Both India and China are rapidly expanding local mediation programs in order to achieve efficiencies and greater satisfaction among parties to disputes, including multi-party disputes. In the Indian state of Andhra Pradesh, High Court Chief Justice G. S. Singvhi announced that the High Court has decided to open alternative dispute resolution centers in all 23 districts in the state. A proponent of mediation, the Chief Justice urged newly-trained mediators not to be deterred by initial resistance to mediation from local practitioners. Similarly, Shanghai – China’s largest city, with over 17 million residents – plans to open alternative dispute resolution centers in every district court by the end of September, following the success of the mediation program established in 2003 in the Changning district court in Shanghai.
The Hindu (July 23, 2006); ShanghaiDaily.com (July 28, 2006)
Mediation Avoids Australian Court Battle Over Corporate Assets
An intense three-day mediation resulted in the return to Huon Corporation of business assets by the company’s managing director, Charles Shultz. Mr. Shultz had transferred the assets to private trusts while putting Huon Corporation in receivership last month. The return of the assets will enable the company to satisfy obligations to employees of its three businesses and potentially to sell the businesses as going concerns. The successful court-ordered mediation avoided a costly pending action in the Australian Supreme Court.
Party Offers to Waive Confidentiality to Prove Good Faith in Mediation
Public accusations are being traded by the Oklahoma Attorney General and the poultry industry concerning who is responsible for failing to settle a dispute over polluted waterways from claimed overuse of chicken litter as fertilizer. The Attorney General stated that his office had negotiated for years and done everything possible to avoid filing federal litigation, describing some proposed settlement terms to demonstrate that the industry was at fault for lack of resolution. In response, the industry stated its willingness to release confidential mediation information to show its good faith negotiations. Denying accusations that his public comments violated mediation confidentiality provisions, the Attorney General said he is considering the industry’s offer to waive confidentiality.
Tulsa World (July 15, 2006) (Subscription Required)
New Mediation Program for Florida Mobile Home Owners
A new mediation program has been established in Florida to resolve disputes between owners of mobile homes and mobile home communities relating to maintenance, landscaping and infrastructure. The program was launched by the Florida Manufactured Housing Association and the Federation of Manufactured Homeowners of Florida. Volunteer co-mediators will conduct the mediations, in which attorneys are not permitted to participate. Final agreements are to be circulated to all mobile home owners in the community.
Mediators Address Community Divisions After London Bombing
Fearing conflict between Muslims and non-Muslims in south Leeds following disclosure that two terrorists in the July 2005 London bombing lived in the neighborhood, the Leeds council called in mediators to help. Two large meetings were held, with thirteen mediators facilitating smaller group discussions of community members’ fears and concerns. The facilitated conversations brought out shared commitment to the community, and high levels of concern about being “invaded” by the police and media after the bombing.
Columbian Farmers and Oil Giant Mediate Successfully
A group of Colombian farmers challenged British Petroleum over an oil pipeline that the farmers claimed was devastating their farms due to soil erosion. Avoiding threatened litigation in London and potential negative publicity, the oil company successfully mediated the dispute with the farmers, agreeing to establish an environmental trust fund without admission of liability. Both sides issued statements stating they were pleased with the outcome.
A week-long mediation training for 50 participants in Liberia was organized by the American Bar Association and the US Agency for International Development as a step to help sustain the peace in Liberia. In addition, a one-day workshop on the need for mediation legislation in Liberia was organized by the United Nations and the ABA. Noting similarities between modern mediation and traditional African dispute resolution by elders and chiefs, mediation legislation is sought to institutionalize mediation in Liberia and establish uniform standards that meet international norms.
Poland Proposes Large Payments to Mediation Counsel
Draft executive regulations from the Polish Minister of Justice would provide state reimbursement for lawyers taking part in mediations that may be up to 150% of what is paid in ordinary court cases. Generous fees would encourage mediation, which only began in civil cases in Poland in December 2005, but ultimately will be set by the court.
Polish News Bulletin (July 4, 2006)
Ancient Tree Wins in Mediation; Lengthy Hearing Avoided
A successful mediation concluded with everyone smiling and a community association and the City of Guelph both able to claim victory in a mediation over issues relating to a proposed 671-acre business park. The association’s concerns over clean water preservation and protection of fisheries and trees, including a 500-year-old ironwood tree, were addressed, and construction can commence once the settlement is approved by the municipal board. The mediation avoided a full board hearing that was expected to last ten weeks.
Trial Consultants May Benefit Parties in Mediation
Parties heading into mediation often face many of the same issues as litigants at trial – including how to most persuasively present their facts and arguments – so may be assisted by jury consultants and knowledge gained from focus groups. Parties in mediation benefit from a sense of what might happen at trial in determining whether to settle and may also use a jury consultant’s information to rebut the other side. In addition, relying on a consultant prior to mediation indicates the party is prepared for either a reasonable settlement or trial.
Daily Record (June 5, 2006) (Subscription Required)
India Expands Court-Annexed Mediation
Continuing efforts to spread mediation practice throughout India, the New Delhi High Court recently opened a mediation and conciliation center at the court. Court-annexed mediation is intended to ease the burden on the court and reduce the time for resolving disputes, as the number of cases increases with industrialization and economic policies promoting new businesses.
World Bank Organizes Mediation Training in Pakistan
The World Bank’s International Finance Corporation organized a mediation skills training program in Karachi in June. The training is part of the its ongoing efforts to establish a pilot mediation program in Pakistan in cooperation with the Federal Ministry of Law, Justice and Human Rights and the High Court of Sindh. Thirty-six professionals from various backgrounds were trained by UK mediators. The Chief Justice of the High Court of Sindh praised the efforts, strongly encouraging the use of mediation in Pakistan to ease the burdens on its courts, free tied-up assets, and minimize business-stifling litigation.
The Florida Supreme Court approved a new point system for certifying mediators that is designed to replace formal education/professional-based requirements with a flexible approach more directly related to the actual mediation skills and experience needed. The Court noted that the new system is intended to increase cultural and ethnic diversity among mediators and provide parties increased choice. However, pending further input by the Florida Bar, the amended rules retain the requirement that a certified circuit court mediator (as opposed to a certified county court, family or dependency mediator) be a member of the Florida Bar or a retired trial judge. The new rules take effect August 1.
Maryland Bill Proposes Mediation of Land-Use Disputes
Developers and residents in Howard County, Maryland have resolved disputes through ad hoc mediation sessions at the urging of the County. The County Council is now proposing a bill that would permit the Council to formally recommend mediation in zoning and other land-use disputes. Action on the bill is expected this summer. Surrounding jurisdictions experiencing bitter zoning disputes are watching to see if the proposal is successful and may implement similar programs.
Party Mediating Without Insurers Present Must Pay Costs of Unsuccessful Mediation
An engineering firm has been ordered by a Florida Circuit Judge to pay the costs of an unsuccessful mediation after failing to bring representatives of all its insurance carriers to a mediation session as the court ordered. The engineering firm unsuccessfully argued that the mediator had given permission for the insurance representatives not to appear. The opposing party claimed the four days of mediation were a waste of time without participation of the major insurance carriers, and claimed costs of $100,000 for mediator fees, expert fees and catering. The judge has ordered the parties back into mediation and is waiting to determine costs until the conclusion of the mediation.
Controversy over UK Judges Acting as Construction Mediators
A pilot program in which judges will mediate construction disputes has begun in the UK’s Technology and Construction Court (TCC), despite lack of support from solicitors or the alternative dispute resolution community. Mediations may be handled either by the judge in charge of a case or another judge, with all mediating judges receiving special dispute resolution training. While critics raise concerns about the role of judges as mediators and potential damage to the court’s reputation, the TCC Bar Association supports the mediation program because participation is voluntary. The pilot program began June 1 and will continue until July 2007.
Court Finds “Binding Mediation” Term Unclear and Unenforceable
Parties to a mediated settlement agreed to submit to “binding mediation” any remaining terms that could not be worked out through further negotiation. A California court of appeals recognized that parties can agree to arbitrate any issues they cannot resolve in mediation and that the mediator was clear that the term “binding mediation” meant that he was to decide all unresolved issues. However, the court concluded that the parties had not intended arbitration when specifying “binding mediation” in this case, because some parties had substituted “arbitration” in place of “binding mediation” in one part of the agreement, suggesting that they considered the concepts to be distinct. The court also noted that separate rules for mediation and arbitration do not readily fit a hybrid approach. A concurring opinion vigorously criticized “binding mediation” as an oxymoron and discussed the disadvantages of using the mediator as an arbitrator to decide any remaining issues. Without agreement on the final procedures to resolve the dispute, the court found the entire settlement agreement unenforceable.
Mediation Enhances Confidentiality of Settlement Discussions
Concerns about the confidentiality of settlement discussions and materials in subsequent lawsuits have arisen following a recent decision in the U.S. Court of Appeals for the D.C. Circuit in In re Subpoena to the Commodity Futures Trading Comm’n, which concluded that the existence of a federal settlement privilege is an “open question” in federal courts outside the Sixth Circuit. The lack of a settlement privilege greatly increases the risks for parties attempting to resolve their disputes through direct negotiation. However, parties that rely on mediation once federal litigation has commenced are covered by federal statute, while states all have some form of legislation to protect the confidentiality of settlement communications in mediation.
First Amendment Showdown Avoided by Mediation with Wen Ho Lee
Following a successful court-ordered mediation, Wen Ho Lee, the Los Alamos scientist who asserted his privacy was improperly violated by government leaks, will receive $895,000 from the federal government and $750,000 from five news organizations whose journalists reported on the leaks. The journalists had been subpoenaed but refused to reveal their confidential sources even after being held in contempt of court and facing significant fines and imprisonment. The government insisted on not paying damages to Lee and obtained agreement that its payment would be applied only to Lee’s attorneys’ fees and taxes.
Washington Post (June 3, 2006) (Subscription Required); New York Times (May 23, 2006)
South Carolina Mandates Mediation by Cable Franchises
In legislation that took effect on May 23, South Carolina has mandated mediation in disputes in involving cable franchises. The Competitive Cable Services Act requires municipalities, counties and cable franchise operators to mediate their disputes following the alternative dispute resolution rules of the South Carolina Circuit Court.
UK Courts Impose Sanctions for Unreasonable Failure to Mediate
While UK courts strongly encourage mediation, they have been reluctant to simply order parties to mediate, and have instead imposed sanctions on litigants who unreasonably refuse to mediate, even if the party is ultimately successful in litigation. In a significant line of cases, UK courts are making increasingly nuanced decisions about whether the refusal to mediate was unreasonable, looking at factors such as the nature of the dispute, the merits of the case, whether delay for mediation would cause harm, whether mediation had a reasonable chance of success and the extent to which mediation was encouraged by the court. Some decisions have recognized that looking into whether a refusal to mediate was unreasonable may involve sensitive issues of mediation confidentiality and privilege, and note the need to avoid questions of why mediation may not have resulted in settlement.
Court Expands ADR to Include "Rock, Paper, Scissors"
A U.S. District Court in Florida denied a motion to designate the location for a deposition and instead ordered the parties to engage in “a new form of alternative dispute resolution.” Counsel and one paralegal for each side are to meet at a specified time on the courthouse steps (or other location, if one can be agreed upon) and engage in one game of “rock, paper, scissors,” with the winner selecting the deposition location. But, given the litigiousness of the parties, the court went ahead and set a date for hearing any appeals resulting from the outcome of the game.
On May 3, Vermont became the ninth jurisdiction to adopt the Uniform Mediation Act, which applies to referrals or agreements to mediate after July 1. The UMA is intended to encourage greater use of mediation by ensuring clear confidentiality protections. However, Vermont exempts mediations relating to collective bargaining relationships and disputes before the Vermont Labor Relations Board and the Federal Mediation and Conciliation Service, as well as disputes among students at schools, and other limited categories. The UMA also has been adopted in Utah, Washington, DC, Iowa, Illinois, Nebraska, Ohio, New Jersey, and Washington state. Legislation to adopt the Act is pending in Massachusetts, New York, Connecticut and Minnesota.
The Interagency ADR Working Group (see www.adr.gov), which assists federal agencies in the use of ADR, has incorporated public comments and finalized three guides relating to mediation and other forms of alternative dispute resolution: (i) Protecting the Confidentiality of Dispute Resolution Proceedings (providing practical guidance on the application of the confidentiality provisions of the Administrative Dispute Resolution Act of 1996 to federal workplace dispute resolution programs); (ii) A Guide for Federal Employee Mediators (providing practical ethical guidance and building on the September 2005 Model Standards of Conduct for Mediators); and (iii) A Guide for Federal Employee Ombuds (building on the Standards for the Establishment and Operation of Ombuds Offices issued by the ABA in February 2004). The mediation guides are designed for use by federal employee mediators within the government, but non-federal mediators may agree to follow the guides in federal mediations.
DOD Pilot Programs Use Early Mediation and Facilitation in EEO Complaints
As mandated by Congress, the Department of Defense (DOD) has undertaken a three-year pilot program seeking to enhance processes for resolving equal employment opportunity (EEO) complaints by civilian employees. Delays in addressing EEO complaints at federal agencies has been a long-standing concern. DOD has begun three pilot programs which emphasize early use of mediation and facilitation techniques to resolve allegations before they become formal complaints. In early May, the U.S. Government Accounting Office (GAO) issued a report on the first year of the pilot programs, describing their features and status and suggesting enhancements to DOD’s evaluation plan.
Mediation Sought to Harmonize Enforcement of European Securities Regulations
European Union finance ministers want European securities regulators to develop and use mediation processes to make enforcement of securities regulations more uniform within the EU. With large increases in trade and international mergers, the new mediation mechanisms are needed to resolve day-to-day supervisory disputes that result from regulators’ conflicting interpretations and overlapping regulations. The EU finance ministers would like implementation of the new mediation processes by the end of the year.
Irish Times (May 8, 2006)
No Sanctions for Breaching Mediation Confidentiality with Mere Hyperbole
The mayor of Hollywood, Florida was criticized, but not sanctioned, for breaching mediation confidentiality requirements in a court-ordered mediation with a religious group. Mayor Mara Giulianti stated in an e-mail that the opposing party was furious when not offered “the sun, the moon, the stars and mars” in the mediation session. U.S. Magistrate Judge Theodore Klein withheld sanctions due to the lack of substance in the statement, but criticized the mayor as “irresponsible and unprofessional.” The court emphasized that it would have imposed sanctions if there had been more than “sheer hyperbole.” The mayor asserted that she would never reveal anything about what happened in mediation and claimed that her statement was merely a joke in an informal communication.
On April 28, an afternoon at Harvard Law School was devoted to a “Frank Sander Conference” in honor of the man who sat happily on the front row of the classroom while 200 former students and colleagues applauded his accomplishments in effectively launching mediation and other forms of alternative dispute resolution in the American court system. In addition to recounting Sander’s contributions in dispute resolution, the conference included presentations on the future of mediation teaching, scholarship and practice.
New Florida Rules for Lawyer-Mediators
The Florida Supreme Court adopted amended rules on March 23 for members of the Florida Bar. Among other changes, the amendments broaden provisions that previously only applied to arbitrators so they now cover mediators and other third-party neutrals. Specifically, Rule 4-1.12 requires all parties in a proceeding to give written consent before any third-party neutral can act as a lawyer for anyone in that matter, and bars negotiating for employment. Rule 4-2.4 requires third-party neutrals to make sure that unrepresented parties understand that the neutral is not legally representing them. The new rules take effect on May 22.
English Courts Urging Mediation for Personal Injury and Other Claims
Updated Civil Procedure Rules encouraging mediation and other alternatives to litigation went into effect on April 6 in England and Wales. Notably, “pre-action protocols” were amended for personal injury (PI) claims to encourage negotiation and mediation, which are common for other types of claims. While there has been resistance to mediating PI cases in the UK, use of mediation is increasing and the success rate in PI cases is said to exceed 90%.
The UK Patent Office began a new mediation service in April for resolving intellectual property (IP) disputes. The Patent Office provides accredited mediators for IP disputes at a set rate of 1,000 pounds/day (in London), as well as a lengthy list of independent mediators that parties can choose to hire directly. Detailed information about the new service and various aspects of mediation is available on the Patent Office’s website. The Patent Office also provides useful model mediation procedures and an agreement to mediate.
A new international alliance launched the UK-China Mediation Centre in April, with locations in Beijing and London. The alliance is between the Centre for Effective Dispute Resolution (CEDR) and the China Council for the Promotion of International Trade. The focus is on mediating disputes between Chinese and European businesses to avoid the need for arbitration or litigation.
The rapid growth of mediation and other forms of alternative dispute resolution (ADR) in India has spurred the Indian Institute of Arbitration & Mediation (IIAM) to develop new academic programs. IIAM has announced a “Tri-Continental LL.M” program on ADR in a joint venture with Hamline University Law School. In addition to an LL.M, the program results in a Diploma in Dispute Resolution and a Certificate in Arbitration, with course work spread between Cochin, India; St. Paul, Minnesota; and the School of International Arbitration at Queen Mary University in London.
Memories of Sid Lezak Jay Folberg
Sid Lezak, the longest serving U.S. Attorney in Oregon's history (originally appointed by President Kennedy), dedicated the last 25 years of his career to furthering mediation. Sid died on April 24, 2006 at the age of 80. Sid is widely regarded as the "godfather" of mediation in Oregon. Sid was the first Chair of the Oregon Dispute Resolution Commission and a fellow in the International Academy of Mediators. In this article, Jay Folberg, Professor Emeritus and former Dean of the University of San Francisco Law School, shares his memories of Sid Lezak. In addition Jay Folberg's article, you can read more and watch a recent interview of Sid by clicking here.
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Sid Lezak: Rabbi Without Portfolio Robert Benjamin
Lezak could have been a character right out of a story by his contemporary, the great Chicago writer, Studs Terkel. An unassuming guy, who by his telling just fell into being the United States Attorney and remained through six administrations, both Democrat and Republican. He continued until his dying day to be respected by officials of every faith, race and political affiliation. He was the face of justice through some of the roughest times in our country’s history, making hard decisions and enforcing the law, without losing his bearings. For him, the rule of law was necessarily tempered by compassion and common sense. That’s what made him so exceptional, especially in this day and age. As he, himself, suggested, that’s also what drew him to practice mediation.
