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	<title>Business Conflict Blog</title>
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	<link>http://businessconflictmanagement.com/blog</link>
	<description>Conflict Management Expertise from F. Peter Phillips</description>
	<pubDate>Thu, 11 Mar 2010 14:46:58 +0000</pubDate>
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		<title>New Feature: International Mediation Resources</title>
		<link>http://businessconflictmanagement.com/blog/2010/03/new-feature-international-mediation-resources/</link>
		<comments>http://businessconflictmanagement.com/blog/2010/03/new-feature-international-mediation-resources/#comments</comments>
		<pubDate>Thu, 11 Mar 2010 14:32:23 +0000</pubDate>
		<dc:creator>F. Peter Phillips</dc:creator>
		
		<category><![CDATA[International]]></category>

		<category><![CDATA[ADR Institutions]]></category>

		<guid isPermaLink="false">http://businessconflictmanagement.com/blog/?p=510</guid>
		<description><![CDATA[This blog's host site, www.BusinessConflictManagement.com, has added an electronic directory of over 80 mediation centers located on six continents.]]></description>
			<content:encoded><![CDATA[<p>My periodic attendance at the UIA&#8217;s <a href="http://businessconflictmanagement.com/blog/2009/10/world-mediation-forum-meets-in-florence/" target="_self">World Mediation Forum</a>, as well as the opportunity to attend the <a href="http://businessconflictmanagement.com/blog/2009/05/global-symposium-on-adr-for-smes/" target="_self">Chamonix Conference </a>last April and the contacts and friendships I made while serving the <a href="http://www.cpradr.org" target="_self">CPR Institute </a>for ten years, have all prompted the creation of a &#8220;Directory&#8221; of ADR organizations around the world. </p>
<p style="text-align: center;"><a id="apf11" href="http://images.google.com/imgres?imgurl=http://faculty.msb.edu/prog/Cmrc/images/Inernational%2520Business.jpg&amp;imgrefurl=http://faculty.msb.edu/prog/Cmrc/&amp;usg=__PF_BGt3AFqpmssc68eJjgrGCWKE=&amp;h=450&amp;w=300&amp;sz=27&amp;hl=en&amp;start=12&amp;itbs=1&amp;tbnid=s4GKvbg2u9E72M:&amp;tbnh=127&amp;tbnw=85&amp;prev=/images%3Fq%3Dinternational%26hl%3Den%26gbv%3D2%26ie%3DUTF-8%26tbs%3Disch:1"><img id="ipfs4GKvbg2u9E72M:" style="vertical-align: bottom; border: 1px solid;" src="http://t2.gstatic.com/images?q=tbn:s4GKvbg2u9E72M:http://faculty.msb.edu/prog/Cmrc/images/Inernational%2520Business.jpg" alt="" width="110" height="133" /></a></p>
<p>This Directory is now posted at the host web site, <a href="http://www.BusinessConflictManagement.com">www.BusinessConflictManagement.com</a>, under the title &#8220;<a href="http://www.businessconflictmanagement.com/resources.html" target="_self">ADR Resources</a>.&#8221;<span id="more-510"></span></p>
<p>These resources are divided into two categories.  One lists major ADR institutions of international status, that provide educational and informational resources on a global scale.  These include ICDR, WIPO, CeDR, CPR, LCIA, IMI and other organizations of broad scope.</p>
<p>The second category lists mediation and conciliation centers in more than 60 countries, along with their web sites or (in some cases) contact listings.  Many of these organizations are Chambers of Commerce that include, among their activities, arbitration and mediation capabilities.  They are listed alphabetically for ease of those seeking information on ADR in a specific country.</p>
<p>I hope this resource site is useful to its intended audience &#8211; commercial conflict managers and those who advise them.  I also trust that readers will advise of any organizations missing from the list, in order to make this Directory as complete as possible.</p>
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		<item>
		<title>ADR Needs More Diversity</title>
		<link>http://businessconflictmanagement.com/blog/2010/03/adr-needs-more-diversity/</link>
		<comments>http://businessconflictmanagement.com/blog/2010/03/adr-needs-more-diversity/#comments</comments>
		<pubDate>Fri, 05 Mar 2010 23:05:10 +0000</pubDate>
		<dc:creator>F. Peter Phillips</dc:creator>
		
		<category><![CDATA[Conflict Resolution]]></category>

		<category><![CDATA[ADR]]></category>

		<guid isPermaLink="false">http://businessconflictmanagement.com/blog/?p=496</guid>
		<description><![CDATA[The argument for more diversity among arbitrators and mediators is a compelling one.  Why isn't it happening?]]></description>
			<content:encoded><![CDATA[<p>I&#8217;m a 60-year old white guy, two years into the terrifying challenge of building a solo practice as a mediator/arbitrator.  And the gist of this post is that more women and people of color need to be hired as neutrals. </p>
<p>I worked hard for this goal when I was Senior Vice President of CPR Institute, and served as Staff Liaison to the <a href="http://www.cpradr.org/PracticeAreas/DiversityTaskForce/tabid/184/Default.aspx" target="_self">CPR Task Force on Diversity in ADR</a>.  And now, that <em>prima blogger assoluto al mondo</em>, <a href="http://www.negotiationlawblog.com/promo/about/" target="_self">Victoria Pynchon</a>, has started a <a href="http://www.negotiationlawblog.com/2010/02/articles/conflict-resolution/negotiating-gender-why-so-few-women-neutrals/" target="_self">series of posts </a>with her characteristic flair and logical power, pressing the issue.  <a href="http://www.urbandictionary.com/define.php?term=you%20go%20girl" target="_self">You Go, Girl</a>!<span id="more-496"></span></p>
<p>Would any client in their right mind hire only graduates from Stanford Law School?  Of course not!  And the reason is that there are many other very good attorneys with excellent training who come from different schools, start from different perspectives, have had different professors, and can bring different strengths to a team.</p>
<p>Then why do clients continually select mediators and arbitrrators who are (as I am told) &#8220;pale, male and stale&#8221;?</p>
<p>There are compelling business reasons to shake up the entire ADR neutral selection process; at CPR I assisted Ben Picker, Laurel Pyke Malson and others to create a &#8220;<a href="http://www.cpradr.org/Portals/0/DiversitySurvey_Apr07.pdf" target="_self">Diversity Survey</a>&#8220; for the use of corporate clients to prod their outside counsel to deliver more diverse, more eclectic lists of proposed neutrals.  </p>
<p>Nor is it an area bereft of ideas for real change; in a <a href="http://www.businessconflictmanagement.com/pdf/BCMpress_08.pdf" target="_self">2006 article </a>in <em>National Law Journal</em> I collected a bunch of them from the CPR Task Force and elsewhere.</p>
<p>A lot of businesses &#8220;get it.&#8221;  Yet the question eludes a fix.  Two years later I wrote a <a href="http://www.businessconflictmanagement.com/pdf/BCMpress_15.pdf" target="_self">follow-up article</a>, in <em>Dispute Resolution Magazine</em>, asking why &#8212; if the need for diversity among neutrals is so evident &#8212; the market has not responded.</p>
<p>It remains perplexing.  But for the good of the profession, for the effectiveness and growth of the practice, and for the kind of world I want to live in, here is (as Victoria so bluntly put it) an <a href="http://www.negotiationlawblog.com/2010/03/articles/conflict-resolution/negotiating-gender-the-old-white-men-speak/" target="_self">Old White Man Speaking</a> &#8212; let&#8217;s have more diversity out there!!!</p>
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		<title>Can You Recognize When You&#8217;re Being &#8220;Reality Tested&#8221;?</title>
		<link>http://businessconflictmanagement.com/blog/2010/03/can-you-recognize-when-youre-being-reality-tested/</link>
		<comments>http://businessconflictmanagement.com/blog/2010/03/can-you-recognize-when-youre-being-reality-tested/#comments</comments>
		<pubDate>Mon, 01 Mar 2010 21:56:08 +0000</pubDate>
		<dc:creator>F. Peter Phillips</dc:creator>
		
