Alternative Dispute Resolution Committee
The Alternative Dispute Resolution Committee is concerned with developments and optimum use of all forms of alternative dispute resolution, including arbitration, mediation, summary jury trials, mini-trials, early neutral evaluation, as well as effective settlement and negotiation techniques. Alternative dispute resolution is considered both within the formal litigation process and pre-suit. The committee sponsors numerous programs to enhance the advocate's skills in all dispute resolution procedures because knowledge of ADR techniques is particularly essential for trial lawyers.
On February 26, 2015, the Securities and Exchange Commission (SEC) approved a proposed rule change to amend Rule 12100 and 13100 of the Customer and Industry Codes to refine and reorganize the definitions of “non-public” arbitrator and “public” arbitrator. According to the Notice of Filing, dated July 3, 2014, the proposed rule change was designed to address concerns regarding the perceived neutrality of the public arbitrator roster raised by both investor representatives and financial industry representatives.
Registration for the ABA Section of Litigation Annual Conference in New Orleans, LA, is now open. With over 30 CLE programs, 100 nationally known speakers, and a variety of networking events, this conference provides exceptional CLE and valuable networking opportunities. One of the CLEs that is being offered is “A Litigator’s Guide to Arbitration: Best Practices to Maximize the Benefits of Your Next Arbitration”. For more information and registration please visit the Event page.
A New FINRA Rule Proposed: Proposed Rule Change to Amend the Codes of Arbitration Procedure Relating to Cancelling or Postponing a Hearing
FINRA filed with the Securities and Exchange Commission (SEC) a proposed rule change to require that parties give more advance notice before cancelling or postponing a hearing, or be assessed a higher late cancellation fee to be paid to the arbitrators.
Illinois has created a mandatory arbitration program for commercial cases in which less than $75,000 is in dispute. The program, which is slated to begin in early 2015, is being organized by Illinois Circuit Court Judge Thomas R. Mulroy. Arbitrators are being paid $300 for a half-day arbitration session, a cost that is being funded by the Illinois Supreme Court. The rules for the program can be found at the court’s web page.
The CPR International Institute for Conflict Prevention and Resolution has issue its new rules for Administered Arbitration of International Disputes which are effective December 1, 2014.
FINRA, with SEC approval, has amended the Codes of Arbitration Procedure for Customer Disputes (Customer Code) and the Code of Arbitration Procedures for Industry Disputes (Industry Code) to increase arbitrator honoraria—payments that FINRA makes to its arbitrators for the services they provide to FINRA’s dispute resolution forum. It has been 15 years since the last increases, which were deemed necessary to attract and retain high quality arbitrators. The amendments are effective for arbitration cases filed on or after December 15, 2014—they will not apply to arbitration cases filed prior to the effective date.
On September 18–20, 2014, the Section of Litigation held its annual Fall Leadership Meeting in Nashville, TN. The ADR Committee was represented by Cochairs Bruce Rubin and Louis Burke, Web Editors Mitchell Marinello and Chris Moore, Eric English, member and Chair of the Settlement Counsel sub-committee, Marnie Huff, member and Chair of the Membership Subcommittee, and Marcos Ramos, member and designee from the Section’s Diverse Leaders Academy. The main purpose of the meeting was to prepare a plan for next year’s activities, including some new initiatives that the Section has encouraged committees to undertake.
The ADR Committee developed an ambitious plan for speaker presentations, Roundtable discussions, and published materials for the coming year, including practice tips to be published regularly in the ADR newsletter and on the ADR webpage. We also were approached by several other committees interested in partnering with us in making presentations. We would greatly appreciate your participation and assistance in volunteering ideas and helping us prepare upcoming programs.
The ADR newsletter and webpage each continue to receive excellent quarterly evaluations from the ABA. We would really like your help to keep our track record going strong. Please volunteer to write an article or news and development piece—or skip a step and just write something and send it to us. It is a great way to market yourself and to build your ADR practice. If you need ideas for articles, please contact one of the web editors. They will be pleased to send you a list of potential topics. Potential topics also can be found on our starter list.
On July 31, 2014, President Obama issued an Executive Order on Fair Pay and Safe Workplaces. As part of that executive order, the president required that federal contractors agree in federal procurement contracts to not enter into mandatory pre-dispute arbitration agreements with their employees covering federal employment-discrimination claims or any tort claim related to or arising out of sexual assault or harassment, where the estimated value of the supplies acquired and services required exceeds $1 million. Post-dispute agreements to arbitrate such claims remain permitted.
On July 30, 2014, the SEC approved FINRA Rule 2081 (Prohibited Conditions Relating to Expungement of Customer Dispute Information). Rule 2081 prohibits member firms and associated persons from compensating customers for, or conditioning a settlement on, the customer’s agreement to consent to, or not to oppose, a request to expunge such customer dispute information from the Central Registration Depository (CRD). Rule 2081 is effective immediately.
On July 25, 2014, the London Court of International Arbitration (LCIA) released a revised set of its arbitration rules. The new rules will apply to any LCIA arbitration commenced on or after October 1, 2014, unless the parties agree otherwise. The new rules preserve all of the notable features of LCIA arbitration. At the same time, several significant changes have been made, including with respect to (1) the form of and law governing the arbitration agreement, (2) the conduct of the proceedings, and (3) the granting of interim relief prior to constitution of the arbitral tribunal.