Experience Improves WV Mediation Program
Mediation settlement weeks have been conducted twice a year in the West Virginia Circuit Court in Kanawha County for the last ten years, and the results have improved significantly over time. The first year only 37% of mediated cases settled, while the settlement rate this April was 75%. The cases are mediated without charge by trained volunteer mediators who are licensed attorneys. The subject matters range from property disputes and automobile accidents to workplace discrimination. The Circuit Court Manager, who has seen the program from the beginning, explains that the legal community has become educated about mediation and how helpful it can be, which leads to improved results.
Feuding parties ended multiple lawsuits with mediation and a written settlement, but were soon back in court squabbling over the terms of the mediation agreement. The trial court concluded that there had been no “meeting of the minds” and invalidated the entire agreement. The Florida appellate court reversed, noting that the parties agreed on the essential terms and intended to enter into an agreement, and that the ambiguities simply needed to be sorted out by the trial court.
Appellate Mediation Expanding in California
Mediation of cases on appeal is expanding to California’s Court of Appeals for the Third Appellate District, where the court will offer mediation in civil cases it finds suitable for settlement. The court expects to conduct mediation training in June and begin the appellate mediations in the Fall. Mediators are expected to prepare and mediate for four hours on a pro bono basis, and then may charge for additional time with the agreement of the parties.
New Jersey Court Reconsidering Pay for Its Mediators
A New Jersey Supreme Court panel has moved away from last summer’s proposal to pay mediators $100 an hour for the first three hours of court-referred mediations, and is now proposing simply to shorten the hours mediators must donate. Since the program began in 2000, the first three hours have been provided pro bono by mediators, with market rates allowed for additional time. The latest proposal would reduce the pro bono period to two hours, with the important caveat that ninety minutes of the pro bono period must be spent in actual mediation, as in the past. Thus, only thirty minutes can be counted towards preparation and convening the mediation, which some do not consider a realistic period and believe will result in additional pro bono time being required. Last year nearly 7,000 cases were referred to mediation across nineteen counties in New Jersey.
In a lengthy analysis, a California appellate court concluded that when an unequal divorce settlement results from mediation, the usual presumption of undue influence should not apply. The court noted that mediation may help to minimize any unfairness in reaching settlement, while it is important to preserve the confidentiality of mediation, the basis for which the court reviewed extensively. Although the trial court did apply the presumption of undue influence and required extensive evidence from the mediator about the details of the mediation, the appellate court concluded that the error was harmless.
Congressman John Lewis Receives ABA DR Section Lifetime Achievement Award Robert Benjamin
Congressman John Lewis, long-time Georgia representative and national civil rights leader, received the American Bar Association Dispute Resolution Section's Lifetime Achievement Award at the Section's annual meeting in Atlanta (April 2006). Read about Congressman Lewis' remarkable life and watch his acceptance speech and interview!
Legislation Would Require FEMA to Mediate in State Hurricane Programs
Federal legislation (HR 4973) would require the Federal Emergency Management Agency (FEMA) to participate in the hurricane mediation programs that are under way in Louisiana, Mississippi and Florida. FEMA has refused to participate in the state programs and states lack authority to compel FEMA’s involvement. FEMA’s National Flood Insurance Program has been resolving insurance coverage disputes through its own internal processes. But determining whether damage was caused by wind or water is a key issues in many state disputes, which has motivated lawmakers to try to get FEMA into the state mediations in order to more efficiently resolve the disputes.
Utah Enacts Uniform Mediation Act with International Provisions
As expected, Utah enacted the Uniform Mediation Act (UMA) in March, bringing the total number of UMA jurisdictions to eight. Following Washington, DC’s action in January, Utah is the second to include the international supplement which incorporates the United Nations Model Law on International Commercial Conciliation. The UMA is intended to encourage greater use of mediation by ensuring clear confidentiality protections. The Utah legislation is similar to the uniform act drafted by the National Conference of Commissioners on Uniform State Laws, except for a provision expressly requiring mediators to serve in a neutral fashion. The UMA has been adopted in Washington, DC, Iowa, Illinois, Nebraska, Ohio, New Jersey, and Washington state. Legislation to adopt the Act is pending in Massachusetts, New York, Vermont, Connecticut and Minnesota.
As part of its support for returning troops, the Army National Guard offers mediation when needed to help service members return to their civilian jobs. The Guard also focuses on maintaining active support from employers to ease the transition.