		<category><![CDATA[Mediation]]></category>

		<guid isPermaLink="false">http://businessconflictmanagement.com/blog/?p=486</guid>
		<description><![CDATA["Reality Testing" is a critical phase of business mediation.  Both lawyers and parties should recognize it when it starts, to get the most value from it.]]></description>
			<content:encoded><![CDATA[<p><em>NOTE:  The following text will appear as a chapter in a mediator skills volume to be published soon by the International Bar Association, edited by mediator </em><a href="http://www.bonaccord.eu/philosophy-patricia.html" target="_self"><em>Patricia Barclay </em></a><em>of </em><a href="http://www.bonaccord.eu/" target="_self"><em>Bonaccord Ecosse Limited</em></a><em>, in Edinburgh, Scotland.</em> </p>
<p>    </p>
<p>          Reality testing is the technique of inviting a party to adjust his perceptions of the claim.  A party may overestimate the likelihood of success on the merits, or the other side’s ability or willingness to pay.  He may have an unrealistic assessment of his alternatives to settlement.  The transaction costs of continuing the dispute in court may not have been accurately addressed.  He may not have confronted business, competitive, or psychological obstacles to a successfully negotiated conclusion of the dispute.  The purpose of reality testing is to help to eliminate those obstacles.<span id="more-486"></span></p>
<p>           Reality testing is a necessary part of mediation.  Intelligent and rational parties, advised by competent counsel, may have labored long and hard to place a value on a claim or defense, and discussed the weaknesses and strengths of their position.  Good counsel will have put probabilities of success at various junctures of the litigation process, and together they will have lived with the matter for months, sometimes years.</p>
<p>            Now along comes a mediator, who has just learned about the matter for a few hours, seeking to cast doubts on all this good work.  Why would a mediator put herself in such an unwelcome and vulnerable posture?</p>
<p>            By reality testing, the mediator is testing the positions of the parties, inviting re-assessment and forcing an articulation of certain hitherto tacit assumptions.  In the process of reality testing, counsel and client may discover that they have not always been starting from the same place, or using the same logical analysis of the situation.  They also may not have accurately or thoroughly assessed the situation from the perspective of the other side.  The more specific the mediator’s probing, and the more determined the mediator is in following-up each area of reality testing, the more useful the exercise is to the parties.</p>
<p>            There are many ways to start off this type of inquiry.  Note the distinctions among these questions:</p>
<p><em>            What do you see as the main weaknesses of your claim?</em></p>
<p><em>            What do you see as the main strengths of their defense?</em></p>
<p><em>            What do you think they perceive as the biggest weakness in your claim?  Do they have a logical basis for that?  In other words, do they have a point (however misguided it may be)?</em></p>
<p><em>            If you were in their position, how would you attack the logic (or the facts or the conclusions) that underlie your demand?</em></p>
<p><em>            So do you think that, from their perspective, they are behaving rationally when they offer XXXX?</em></p>
<p>            The intent of this series of questions is to encourage a realistic – dare one say objective – view of the status of the negotiation process.  The discussion undermines the “demonization” of the opponent that is an inevitable product of longstanding conflicts, and assists each party in assessing the bid/ask gap in a more productive way.</p>
<p>            Another series of questions tests the solidity and sophistication of a party’s BATNA:</p>
<p><em>            If we don’t get an agreement today, what’s your best-case scenario?</em></p>
<p><em>            What’s the worst thing that might happen to you if we don’t get this done today?</em></p>
<p><em>            How much does your counsel project it will cost to take this matter to the end of discovery?  Through a motion for summary judgment prior to trial?  To the eve of trial?  To the end of trial?  To appeal, in the event that the trial doesn’t go as you expect it will?</em></p>
<p><em>            How much of your own time is being spent on this case and away from your business?  Do you expect that will decrease or increase if we fail to end it today?</em></p>
<p><em>            Do your other customers and competitors and vendors know that you have this lawsuit going?  What impact do you think it will have on your good will and your business reputation if this has to go to trial?</em></p>
<p><em>            Does your boss have a view on this?  Does your wife?</em></p>
<p>            There are risks in posing reality-testing questions.  One risk is that the mediator may be perceived as being rhetorical.  If one is going to ask these questions, one must be prepared to listen to the answers, and to pursue what is unclear.  <em>Why do you say that?  What do you base that on?</em>  And one should take care in each case to say, <em>I think I understand how you’re going about this, and I follow you</em>.  Even in reality testing, everyone needs to be validated.</p>
<p>            Another risk is that a party may feel she is being coerced.  Too often, mediators who think they are being clever are in fact brow-beating the parties they are trying to help.  It is too easy for a tone of voice or an arch of a brow to give the suggestion that there is a right and a wrong answer to a question, when the mediator honestly intended to provoke discussion, not bear down with implied shame or humiliation.</p>