The American Arbitration Association (AAA) has inaugurated a new set of supplementary rules (effective June 15, 2014) that enable parties to predict the time and cost of their construction arbitration. These Supplementary Rules for Fixed Time and Cost Construction Arbitration were designed in response to increasing concerns among users that they are unable to foresee the ultimate fees and completion time of construction arbitrations.
With the use of these new supplementary rules, parties can calculate:
the maximum time to complete the arbitration
the number of hearing days the arbitration will run
the arbitrator costs
the AAA administration fees
The SEC approved amendments to the Customer and Industry Codes of Arbitration Procedure to provide that any document that a party files with FINRA that contains an individual’s Social Security number, taxpayer-identification number, or financial-account number must be redacted to include only the last four digits of any of these numbers. The amendments apply only to documents filed with FINRA. They do not apply to documents that parties exchange with each other or submit to the arbitrators at a hearing on the merits. In addition, the amendments do not apply to cases administered under the simplified arbitration rules.
The amendments are effective on July 28, 2014, for all documents filed with FINRA on or after the effective date.
The Federal Industry Regulatory Authority has recently released statistics about its past and present case load. According to the statistics there is an 11 percent increase in new case filings compared to April of 2013. Also, as in the FINRA yearly statistics, the top two causes of action alleged were breach of fiduciary duty (685 cases) and negligence (673 cases). For more information, please visit the FINRA website.
Lexis® CLE and the International Institute for Conflict Prevention and Resolution (CPR) have released a video presentation of the new CPR Administered Arbitration Rules that became effective on July 1, 2013. CPR is adding to its services, “full administration”, which includes billing, selection of the arbitrator or arbitrators, ensuring the smooth interface between parties and the Arbitrator/Tribunal, limited review of awards, and oversight to ensure the process occurs in a timely manner.
The American Arbitration Association (AAA) announced that its website offers an online arbitration and mediation tool called ClauseBuilder, which is designed to assist individuals and organizations in drafting clear and effective arbitration and mediation agreements. The current version of ClauseBuilder deals with commercial arbitration contracts. Future versions in development will address construction, international, and employment contracts.
To get started, one need only visit the AAA site, and then follow the directions in the drop-down menu. You will then be offered templates that an individual or organization can adapt to its current situation. Options include the number of arbitrators desired, any particular qualifications the arbitrator must have, the location of the arbitration, any limitations on discovery, confidentiality terms, and the remedies that are available. After you have constructed your arbitration clause, you can download the clause as a text file, print it, or save it for future use. If users want to revisit the site and rework a clause that was previously created, they can open an AAA account to store their document.
According to the AAA, “ClauseBuilder will provide a quick and efficient, self-guided process for drafting ADR clauses that are customized to parties’ particular contracts and needs.” Time will tell if this new tool will make it easier for parties involved in drafting arbitration and mediation agreements.
You can contribute articles and case notes for our website and/or the next issue of our newsletter. Writing an article or case note is not time consuming, raises awareness of ADR issues and relevant cases for your colleagues, and helps market your practice to other practitioners.
Even as the benefits of belonging to the ABA continue to grow, our membership is declining. There are many reasons, chief among them that there are fewer law students. That's why the ABA Section of Litigation is launching a program to send members to law schools to tout the benefits of membership. We're looking for ways to attract newer lawyers to the ADR Committee.
To be sure, newer lawyers will often get to represent clients in arbitrations and mediations, and we have published articles on what to know when you embark on your first one. But what can experienced lawyers, arbitrators, and mediators do beyond writing and speaking about "how to do it?" And should veteran arbitrators and mediators have a monopoly on those roles? If not, how does a newcomer get the name recognition and business opportunities that come with it?
Our committee is looking for ways to help newer lawyers, arbitrators, and mediators. If you have thoughts on this, please let us know. Send an email to Bruce Rubin or Carlos Rodriguez Vidal. Are you aware of any programs that aim at that goal? Are you a mediator who would let someone looking for mediator experience to accompany you in a mediation session? Do any court panels of arbitrators in your jurisdiction have a selection process that might need improvement to increase the odds of opportunities for comparative "rookies"? Are you connected to an arbitration or mediation organization that has targeted the need to include newer arbitrators and mediators?
We are your new committee cochairs. This message will bring you up to date on our activities.
First, we encourage you to join one of the many subcommittees we have. This is the best way to become more involved and more visible within the committee. All you need to do is send an email to Bruce Rubin to indicate which subcommittee or subcommittees you are willing to join. All of our subcommittees relate to arbitration and mediation. The specific subcommittees are:
1. Sound Advice—this committee arranges for podcasts of 5 to 10 minutes on topics of interest
2. Roundtable—this committee organizes, with help from the ABA, webinars that feature guest speakers on topics of interest. The programs typically last an hour
12. Settlement Counsel
Second, we always need articles and “news and development” pieces for our quarterly newsletter and website. Please propose a topic you may want to write about, or pick one from the starter list or our current bar year list and reach Jean Baker, our Publications Subcommittee cochair, or call her at (202) 223-7093. She can let you know if the topic has been taken, and what the ABA publication requirements are.
We look forward to meeting you and working with you.
Bruce Rubin and Carlos Rodriguez-Vidal
Cochairs, Alternative Dispute Resolution Committee
Our active subcommittees include:
- Book Task Force
- Settlement Counsel
Find contact information for committee and subcommittee chairs: