanctions, and the offer was considered to be insincere by the mediator and other party. Under the mediation rules of the court, mediators are required to report incidents of bad faith mediation, and are permitted to provide information under the court’s confidentiality provisions.
In re A. T. Reynolds & Sons, Inc., No. 08-37739 (U.S. Bankr. S.D.N.Y. February 5, 2010)
Pink Floyd, EMI Need Creative Negotiation In Brawl Over Itunes Royalties (3/15/10)
Lee Jay Berman Pink Floyd is suing its former record label EMI over how royalties are calculated on internet sales. Among other things, the band is contesting whether its 1999 contract allows sales of individual tracks, as EMI contends, or mandates only complete album sales, which is how Pink Floyd interprets the contract. “When Pink Floyd’s latest contract was crafted in 1999, iTunes didn’t even exist.”
Elegant Solutions: Lessons from the Farmer-Lender Mediations of the 1980s (3/12/10)
Stephen Erickson In the case of mortgage foreclosure, laws that allow the lender to collect the debt by foreclosing on the security pledged are a workable and predictable system of conflict resolution. However, when unforeseen and cataclysmic events occur that cannot be controlled or predicted by either side to the original contract, application of the usual legal remedies may prove unworkable. In the case of the lender/homeowner relationship, that may extend over a 30-year period, there may be occasions where it is necessary to change the terms of that contractual relationship. This was true in the case of farmers and bankers in 1985, and it is true of homeowners and their lenders today.
Preparation: The Key To Mediation Success (3/08/10)
Bennett G. Picker This article offers a list of key issues and concerns to address, in advance of commercial mediation, in order to enhance the likelihood of successful outcomes.
(1/26/10)
Keith Seat
Several bills have been introduced relating to the economic rights of automobile dealers rejected by auto makers in which the federal government has an ownership interest. Negotiations over the federal legislation has included the issue of whether arbitration or mediation might be a useful process for dealers who lost franchises. Chrysler and GM reportedly agreed to offer an arbitration process to affected dealers, but dealers have sought mediation instead.
WSJ Online (December 10, 2009)
Dispute Prevention: It's A Good Idea, Right? (1/18/10)
Larry Susskind My own take on this is that "clients" of all kinds must demand that legal service providers emphasize dispute prevention before the idea will spread as rapidly as it should.
Mediation For Small Business Disputes (1/11/10)
Erica Becks Frequently, a SBO (Small Business Owner) approaches me with a question about a debt collection or contract dispute. In cases where there is significant financial and/or legal considerations, I refer them to attorneys. However, many of these small business owners and entrepreneurs simply do not have the capital to retain an attorney. So what are their other options?
Business Divorce Mediation (1/04/10)
Richard Lutringer This article addresses how mediators can assist ordinary business owners and their counsel to resolve split-up issues more efficiently and fairly than litigation or arbitration.
Insurance Coverage: 4 Rules And 10 Tips For Policyholders (12/21/09)
John DeGroote When the big case comes in, will you be ready for it? As you work to better understand your story, lock down your documents, and brace for the PR impact, what else do you need to worry about? Unfortunately insurance coverage is often way down the list — a mistake most don’t realize until it’s too late.
Mediating Commercial Relationships (12/14/09)
Alec Wisner In mediating commercial disputes, once all of the frills are stripped away, the dispute is very typically about money. The money can evince itself in a number of ways: one side paying the other cash; one side paying the other in specific performance; one side paying the other by refraining from competing, and so foregoing potential income, and so on. But, when the dust clears, the outcome is generally that money either does or doesn't change hands.
Resolving Complaints About Irresponsible Corporations (12/07/09)
Larry Susskind Corporations are supposed to pay attention to environmental, health, safety, labor, tax, consumer protection, information disclosure, and human rights laws wherever they set up shop. But, we've all seen and heard stories about multinationals guilty of violations in far-away places. They have been charged with allowing unsafe working conditions, blocking legitimate unionization efforts; ignoring environmental and health standards, bribing officials, and turning a blind eye to human rights violations.
(12/01/09)
Keith Seat
Mediation is assisting investors who sunk upwards of $400 million in Sunwest Management’s senior housing operations before things unraveled. The law firm of Davis Wright Tremaine agreed to pay $30 million to resolve securities fraud and malpractice claims against it after five days of mediation. In addition, a federal judge has been overseeing complex mediation since last winter which seeks to restructure Sunwest into a viable entity to provide value for investors, which resulted in a $270 million offer in September. Mediation is also expected in litigation against two other law firms who did work for Sunwest affiliates.
Oregonlive.com (October 22, 2009)
(11/10/09)
Keith Seat
The Internal Revenue Service has expanded and refined its mediation program in the Appeals administrative process, which was first introduced over a decade ago. Participation in mediation is voluntary for both the taxpayer and the agency. Among other procedures set forth, the mediator will be an IRS employee trained in mediation and compensated by the agency, while the taxpayer can pay for a non-IRS mediator to join as a co-mediator and can participate in the co-mediator’s selection with the agency. If mediation does not resolve all issues, the parties may request arbitration in appropriate circumstances.
Journal of Accountancy (September 11, 2009).
(9/22/09)
Keith Seat
A University of Minnesota study shows that mediation of farm debt has dramatically increased over the last year, with a jump from 133 open cases in July 2008 to 488 cases in July 2009. In total, 2,000 mediation matters were opened in 2008, with negotiation of over $150 million in debt, and 2009 has seen significant increases. Creditors with secured debts over $5,000 against agricultural property in Minnesota are required to offer mediation prior to judgment collection, repossession or foreclosure. Farmers choosing mediation have 90-days to work with lenders to renegotiate their debts.
Business Journal (August 21, 2009); Hutchinson Leader (August 15, 2009)
(7/21/09)
Keith Seat
The Certified State Agricultural Mediation Program, administered by the Farm Service Agency of the U.S. Department of Agriculture, helps farmers resolve disputes with lenders and others in order to avoid litigation, appeals, bankruptcy and foreclosure. Legislation has been introduced to extend by five years the Mediation Program, which provides matching federal grants to 35 states.
WIBW (June 26, 2009); USDA Agricultural Mediation Program
(7/07/09)
Keith Seat
The certification process of the International Mediation Institute (IMI) is moving forward, as over 1,000 experienced mediators from 35 countries registered with IMI prior to the closing of the “experience qualification path” on June 30. About 100 mediators have completed their profiles and are now publicly searchable in IMI’s databases, and the profiles of all registered mediators are to be completed by the end of September. IMI is now moving to the next stage in which assessment programs will be developed to qualify other mediators for certification on a wider scale. IMI has been working on a global system to certify the competence of mediators since being established as a non-profit foundation in The Netherlands in April 2007 by the American Arbitration Association, the Netherlands Mediation Institute, and the Singapore Mediation Centre/Singapore International Arbitration Centre.
News Item; IMI Website
(6/22/09)
Keith Seat
Delphi Corp., General Motors Corp., the Treasury Department’s auto task force and other lenders were ordered into mediation by the federal bankruptcy court handling Delphi’s bankruptcy. The role of General Motors in funding its auto-parts supplier is a central issue. While acknowledging that good faith negotiations were occurring, the court concluded that mediation may be helpful to find a consensual resolution of the bankruptcy cases.
Bloomberg (USA) (May 22, 2009)
(6/15/09)
Keith Seat
Despite inertia, business disputes in Michigan are increasingly being resolved through mediation, rather than litigation or arbitration. However, businesses may often wait too long and participate in mediation only when directed by the court, when they could benefit by seeking out mediation sooner. It is particularly important in the current economic climate to keep down litigation costs and get a settlement in mediation rather than waiting for a later judgment that may not be collectible.
Michigan Lawyers Weekly (April 6, 2009) (Subscription Required)
Kamikaze Conflict – How Might It Damage Your Franchise System? (4/23/09)
Jeff Giddings, Lorelle Frazer This article considers the circumstances in which business franchise disputes can turn toxic. The complex nature of the relationship between franchisee and franchisor, which involves instances both of common and of competing interests, can lead to parties in conflict acting in ways which are detrimental to their own business interests in an effort to damage the interests of their franchise partner. We refer to this as 'kamikaze conflict' and explore what steps might be taken by franchisors in particular to anticipate and address such difficulties.
(4/01/09)
Keith Seat A possible last minute compromise between copyright holders and internet service providers would rely on independent mediators to help resolve internet piracy complaints. Mediation would replace an obligation on ISPs and server operators to investigate piracy complaints and bar clients from the web, which would be imposed by the revised Copyright Act. Advocates of internet freedom marched on Parliament to protest the legislation, which was set to take effect at the end of February.
New Zealand Herald (February 20, 2009)
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