<p>            A third risk is that the mediator may be viewed as offering an indirect or implied evaluation of a claim or defense.  Great care must be taken to avoid that perception (unless it is intended) by prefacing one’s questions with such disclaimers as <em>“Well, you know your business better than I do, so let me just ask you…”</em> or <em>“Your counsel has given you a far more reliable piece of advice on this than I could, so let me just ask what your sense is of….”</em>  The goal of reality testing is, after all, to provoke a change of the party’s assessments and assumptions, not to give the party the fruits of your own wisdom.  They have legal counsel already – what they need now is an invitation to make a fresh assessment.</p>
<p>            Reality testing is particularly helpful when it focuses on business, rather than legal, questions.  <em>Why do you think that your co-venturer breached the agreement?  How does she think she might profit by making that move?  What have you heard on the street about the possibility of a bankruptcy filing?  Would the other side consider it attractive to lower the unit price but extend the term of the agreement?  Why?  Why not?  How did you come to that conclusion? What if the other side thinks differently, rightly or wrongly – what would the consequences be for you?</em></p>
<p>            Reality testing can take many forms.  It is not a discrete set of tools to be used at a discrete stage of the mediation process.  It often arises spontaneously and its form reflects the nature of the claim itself.  And sometimes it just doesn’t work.</p>
<p>               I once got an employer to agree to accommodate a physically disabled employee in every way she sought – including a change in supervisor.  When I relayed this success to the claimant, she unexpectedly made an additional demand of $100,000. </p>
<p>            <em>Why do you need $100,000?</em></p>
<p><em>            Because they hurt my feelings and caused me months of grief.</em></p>
<p><em>            Why $100,000?  Why not $50,000 or $200,000?</em></p>
<p><em>            Okay, $200,000.</em></p>
<p><em>            Why would they pay you that?</em></p>
<p><em>            They better if they want me to go away.</em></p>
<p><em>            But they don’t want you to go away; they want you to continue to work for them.  They might think that’s a lot of money, especially since your annual salary is $35,000.  Have you heard of any other employee who was paid $100,000 to settle a case?  Have you read in the paper about anyone getting $100,000 to settle a case?  Did any lawyer even give you the opinion that you could get $100,000 to settle this case?</em></p>
<p><em>            No, no, no.</em></p>
<p><em>            So if we don’t settle this today, you figure you will tell the judge (in four years or so, when your case comes up) that they treated you badly because of your disability, and they will say that they fixed every one of the problems by arranging everything you asked for, and you will say you also want $100,000, and the judge will say sure, makes sense, pay her?</em></p>
<p><em>            Yup.  Or I at least want to have a try.</em></p>
<p><em>            What do you think they will say when I walk into the other room and say that you want $100,000?</em></p>
<p><em>            They can say what they want.  But you tell them.</em></p>
<p>            Even persistent reality testing will not have an effect on an irrational or obstinate party.  But most business parties are commercially rational, in the end.  And failing to press the matter would mean failing to engage in one of the unique values that a mediator adds to the negotiation process.  In the real world, attorneys cost something.  Juries are uncertain.  Arbitrators sometimes err.  Laws change.  All claims and defenses must be discounted for mere uncertainty. </p>
<p>            Moreover, reality testing, properly conducted, will often dispel a major obstacle to settlement: concerns of the other party’s bad faith.  The mere fact that one’s opponent has a different assessment of the claim does not mean they are lying, treacherous or stupid.  It may mean that they are viewing the same set of facts and the same body of law from a different but equally valid perspective, and basing their assessments on different but equally valid assumptions.  Look at a wedge from above and you&#8217;ll see a triangle; from behind you&#8217;ll see a square; and from the side a rectangle.  Testing a party’s view of the other side’s assessments and assumptions can be enormously helpful.</p>
<p>            The great American jurist Louis D. Brandeis once wrote that “The logic of words should yield to the logic of realities.”  <em>Di Santo v. Pennsylvania</em>, 273 U.S. 34, 43 (1927).  In business disputes, the logic of the law should yield to the reality of commercial markets.  Reality testing, if done with empathy, sensitivity and genuine curiosity, can be an enormously effective tool to achieve this end.</p>
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		<title>The Law of Damages and Our Spiritual Traditions</title>
		<link>http://businessconflictmanagement.com/blog/2010/02/the-law-of-damages-and-our-spiritual-traditions/</link>
		<comments>http://businessconflictmanagement.com/blog/2010/02/the-law-of-damages-and-our-spiritual-traditions/#comments</comments>
		<pubDate>Sun, 28 Feb 2010 18:58:04 +0000</pubDate>
		<dc:creator>F. Peter Phillips</dc:creator>
		