Mississippi Hurricane Mediation Program Criticized
Attorney Richard Scruggs’ skepticism of the Mississippi hurricane mediation program has blossomed into critical television ads funded by his Katrina Group. The ads show Katrina victims stating that the process was humiliating and a hoax; Scruggs is litigating on behalf of Katrina victims against their insurers. Yet the Mississippi Insurance Commissioner states that the mediation program is working fine, with over 1,500 disputes brought into mediation and an 89% settlement rate. The state mediation program is offered without cost to consumers, who are free to proceed with litigation if they are not satisfied with their options in mediation.
WLBT.com (3/22/06)
Minnesota Considering Mediation of Budget Disputes
Legislation introduced in Minnesota would require the state Supreme Court to appoint a mediator to assist the governor and legislature in reaching agreement on major budget bills if the usual processes have not resulted in enactment. The governor and legislative leaders may make recommendations of mediators to the Court, which is encouraged to choose a mediator viewed as unbiased, politically neutral and experienced in state budget issues. The governor, speaker of the house and majority leader of the senate must attend the mediation in person or through a designee.
LegAlert (March 8, 2006)
Mediation Saves Teraforce Bankruptcy Plan
A February 24 mediation between Teraforce Technology Corp., its lender and a group of dissenting creditors surmounted a great deal of drama in the case and may permit a bankruptcy plan to proceed so that Teraforce can emerge from bankruptcy rather than be liquidated. Facing the prospect of very contentious litigation, participants were pleased with mediation, with counsel for the unsecured creditors’ committee concluding “it’s the closest we’re going to get to happiness.”
Daily Deal (February 27, 2006)
Court Cannot Require Mediation Prior to Enforcing Arbitration Provision
When a party to a dispute seeks to enforce a valid arbitration agreement under the Federal Arbitration Act, the court may not first order the parties to try mediation, but must send the case directly to arbitration, according to a Texas appellate court in In re Heritage Building Systems, Inc. Despite the policy of encouraging settlements, the intent of the parties in contracting for arbitration must be respected, the court emphasized, for the parties can always agree to mediate prior to arbitration if they wish. Interestingly, the court noted that once the matter is referred to arbitration, the “arbitrator may, or may not, choose to require mediation.”
Bernie Mayer Joins Werner Institute Faculty
Bernie Mayer, founding partner of CDR Associates, has accepted an appointment as Professor of Conflict Resolution at The Werner Institute for Negotiation and Dispute Resolution at Creighton University School of Law in Omaha, Nebraska. The Werner Institute was established in 2005 through an endowment from the C.L. Werner family, and is the most richly endowed program of its kind in the country. Professor Arthur Pearlstein, former General Counsel for the Federal Mediation and Conciliation Service, is the new Director of the Institute. For information about the Institute, click here.
Mediation Follows Outsourcing
Mediation is being used in place of arbitration to resolve disputes involving outsourcing contracts, due to its promptness and capacity for preserving relationships between the parties. Incorporating mandatory mediation clauses in outsourcing contracts was advocated at an international Computer Law Association in Bangalore, India in February.
Hindu (India, February 3, 2006) Article
Court-Ordered Mediation Leads to Half-Billion Dollar HealthSouth Settlement
After lengthy court-ordered mediation, HealthSouth Corp. and its insurers agreed to pay $445 million to settle investor lawsuits filed following a $2.7 billion accounting fraud at the company. If the court approves the resolution, the company will pay $215 million in stock, with no admission of wrongdoing, and its insurers will pay the rest in cash. In June, HealthSouth agreed to pay $100 million to settle Securities and Exchange Commission litigation. Fifteen executives have pleaded guilty, while another was convicted at trial. Other litigation continues against HealthSouth's former auditor, its former banker and Richard Scrushy, the company's former chief executive officer who was acquitted in June of orchestrating the fraud.
Chicago Tribune (February 24, 2006)
DC Enacts Uniform Mediation Act with International Provisions
Washington, DC became the seventh jurisdiction to enact the Uniform Mediation Act (UMA) on January 26, and the first to include the international supplement which incorporates the United Nations Model Law on International Commercial Conciliation. The UMA is intended to encourage greater use of mediation by ensuring clear confidentiality protections. The legislation is very similar to the uniform act drafted by the National Conference of Commissioners on Uniform State Laws, except for the exclusion of consumer mediations conducted by the DC attorney general. The international supplement provides that, unless the parties agree otherwise, mediations of international disputes would be governed by the UN model law. The UMA has been adopted in Iowa, Illinois, Nebraska, Ohio, New Jersey, and Washington state. Legislation to adopt the Act is said to be near enactment in Utah, and is pending in Massachusetts, New York, and Vermont. The Washington, DC legislation should take effect around April 3, following the required waiting period of 30 legislative days for Congressional review.