		<category><![CDATA[Religion]]></category>

		<category><![CDATA[Culture]]></category>

		<guid isPermaLink="false">http://businessconflictmanagement.com/blog/?p=481</guid>
		<description><![CDATA[Some thoughts on the assumptions underlying our apparent need, as Americans, to use the law to get more-than-even]]></description>
			<content:encoded><![CDATA[<p>It&#8217;s my turn to teach First Day School (what Quakers call Sunday School) for the past few weeks.  And as usual I&#8217;m having more fun than the kids are.  The King James Version of the Bible has been a favorite ever since I took Prof. Bond&#8217;s course on <em>&#8220;The Bible as Literature&#8221;</em> at Dartmouth (before the Punic Wars, it sometimes seems) and it is a delight to revisit that wonderful collection of superb writing.</p>
<p>Looking through the story of Moses has stirred some concerns, though, about what we Americans think justice is, and what we use the law to accomplish.  In particular, I wonder whether we have lost our fundamental cultural moorings a bit when it comes to our response to being injured.<span id="more-481"></span></p>
<p>When Moses laid down the law to the Children of Israel, he generally called for restraint.  He taught them to refrain from vengeance and to practice even-handed justice, where the remedy was proportional to the hurt.  That is, if a Hebrew is injured by another Hebrew, then the punishment should be to inflict upon the wrongdoer only the same injury, not more.  If a neighbor pokes out your servant&#8217;s eye, the punishment is not to kill one of his servants, or to poke out both the eyes of one of his servants, but to poke out one eye of one of his servants.  Thus:</p>
<blockquote><p>If any mischief follow, then thou shalt give life for life, eye for eye, tooth for tooth, hand for hand, foot for foot, burning for burning, wound for wound, stripe for stripe. &#8212; <em>Exodus</em> 21:23-25</p></blockquote>
<p>I&#8217;ve always thought that this Biblical principle is the derivation of the &#8220;scales of justice.&#8221;  The harm and the response to harm are of equal weight, and after justice is done the scales are balanced.  Where there is an upset in affairs such that the community is thrown out of balance, then the law provides the remedy that restores equilibrium.</p>
<p style="text-align: center;"><a id="apf8" href="http://images.google.com/imgres?imgurl=http://library.ncwc.edu/services/seminars/jus111lewis/justice.jpg&amp;imgrefurl=http://library.ncwc.edu/services/seminars/jus111lewis/index.htm&amp;usg=__bKZYRBr9rTnCULhauQ6mjYNXkUM=&amp;h=1024&amp;w=1024&amp;sz=121&amp;hl=en&amp;start=29&amp;itbs=1&amp;tbnid=iC1o4Eat38d4pM:&amp;tbnh=150&amp;tbnw=150&amp;prev=/images%3Fq%3Djustice%26start%3D20%26hl%3Den%26sa%3DN%26gbv%3D2%26ndsp%3D20%26tbs%3Disch:1"><img id="ipfiC1o4Eat38d4pM:" style="BORDER-BOTTOM: 1px solid; BORDER-LEFT: 1px solid; VERTICAL-ALIGN: bottom; BORDER-TOP: 1px solid; BORDER-RIGHT: 1px solid" src="http://t0.gstatic.com/images?q=tbn:iC1o4Eat38d4pM:http://library.ncwc.edu/services/seminars/jus111lewis/justice.jpg" alt="" width="150" height="150" /></a></p>
<p style="text-align: left;">Jesus went one better:</p>
<blockquote>
<p style="text-align: left;">Ye have heard that it hath been said, An eye for an eye, and a tooth for a tooth: but I say unto you, That ye resist not evil: but whosoever shall smite thee on thy right cheek, turn to him the other also.  And if any man will sue thee at the law, and take away thy coat, let him have thy cloak also.  &#8212; Matthew 5:38-40</p>
</blockquote>
<p style="text-align: left;">That one never quite made it into the books.</p>
<p style="text-align: center;"><img id="moduleImage13521724" class="aligncenter" src="http://static.squidoo.com/resize/squidoo_images/250/draft_lens2384642module13521724photo_1232317477An_Eye_For_An_Eye.jpg" alt="" width="174" height="107" /></p>
<p style="text-align: left;">Still, you have to wonder how it became okay for Americans to seek &#8212; and get &#8212; a remedy that exceeds our injury.  Indeed, the justifications that the law has come up with &#8212; that extra damages are &#8220;punitive&#8221; or &#8220;exemplary&#8221; &#8212; are a bit unconvincing, aren&#8217;t they?  Someone is going to use the civil law to <em>punish</em> or <em>make an example of</em> someone?  By making them pay <em>more</em> than the harm they caused?  What example does that set?</p>
<p style="text-align: left;">This isn&#8217;t (I hope) a naive reformist plaint, or a political or social rant.  On the contrary, it&#8217;s a personal thought that reflects, if anything, a spiritual grounding that I and others have had since we were kids.  There&#8217;s something down deep in us that gets embarrassed by this sort of thing.  A car manufacturer is made to pay millions for a dent in a hood that can be fixed for $300.  A fast-food company is charged zillions because someone bought a cup of hot coffee and burned themselves when they tried to drink it as they drove.  We laugh, but don&#8217;t we also cringe a bit?</p>
<p style="text-align: left;">Every mediator has been in the position of watching a mediation crater because, although the defendant was willing to make the claimant whole, he was unwilling to pay more than that &#8212; such as the fees that claimant&#8217;s attorney claimed to have clocked up.  My worst experience in this was mediating a claim for $1,500, purportedly subject to treble damages.  Over a five-hour mediation, the defendant eventually offered $5,000, making the claimant more than whole.  But the attorney wanted an additional $22,000 for fees incurred to date.  The result:</p>
<p style="text-align: center;"><a id="apf0" href="http://images.google.com/imgres?imgurl=http://nasadaacs.eos.nasa.gov/articles/images/2005_craters_meteor.jpg&amp;imgrefurl=http://nasadaacs.eos.nasa.gov/articles/2005/2005_craters.html&amp;usg=__iJWyslmq5AbjmtB5BN2pSOGaYZY=&amp;h=272&amp;w=540&amp;sz=16&amp;hl=en&amp;start=1&amp;itbs=1&amp;tbnid=IC5PGgjMPPdaDM:&amp;tbnh=66&amp;tbnw=132&amp;prev=/images%3Fq%3Dcraters%26hl%3Den%26gbv%3D2%26tbs%3Disch:1"><img id="ipfIC5PGgjMPPdaDM:" style="BORDER-BOTTOM: 1px solid; BORDER-LEFT: 1px solid; VERTICAL-ALIGN: bottom; BORDER-TOP: 1px solid; BORDER-RIGHT: 1px solid" src="http://t3.gstatic.com/images?q=tbn:IC5PGgjMPPdaDM:http://nasadaacs.eos.nasa.gov/articles/images/2005_craters_meteor.jpg" alt="" width="132" height="66" /></a></p>
<p style="text-align: left;">Maybe the vague discomfort that we feel about awarding remedies in excess of the injury stems from some intuitive realization that our societal norms are not consonant with the spiritual values we were taught as kids.  Maybe the law encourages us to behave towards each other in a way that our Mamas wouldn&#8217;t approve of. </p>
<p style="text-align: left;">And if that&#8217;s so, let&#8217;s at least get it on the table.</p>
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		<title>Mediation Confidentiality Meets Attorney Malpractice</title>
		<link>http://businessconflictmanagement.com/blog/2010/02/mediation-confidentiality-meets-attorney-malpractice/</link>
		<comments>http://businessconflictmanagement.com/blog/2010/02/mediation-confidentiality-meets-attorney-malpractice/#comments</comments>
		<pubDate>Wed, 24 Feb 2010 02:40:23 +0000</pubDate>
		<dc:creator>F. Peter Phillips</dc:creator>
		