An insured party may not mediate and settle a case without the consent of its insurance company and then expect the insurer to reimburse it for the settlement, according to the U.S. Court of Appeals for the Fifth Circuit in Motiva Enterprises v. St. Paul Fire and Marine Ins. However, applying Texas law to standard insurance policy provisions that the insurer must consent to settlements and the insured must cooperate in any defense, the Fifth Circuit reversed summary judgment against the insured, Motiva, because there were questions of fact about its cooperation. The Fifth Circuit also concluded that to avoid covering the loss the insurer must have suffered actual prejudice by the failure of Motiva to cooperate or obtain the insurer’s consent. The appellate court sent the case back to the trial court to determine whether it was lack of cooperation for Motiva to abruptly exclude the insurer’s representative from the mediation and whether Motiva agreed to an unreasonable settlement.
Florida Opens New Mediation Center for Hurricane Claims
Florida insurance regulators opened a fifth mediation center in February to help resolve disputes among the 500,000 insurance claims resulting from the four hurricanes that hit Florida last year. Insurance companies must provide notice that homeowners have the option to mediate disputed claims. Last year, 93 percent of the 12,000 claims brought to mediation in the Florida hurricane program were resolved.
Miami Herald (January 31, 2006)
FCC Relies on Mediation for Modifying Use of Spectrum
The Federal Communications Commission’s plan to rely on mandatory mediation to help relocate users of spectrum was implemented with mediations conducted between December 27 and February 8 in the first wave of the 800 MHz band reconfiguration process. Parties that were unable to resolve all issues during the mediation will receive an FCC decision following a de novo review. Unlike mediations outside this special program, the mediator or the Transition Administrator may propose a recommended decision or provide advice to the decision-maker about unresolved matters.
U.S. Federal News (January 31, 2006) Article
Florida May Prohibit Mediation If Party Has History of Violence
Expanding beyond domestic violence cases, proposed legislation in Florida would prevent a court from ordering mediation in any case in which the judge finds that a history of violence would compromise the mediation process or endanger anyone. A party’s motion or request would trigger the court’s inquiry. The legislation is considered uncontroversial.
Auto Dealers Turning to Mediation as Dissatisfaction with Arbitration Grows
Many automobile dealers are finding the benefits of arbitration outweighed by its costs, uncertainties and lack of procedural protections. Some dealers are pleased with mediation and are beginning to rely on mandatory mediation clauses, requiring an attempt at mediation prior to initiating litigation.
Automotive News (February 6, 2006)
The Family Law Education Reform Report Completed Andrew Schepard
Does the law school’s family law curriculum adequately prepare future family lawyers for the challenges of practice? The Report’s answer is “not well,” a conclusion that requires reconsideration of the nature and purposes of legal education in an area central to the welfare of thousands of children and parents.
Growing Legislative Interest in Med Mal Mediation
The legislative trend toward mediation of medical malpractice disputes continues with the introduction of legislation in Hawaii on January 25, 2006. The bill (S.B. 2658) states that it is intended to “encourage open, frank communications between patients and physicians, apologies, and quick resolution of claims through mediation to avoid bitter and protracted lawsuits.” By requiring medical facilities to implement mediation processes, the legislation seeks to encourage early “exchange of information” in addition to early settlement. By contrast, two bills introduced in New Jersey in the 2006 session (A.B. 945 and A.B. 1088) purport to require mediation, but in fact call for panels of five “mediators” to provide early neutral evaluation. The evaluation may be the basis for cost shifting if the case does not settle and may trigger a requirement to post bonds prior to trial in cases the “mediators” find frivolous.
A New Jersey appellate court reversed the trial court’s determination that a dispute was settled where all issues were admittedly not resolved and there was no signed settlement agreement. The appellate court expressed dismay that the trial court had taken testimony from the mediator and noted that “confidentiality of the mediation process is a matter of great public and systemic importance.” The court enumerated multiple bases for confidentiality in mediation: the terms in the order sending the case to mediation; the mediator’s oral statements to the parties; the applicable court rules; and the principles of the Uniform Mediation Act which the court stated was an “appropriate analytical framework” even though the UMA was not in force during the period in question.
Federal Court Launches Broad Mediation Pilot Program
Finding mediation to be the best alternative dispute resolution process, the U.S. District Court for the Western District of New York launched a pilot mediation program on January 1, 2006. While currently limited to the docket of the judge overseeing the program, the program broadly refers all new and pending civil cases to mediation (with certain exceptions, such as habeas corpus writs and Social Security and bankruptcy appeals). Other judges may choose to refer cases to mediation. Parties may agree to use a form of ADR other than mediation, but may seek to opt out of the program only for “good cause.” The court has established a roster of mediators (who can be lawyers or non-lawyers) and will make a selection if the parties are unable to agree on a mediator. The court set a rate of $150/hour for the first two hours of mediation, and allows mediators to charge a higher rate after two hours and to specify a rate for preparation.
Pepperdine University has named Thomas Stipanowich as academic director and Peter Robinson as managing director of the School of Law’s Straus Institute for Dispute Resolution. Currently ranked by US News & World Report as the nation’s number one dispute resolution program, the Straus Institute has held the top ranking four years out of the previous seven.
Stewart v. Preston Pipeline Inc., 2005 WL 3475669 (Cal. App. 6 Dist. Dec.
20, 2005).
Stewart initiated a personal injury suit against Preston, which went to
mediation. Stewart, Stewart's attorney, and Preston's attorney signed a
settlement agreement, which Stewart later contested. The trial court
granted Preston's motion for summary judgment based on the settlement
agreement, and Stewart appealed. Stewart contended that the settlement
agreement was inadmissible as evidence because of statutory mediation
confidentiality, and, alternately, that the agreement was unenforceable
because it wasn't signed by all of the parties. The California Appellate
Court disagreed with Stewart, holding that the settlement agreement
expressly waived confidentiality under the California Code, and that
because mediation confidentiality is procedural, the parties themselves do
not have to sign the agreement to waive confidentiality protections. The
Court also held that the settlement agreement was not 'per-se'
unenforceable, but could be used as evidence in a summary judgment motion.
The Court therefore upheld the trial court's order for summary judgment.
(MAK)
Federal Legislation Would Mandate Mediation of Farm Worker Disputes
Legislation introduced in the U.S. House of Representatives (H.R. 4503) would require mediation of claims arising under the Migrant and Seasonal Agricultural Worker Protection Act (29 U.S.C. § 1801). The bill provides that before any action can be filed in court, a mediator must certify that the party “attempted, in good faith, mediation or other non-binding dispute resolution of all issues involving all parties to the dispute.” If requested, the Federal Mediation and Conciliation Service would assign a mediator acceptable to the parties. Congressional staff explained that the bill is not intended to lower workplace standards, but to find the “best solution” to reduce litigation costs, which the sponsors believe are so high as to encourage the hiring of illegal workers who are unlikely to litigate. Even though parties are required to mediate, all claims that are not voluntarily settled may be filed in court. Comparable mediation provisions were introduced in a Senate bill (S. 2087) which would apply to fewer cases than the House bill.
Alabama Requires Insurers to Mediate Natural Disaster Claims
Alabama now requires insurers to mediate residential claims resulting from hurricanes and other natural disasters under regulations that took effect on December 31. Alabama’s program was developed by a state task force created after Hurricane Ivan in September 2004. Homeowners can request mediation of disputes of $500 or more if the claimant has not retained counsel or initiated litigation; insurers must cover the $350 cost of mediation. Under the program, the Alabama Department of Insurance will make appointments from a list of mediators and the Department may assist claimants in preparing for mediation, if requested. Although attorneys for parties may not attend the mediation, the Department can send an attorney or representative to provide legal and technical information. Insurers may avoid the state program by developing and obtaining state approval for their own alternative dispute resolution program.
Louisiana, Mississippi Turn to Mediation for Hurricane Claims Times-Picayune, December 23, 2005; Sun Herald, December 23, 2005
Louisiana and Mississippi are launching mediation programs in early January to resolve hurricane-related residential insurance disputes. The initiatives are modeled after the successful Florida mediation program following the 2004 hurricane season, which settled 93% of all cases brought to mediation. Under the new programs, when consumers choose to mediate, insurance carriers are required to participate and pay the costs of the program. The American Arbitration Association will administer both programs and provide local mediators, which include former U.S. Court of Appeals Judge Charles Pickering and a former Mississippi Supreme Court Justice. The Louisiana program also provides for insurers to pay $175 per case to the court systems in areas struggling since hurricane Katrina. While insurance companies are supportive of the mediation program, others are concerned that there will not be sufficient capacity. Richard “Dickie” Scruggs expressed general skepticism about the program in Mississippi, but has 3,000 clients ready and would like to mediate 100 cases a week.
The views expressed by authors are their own and do not necessarily reflect the views of Resourceful Internet Solutions, Inc., Mediate.com or of reviewing
editors.