		<category><![CDATA[Mediation]]></category>

		<guid isPermaLink="false">http://businessconflictmanagement.com/blog/?p=475</guid>
		<description><![CDATA[A case from Oregon assists in understanding the implications of mediation confidentiality on dissatisfaction with attorney performance.]]></description>
			<content:encoded><![CDATA[<p>While working for a company, a guy opens up a competing business and lures away customers.  He is sued by his employer for fraud and breach of fiduciary duty.  Prior to trial he participates in a mediation, that is unsuccessful.  At trial he loses and is found liable for $364,000 in damages and $51,000 in attorney fees.</p>
<p style="text-align: center;"><img title="amazement" src="http://jameswoodward.files.wordpress.com/2009/07/amazement.jpg?w=400&amp;h=299" alt="amazement" width="125" height="86" /></p>
<p>What does he do?  What any red-blooded American would do &#8212; he sues his attorney in federal court for shoddy representation during the mediation.<span id="more-475"></span></p>
<p>This is <a href="http://scholar.google.com/scholar_case?q=mediation+confidentiality&amp;hl=en&amp;as_sdt=20000000002&amp;as_ylo=2009&amp;case=6578744628469273424" target="_self">Fehr v. Kennedy</a>, No. 08-1102-KI (D. Or. July 24, 2009).  The duplicitous employee (Fehr) claimed that his attorney (Kennedy) &#8220;failed to assess and advise [Fehr] of the risk of going to trial and specifically discounted and contradicted the mediator&#8217;s assessment of the likelihood of success of [the employer's] claims and the consequences of a loss at trial. Kennedy&#8217;s failures allegedly caused the Fehrs to reject an offer to settle the case which was much more favorable than the result achieved at trial.&#8221;</p>
<p>(That really is unforgivable, isn&#8217;t it?  I always remind counsel to bring their crystal ball with them when they come to the mediation &#8212; how could Kennedy have forgotten his?  Anyway&#8230;.)</p>
<p style="text-align: center;"><a id="apf0" href="http://images.google.com/imgres?imgurl=http://www.ecommons.cornell.edu/bitstream/1813/2962/1/Fig%25202-1%2520Fortune%2520teller.jpg&amp;imgrefurl=http://www.ecommons.cornell.edu/handle/1813/2962&amp;usg=___dbfFNbphLpo3DyW_vIjHi72jZQ=&amp;h=978&amp;w=1181&amp;sz=598&amp;hl=en&amp;start=1&amp;itbs=1&amp;tbnid=9SewKqkuShSnNM:&amp;tbnh=124&amp;tbnw=150&amp;prev=/images%3Fq%3Dfortune%2Bteller%26hl%3Den%26gbv%3D2%26ie%3DUTF-8%26tbs%3Disch:1"><img id="ipf9SewKqkuShSnNM:" style="BORDER-BOTTOM: 1px solid; BORDER-LEFT: 1px solid; VERTICAL-ALIGN: bottom; BORDER-TOP: 1px solid; BORDER-RIGHT: 1px solid" src="http://t0.gstatic.com/images?q=tbn:9SewKqkuShSnNM:http://www.ecommons.cornell.edu/bitstream/1813/2962/1/Fig%25202-1%2520Fortune%2520teller.jpg" alt="" width="150" height="124" /></a></p>
<p>Kennedy&#8217;s argument is simple, if somewhat appalling:  Fehr cannot prove his claim without revealing confidential mediation communications.  Kennedy, a communicant, does not consent to the disclosure.  Therefore, Fehr cannot prevail, and summary judgment must be granted to Kennedy.</p>
<p style="text-align: center;"><a id="apf10" href="http://images.google.com/imgres?imgurl=http://comps.fotosearch.com/comp/AGE/AGE018/afraid-astonished-amazement_~G96-616476.jpg&amp;imgrefurl=http://www.fotosearch.com/AGE018/g96-616476/&amp;usg=__S8yhdzkCBS041cpZbCPFnKnh7kQ=&amp;h=214&amp;w=300&amp;sz=16&amp;hl=en&amp;start=11&amp;itbs=1&amp;tbnid=GaBOEv9k8SdY8M:&amp;tbnh=83&amp;tbnw=116&amp;prev=/images%3Fq%3Damazement%26hl%3Den%26gbv%3D2%26ie%3DUTF-8%26tbs%3Disch:1"><img id="ipfGaBOEv9k8SdY8M:" style="vertical-align: bottom; border: 1px solid;" src="http://t2.gstatic.com/images?q=tbn:GaBOEv9k8SdY8M:http://comps.fotosearch.com/comp/AGE/AGE018/afraid-astonished-amazement_~G96-616476.jpg" alt="" width="146" height="99" /></a></p>
<p>The District Court agreed and made quick work of Fehr&#8217;s three protestations:</p>
<p>1.  <strong><em>This Isn&#8217;t the Same Case That Was Mediated</em></strong>.  The Oregon mediation statute prohibits disclosure in the course of the same or &#8221;ancillary&#8221; proceeding.  Malpractice ain&#8217;t fraud, says Fehr, so the confidentiality statute doesn&#8217;t apply.  No, says the court, the conduct alleged is sufficiently related to the prior proceeding, and the statute has been suffiently broadly interpreted, that this one counts too.</p>
<p>2.  <strong><em>Well Then It Must Be an Unconstitutional Constraint on Speech</em></strong>.  No law, says Fehr, can constitutionally forbid talking about something (especially about a tort) unless it is narrowly tailored, like admissions of liability made during settlement discussions.  The statements at issue had no bearing on this type of statement &#8212; rather, they were themselves evidence of malpractice, and cannot be barred by statute.  No, says the court.  If you agree to participate in a mediation then you agree to abide by the rules, as set forth in the Oregon mediation statute.  One rule is that you gotta shut up about mediation communications.</p>
<p>3.  <strong><em>It Was Not a Mediation Communication</em></strong>.  Fehr is trying to prove that advice given by his lawyer was lousy, and wants to introduce that advice in evidence.  He&#8217;s the client and can waive his own attorney-client privilege, so why can&#8217;t he?  No, says the court.  The mediation confidentiality statute has no exception for attorney-client communications concerning the mediation.  More to the point, in order to ascertain whether Kennedy gave bad advice the court would have to know what the other party offered and on what terms, what the mediator said to Fehr about the likely outcome at trial, what advice Kennedy gave Fehr about that offer, those terms and the mediator&#8217;s statements, and so on.  No, says the court, no no no.</p>
<p style="text-align: center;"><a id="apf9" href="http://images.google.com/imgres?imgurl=http://www.legaljuice.com/Da_Judge.gif&amp;imgrefurl=http://www.legaljuice.com/2007/08/&amp;usg=__1MYyW7N9b2rXdBaHm2AmK89LXtg=&amp;h=289&amp;w=266&amp;sz=18&amp;hl=en&amp;start=9&amp;itbs=1&amp;tbnid=Dgtr9RYDMJ5CYM:&amp;tbnh=115&amp;tbnw=106&amp;prev=/images%3Fq%3Djudge%26hl%3Den%26gbv%3D2%26ie%3DUTF-8%26tbs%3Disch:1"><img id="ipfDgtr9RYDMJ5CYM:" style="BORDER-BOTTOM: 1px solid; BORDER-LEFT: 1px solid; VERTICAL-ALIGN: bottom; BORDER-TOP: 1px solid; BORDER-RIGHT: 1px solid" src="http://t3.gstatic.com/images?q=tbn:Dgtr9RYDMJ5CYM:http://www.legaljuice.com/Da_Judge.gif" alt="" width="106" height="115" /></a></p>
<p>Seems like a good outcome, doesn&#8217;t it?  But I put it to you:  What if your attorney is so poor that, relying on his advice, you miss a chance to settle a case and end up being screwed?  Are mediation confidentiality statutes also attorney immunity statutes?</p>
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		<title>Understanding Interests Means Adding Value</title>
		<link>http://businessconflictmanagement.com/blog/2010/02/understanding-interests-means-added-value/</link>
		<comments>http://businessconflictmanagement.com/blog/2010/02/understanding-interests-means-added-value/#comments</comments>
		<pubDate>Wed, 10 Feb 2010 22:32:09 +0000</pubDate>
		<dc:creator>F. Peter Phillips</dc:creator>
		
		<category><![CDATA[Negotiation]]></category>

		<category><![CDATA[Teaching]]></category>

		<guid isPermaLink="false">http://businessconflictmanagement.com/blog/?p=468</guid>
		<description><![CDATA[A simple law school class exercise yields a satisfying result.]]></description>
			<content:encoded><![CDATA[<p>I told <a href="http://www.elainebromka.com" target="_self">my wife </a>that I wanted to do the following exercise with my 50-person ADR survey class at New York Law School:</p>
<p>&#8220;Find a partner and face each other.  Touch your palms together about face-level and then grasp each other&#8217;s hand.  The person who can get the other person&#8217;s hand past their own ear five times in the next fifteen seconds gets a hundred bucks.&#8221;</p>
<p>My wife&#8217;s response:  &#8220;Don&#8217;t do that!  They&#8217;ll hurt each other!  Say &#8216;No hurting&#8217; or &#8216;Be careful of each other&#8217; or something like that!&#8221;<span id="more-468"></span></p>
<p>I did the exercise at the end of a 100-minute class where we learned about negotiation theory and, particularly, the distinctions between positional and interest-based bargaining and between integrative and distributional bargaining.  We had lots of discussion about the lawyer&#8217;s duty to maximize the client&#8217;s outcome.  We played &#8220;<a href="http://media.wiley.com/assets/manual/sample_download.pdf" target="_self">Win As Much As You Can</a>.&#8221;  We discussed the <a href="http://serendip.brynmawr.edu/playground/pd.html" target="_self">Prisoners&#8217; Dilemma</a> and the strategy of &#8220;<a href="http://www2.owen.vanderbilt.edu/Mike.Shor/courses/GTheory/docs/Axelrod.html" target="_self">Tit For Tat</a>.&#8221;  We connected the dots by drawing <a href="http://www.sangraal.com/library/outside_the_box.htm" target="_self">outside the box</a>.</p>
<p>The plan was to culminate the session with this exercise, watch as they pushed and shoved each other, and then say with professorial hauteur, &#8220;Well you see this shows no learning.&#8221;</p>
<p>It didn&#8217;t go according to plan.  I gave the instructions.  Each of the 25 couples looked at each other and, almost immediately and with practically no speaking whatsoever, waved their grasped hands back and forth five times and then sat down. </p>
<p>I was flabbergasted.  &#8220;<a href="http://www.worldwidewords.org/qa/qa-gob1.htm" target="_self">Gob-smacked</a>,&#8221; as our Brit buddies so alarmingly put it.  Rather than competing to see which would win the $100, they each won.  Each earned $100, and the total dole-out was $5,000 rather than $2,500.  I congratulated them, they stared blankly at me, and we parted.</p>
<p>At the beginning of the next class we discussed what had happened.  I waxed rhapsodic about added value and cooperative negotiation and so on.  To them, on the other hand, it was utterly plain.  If they knew what the other guy wanted, and if the other guy knew what they wanted, and if both could get it, then they both should.  </p>
<p>Yes, I said, but real-life negotiation isn&#8217;t like that. </p>
<p>Why not, they asked. </p>
<p>Because the other guy never knows what you want, I said. </p>
<p>Why not, they asked. </p>
<p>Because you don&#8217;t tell them what you want, I said. </p>
<p>Why not, they asked. </p>
<p>Because they don&#8217;t tell you what they want, I said. </p>
<p>Why not, they asked.</p>
<p><em>Hrrumph</em>, I said, with professorial hauteur.</p>
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		<title>Theory Becomes Practice: A Project with Built-In Conflict Prevention</title>
		<link>http://businessconflictmanagement.com/blog/2010/02/theory-becomes-practice-a-project-with-built-in-conflict-prevention/</link>
		<comments>http://businessconflictmanagement.com/blog/2010/02/theory-becomes-practice-a-project-with-built-in-conflict-prevention/#comments</comments>
		<pubDate>Wed, 10 Feb 2010 21:13:48 +0000</pubDate>
		<dc:creator>F. Peter Phillips</dc:creator>
		
		<category><![CDATA[Conflict Resolution]]></category>

		<category><![CDATA[systems design]]></category>

		<category><![CDATA[conflict management]]></category>

		<guid isPermaLink="false">http://businessconflictmanagement.com/blog/?p=462</guid>
		<description><![CDATA[ A Peruvian mine constructs a "Mesa de Dialogo" that identifies and sensitively manages community concerns before they become conflicts. ]]></description>
			<content:encoded><![CDATA[<p>From the invaluable <a href="http://www.baseswiki.org/en/Main_Page" target="_self">BASESwiki</a> comes news of just the development I and others have pounded the table about:  A long-term project that features a formal and permanent &#8221;canary-in-the-mine&#8221; that identifies and addresses problems early on, and successfully prevents conflicts.<span id="more-462"></span></p>
<p>Thirty years ago the Peruvian government expropriated more than 2,000 hectares of land in the High Andes to develop the <a href="http://www.xstrata.com/operation/tintaya/" target="_self">Tintaya open-pit copper mine</a>.  The mine was subsequently privatized and operated first by <a href="http://www.bhpbilliton.com/bb/home.jsp" target="_self">BHP Billiton</a> and now by <a href="http://www.xstrata.com/" target="_self">Xstrata</a>.</p>
<p>The community complaints were numerous &#8212; lack of fair compensation for the land; forced evictions; water and air pollution; deterioration of the health of animals and people; loss of livelihoods. </p>
<p>With the assistance of Oxfam, BHP Billiton, and others, a &#8220;Mesa de Diàlogo&#8221; was established in 2000.  Four years later, an agreement was signed by all stakeholders to maintain the &#8220;Mesa&#8221; as a permanent mechanism through which solutions to any problems will be sought.  Sub-groups were established under the &#8220;Mesa&#8221; to focus on problems involving land, sustainable development, human rights abuses and the environment.  Participants include company representatives, community delegates, and members of NGOs.</p>
<p>Curiously, the company&#8217;s initial response to these community complaints was to defend its activities and question the truth of the claims made by the communities.  BHP Billiton eventually accepted the complaints, partly because the head office staff undertook their own investigations and no longer accepted at face value reports from mine site employees that had rejected community grievances.</p>
<p>The <a href="http://www.baseswiki.org/en/Tintaya_%E2%80%98Mesa_de_Di%C3%A0logo%E2%80%99_%E2%80%93_Dialogue_Table,_Peru" target="_self">report at BASESwiki </a>has more detail about an approach to conflict that seeks to prevent rather than to resolve disputes.  It is an impressive story that leaves the great question: <em><strong>WHY NOT OTHERS???</strong></em></p>
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		<title>Arbitrator Selection: How About a Compatible Personality?</title>
		<link>http://businessconflictmanagement.com/blog/2010/02/arbitrator-selection-how-about-a-compatible-personality/</link>
		<comments>http://businessconflictmanagement.com/blog/2010/02/arbitrator-selection-how-about-a-compatible-personality/#comments</comments>
		<pubDate>Mon, 01 Feb 2010 17:50:54 +0000</pubDate>
		<dc:creator>F. Peter Phillips</dc:creator>
		
		<category><![CDATA[Arbitration]]></category>

		<guid isPermaLink="false">http://businessconflictmanagement.com/blog/?p=452</guid>
		<description><![CDATA[A recent article suggests that, when screening arbitrators for a tripartite panel, a personality inventory might be time and money well spent. ]]></description>
			<content:encoded><![CDATA[<p><a href="http://www.mandw.com/mich.html" target="_self">Peter L. Michaelson</a> is an attorney <a href="http://www.mandw.com/intellectual%20property.html" target="_self">specializing in intellectual property</a>, and an <a href="http://www.mandw.com/accomplishments.html" target="_self">arbitrator and mediator of very substantial experience</a>.  He also enjoys cruises to Alaska, which may characterize his &#8220;beyond-the-boundaries&#8221; attitude when it comes to adding value to clients of ADR processes. </p>
<p style="text-align: center;"><img class="aligncenter size-medium wp-image-457" title="DSCN0854" src="http://businessconflictmanagement.com/blog/wp-content/uploads/2010/02/DSCN0854-300x225.jpg" alt="DSCN0854" width="180" height="152" /></p>
<p style="text-align: center;">(Pete Michaelson&#8217;s photo of an Alaskan buffalo, sauntering in Kodiak.)</p>
<p>He has recently published an article that brings out a little-remarked but potentially costly issue:  How to ensure compatibility among party-appointed arbitrators and encourage an efficient and professional arbitral panel.<span id="more-452"></span></p>
<p>Pete chose a snappy title for his piece, published by the Chartered Institute of Arbitrators:  <em><a href="http://www.mandw.com/PUBLICATIONS/CIArb%20-%20Enhancing%20Arbitrator%20Selection%20(2010%20-%2076%20Arbitration%2098--112).pdf" target="_self">Enhancing Arbitrator Selection: Using Personality Screening to Supplement Conventional Selection Criteria for Tripartiute Arbitration Tribunals</a>.</em>  And like any good title, it says it all!</p>
<p>Noting and regretting the &#8220;personality clashes&#8221; that can sometimes impede the work of a panel, Michaelson reviews the selection provisions of the main provider organizations and notes that none of them include compatibility as a criterion.  He writes that some commentators have recognized the problem: the &#8220;Ego-Tripper&#8221; who expounds on his own expertise; the &#8220;White Knight&#8221; who uses the proceeding to advance the cause of industrial justice; the &#8220;Whimp&#8221; who is unwilling or unable to exercise control; the &#8220;Unemployed Timeserver&#8221; who is disinclined to compel efficiency of the proceeding, having nothing more profitable to do with himself.  But none has suggested a solution.</p>
<p>Michaelson then reminds us that there are several personality measuring instruments out there that can be used online, are dead cheap, and can lend real insight into a prospective arbitrator&#8217;s ability to &#8220;play well with others.&#8221;  Two that I&#8217;m familiar with are the <a href="http://www.myersbriggs.org/my-mbti-personality-type/mbti-basics/" target="_self">Myers-Briggs Type Indicator (MBTI)</a> and the <a href="https://www.cpp.com/Products/tki/tki_info.aspx" target="_self">Thomas-Kilman Conflict Mode Instrument (TKI).  </a>These indicate the subject&#8217;s proclivity ot collaborate, compete, avoid, compromise or accommodate in the face of conflict.  Michaelson also notes and describes the <a href="http://www.onlinediscprofile.com/" target="_self">DiSC Classic </a>test and the <a href="http://keirsey.com/aboutkts2.aspx" target="_self">Keirsey Temperament Sorter</a>, with which I&#8217;m not familiar.  Apparently, each of these has a built-in &#8220;lie scale&#8221; that can detect inconsistencies in responses that might reflect efforts at deliberate manipulation.</p>
<p>Michaelson&#8217;s overall view is pretty compelling: The information gleaned from a personality screen may or may not be useful in a given case.  But when the arbitration process is so expensive, and when so many hundreds of millions are at stake, why would one wish to save the $200 it may cost to administer such a personality inventory, and remain ignorant of a critical aspect of the eventual process &#8212; whether the tribunal will work together in a principled, diligent and cooperative manner?</p>
<p>(And who will administer the MBTI to the buffalo, by the way?)</p>
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		<title>In March, Virginia is for [ADR] Lovers</title>
		<link>http://businessconflictmanagement.com/blog/2010/02/in-march-virginia-is-for-adr-lovers/</link>
		<comments>http://businessconflictmanagement.com/blog/2010/02/in-march-virginia-is-for-adr-lovers/#comments</comments>
		<pubDate>Mon, 01 Feb 2010 14:57:50 +0000</pubDate>
		<dc:creator>F. Peter Phillips</dc:creator>
		
		<category><![CDATA[Conflict Resolution]]></category>

		<category><![CDATA[International]]></category>

		<category><![CDATA[Mediation]]></category>

		<category><![CDATA[systems design]]></category>

		<category><![CDATA[ADR]]></category>

		<guid isPermaLink="false">http://businessconflictmanagement.com/blog/?p=446</guid>
		<description><![CDATA[Two interesting conferences are scheduled in March for Richmond and Lexington, Virginia]]></description>
			<content:encoded><![CDATA[<p>Two interesting conferences will take place in Virginia during the month of March &#8212; one focusing on investor-state dispute prevention and the other on a variety of challenges and opportunities faced by Virginia mediators.<span id="more-446"></span></p>
<p>On March 29, 2010, a symposium will be held at <a href="http://law.wlu.edu/" target="_self">Washington and Lee University School of Law</a>, in cooperation with the <a href="http://www.unctad.org/Templates/StartPage.asp?intItemID=2068" target="_self">United Nations Conference on Trade and Development (UNCTAD).  </a>The topic is <em>International Investment and ADR: Preventing and Managing Investment Treaty Conflict</em>. </p>
<p>The joint symposium aims to bring together academics, governments, practitioners and investors to discuss international investment agreements and ADR.  The hope is to use the symposium as an opportunity to generate ideas and explore good practices for managing investment treaty conflict in order to facilitate investment and create sustainable dispute resolution systems.</p>
<p>The leaders of the symposium have maintained an invitation-only blog to generate ideas for the event itself, and it has attracted robust contributions from a variety of participants, all operated under the <a href="http://www.chathamhouse.org.uk/about/chathamhouserule/" target="_self">Chatham House Rule</a>. </p>
<p><a href="http://icsid.worldbank.org/ICSID/Index.jsp" target="_self">ICSID</a> has promulgated <a href="http://icsid.worldbank.org/ICSID/ICSID/RulesMain.jsp" target="_self">Rules of Procedure for Conciliation Proceedings </a>for many years, addressing investor/state disputes, but they are admittedly flawed and have been very seldom invoked.  So a protocol for the businesslike resolution of such disputes as an alternative to the profoundly time-consuming and costly ICSID arbitration procedures is very much overdue.</p>
<p>The fascinating thing about this symposium, however, is that it is putting equal emphasis on dispute avoidance as on dispute resolution.  Some of the participants in the blog have made refreshingly clear that mechanisms to increase communication of changed political and economic conditions, or other means by which investors and state representatives can identify nascent issues and resolve them in their infancy, is just as important as formal mediation rules.</p>
<p>Moreover, it is acknowledged that such a capacity must be jointly designed and maintained by all the stakeholders in the project.  As one blogger put it, &#8220;If you build it, they will <em>not</em> come.&#8221;</p>
<p>This approach of joint commitment to early problem identification and solution is, of course, my mantra and I am ecstatic to find that such an illustrious group is giving it the weight it deserves.  Information on the March 29 symposium &#8212; which is open to the public &#8212; may be found <a href="http://investmentadr.wlu.edu/symposium/" target="_self">here</a>.</p>
<p>Meanwhile, in Richmond, the <a href="http://www.vamediation.org/" target="_self">Virginia Mediation Network</a> will be holding its Annual Spring Training Conference on March 7-8.  Among her many accomplishments &#8212; or perhaps in acknowledgemnt of them &#8212; the VMN is led by <a href="http://webdev.courts.state.va.us/drs/mediators/152.html" target="_self">Geetha Ravindra</a>, and the Keynote Speaker will be Kenneth Cloke, whose many achievements include co-founding <a href="http://www.mediatorsbeyondborders.org/" target="_self">Mediators Beyond Borders</a>.  The programming includes ethics issues, as well as discussions of restorative justice; the &#8220;truth and reconciliation&#8221; process as applied to Greensboro, New Orleans and other locales; and the Ombuds role in organizational transformation.  Virginia mediators and others might be well advised to take a look and consider attending.</p>
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		<title>SCOTUS Grants Cert in Employment Arbitration</title>
		<link>http://businessconflictmanagement.com/blog/2010/01/scotus-grants-cert-in-employment-arbitration/</link>
		<comments>http://businessconflictmanagement.com/blog/2010/01/scotus-grants-cert-in-employment-arbitration/#comments</comments>
		<pubDate>Tue, 19 Jan 2010 15:39:41 +0000</pubDate>
		<dc:creator>F. Peter Phillips</dc:creator>
		
		<category><![CDATA[Arbitration]]></category>

		<category><![CDATA[Employment]]></category>

		<guid isPermaLink="false">http://businessconflictmanagement.com/blog/?p=440</guid>
		<description><![CDATA[The U.S. Supreme Court has granted cert in an employment arbitration matter concerning over who decides the enforceability of arbitration agreements -- the precise question that shouldn't be raised in an employment context.]]></description>
			<content:encoded><![CDATA[<p>The Supreme Court granted cert Friday in an employment arbitration case addressing whether the arbitrator or the court should determine the enforceability of an arbitration clause.  The outcome could do mischief to the FAA and to Supreme Court precedent.  Once again there is reason to lament the harm that the practice of employment arbitration is wreaking upon commercial arbitration principles.<span id="more-440"></span></p>
<p><a href="http://www.supremecourtus.gov/orders/courtorders/011510zr.pdf" target="_self">Certiorari was granted</a> on January 15, 2010, in <a href="http://www.ca9.uscourts.gov/datastore/opinions/2009/09/09/07-16164.pdf" target="_self">Jackson v. Rent-A-Center West, Inc.</a> (9th Cir. September 9, 2009).   As the Ninth Circuit wrote, &#8220;The threshold question before us is whether a court or an arbitrator is to decide whether an arbitration agreement was unconscionable and hence unenforceable.&#8221;</p>
<p>The claimant, Antonio Jackson, was required to enter into an arbitration agreement with Rent-A-Center as a condition of his being hired.  The agreement permitted modification or revocation by the parties and allowed Jackson an opportunity for attorney review before signing.  The agreement also provided:</p>
<blockquote><p>The Arbitrator, and not any federal, state or local court or agency, shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this Agreement including, but not limited to any claim that all or any part of this Agreement is void or voidable.</p></blockquote>
<p>Jackson later asserted claims of discrimination under 42 U.S.C. § 1981 in the U.S. District Court in Nevada, alleging that the arbitration agreement was unenforceable because it imposed onerous costs on him; it limited discovery; and it lacked mutuality.   Before the District Court, Jackson could not demonstrate excessive costs (a determination that the Circuit Court accepted) and conceded that the discovery provision alone was not unconscionable.  Relying on the languange in the agreement that &#8220;clearly and unmistakenly provides the arbitrator with the exclusive authority to decide whether the Arbitration Agreement is enforceable,&#8221; the District Court granted Rent-A-Center&#8217;s motion to dismiss the suit and compel arbitration, holding that &#8220;the question of arbitrability is for the arbitrator.&#8221;</p>
<p>The Ninth Circuit reversed in part and remanded the matter to the District Court, with instructions that &#8220;the court must decide the threshold question of arbitrability when a plaintiff challenges an arbitration agreement as unconscionable, but the agreement provides that the enforceability of the arbitration agreement is itself an issue to be resolved through arbitration.&#8221;</p>
<p>Now, if you&#8217;re a party to a commercial agreement that includes an arbitration provision, how do you want this to turn out?  Say your goal is to stay out of court at any stage in the proceedings.  If the Ninth Circuit is affirmed, your counterpartycan allege that the arbitration agreement is invalid &#8212; however specious the grounds &#8211; and you will find yourself in court defending its enforceability.  (This is so even if the parties expressly and unequivocally agree that the arbitrator is vested with the power to make this determination and even, as the <em>Jackson </em>dissent observes, if it is &#8220;an arbitration agreement more favorable than most and unconscionability allegations that are thinner than most.&#8221;)</p>
<p>If on the other hand the Supreme Court overrules <em>Jackson</em>, and holds that arbitration agreements vesting arbitrability decisions to the arbitrator are valid on their face, is the holding of <a href="http://scholar.google.com/scholar_case?case=2717778595314053137&amp;q=first+options+kaplan&amp;hl=en&amp;as_sdt=2002" target="_self">First Options of Chicago v. Kaplan</a> somehow modified or extended, such that the mere recitation in an arbitration agreement of arbitral authority precludes a court from any investigation of alleged coercion or fraud?</p>
<p>Had this matter arisen in a dispute between merchants it would be abstruse but welcome.  But coming out of the employment sector it is weighted with additional, non-mercantile concerns of statutory enforcement, unequal bargaining power, and an entire basket of equitable and public policy concerns.  These issues are, one could argue, extraneous to the arbitrability issue <em>per se</em>, and threaten to skew arbitration law beyond its commercial, mercantile intent, and its original and fundamental utility.</p>
<p>But there you have it.  Fingers crossed (but for what?).</p>
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