Alternative Dispute Resolution

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By Mallory McKnight Fuller

When two parties agree to arbitrate, the obvious hope of the prevailing party is that the losing party will voluntarily comply with the arbitrator’s decision. This article is directed towards the situation in which the losing party refuses to so comply, and the prevailing party must petition the appropriate court system to “enforce” the arbitrator’s award.

Until confirmation, modification, or correction by a court of competent jurisdiction, an arbitration award is unenforceable under the law. The process for enforcing an arbitration award in Louisiana depends on whether the Federal Arbitration Act (“FAA”) or the Louisiana Binding Arbitration Law (“BAL”) applies.[1]

CONFIRMING ARBITRATION AWARDS

Whichever law applies, a party wishing to confirm an arbitration award must file a proceeding requesting confirmation of the award in a court of competent jurisdiction within one year of the award’s issuance.[2] While this one-year period is mandatory under the BAL, the federal courts of appeals are split on whether the same period is mandatory under the FAA. However, the U.S. Court of Appeals for the Fifth Circuit, which is the appellate court of federal jurisdiction over Louisiana, has implied that the one year limitations period is mandatory.[3]

In federal court, the FAA requires a party to begin the process of confirming an arbitration award by filing (and serving) either a petition or motion to confirm in the appropriate federal district court.[4]  Unlike the BAL, however, the FAA does not create independent subject matter jurisdiction, so the applicant must show that the federal district court has original subject matter jurisdiction over the dispute.[5]  The federal court has personal jurisdiction over the necessary parties once a party serves notice of the confirmation application on all parties.[6]

In both federal and state court, the confirmation of an arbitration award is a summary proceeding.[7]  The appropriate court will confirm the arbitration award (by granting the applicant’s motion) if no party challenges the enforcement of the award, and the court finds no grounds for vacating, modifying, or correcting the award.[8]  The court enters judgment on the award, which has the same force and effect as an ordinary judgment.[9]

VACATING, MODIFYING, OR CORRECTING AN ARBITRATION AWARD

Both the FAA and the BAL permit a party to challenge or request vacation, modification, or correction of an arbitration award.[10]  A notice of a motion to vacate, modify, or correct an arbitration award must be served upon the adverse party within three months after the award is issued.[11]  The grounds upon which an arbitration award can be changed or overturned are narrow and well-defined. Practically, this makes it very rare and difficult to alter an arbitration award.

Because arbitration is favored, both federal and state courts presume that an arbitration award is valid. Under the FAA and BAL, a court has authority to vacate an award only upon the following grounds:

  1. where the award was procured by corruption, fraud, or undue means;
  2. where there was evident partiality or corruption in the arbitrators, or either of them;
  3. where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or
  4. where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.[12]

The FAA and BAL also limit a court’s authority to modify or correct an arbitration award. An award can be modified or corrected only:

  1. Where there was an evident material miscalculation of figures or an evident material mistake in the description of any person, thing, or property referred to in the award.
  2. Where the arbitrators have awarded upon a matter not submitted to them, unless it is a matter not affecting the merits of the decision upon the matter submitted.
  3. Where the award is imperfect in matter of form not affecting the merits of the controversy.[13]

If one of these two grounds apply, the courts will modify or correct arbitration awards “so as to effect the intent thereof and promote justice between the parties.”[14]

AWARDS AND ORDERS SUBJECT TO APPEAL

Both the FAA and the BAL permit the appeal of certain arbitration orders, including any order confirming, modifying, correcting, or vacating an award.[15]  Under the BAL, a party appeals from an arbitration order or judgment entered on an award in the same manner as a party appeals from an ordinary order or judgment.[16]  The federal courts and Louisiana appellate courts review a trial court’s confirmation of an arbitration award de novo.[17]

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[1] Chapter 1 of the FAA governs domestic arbitrations and applies to maritime disputes and contracts “involving commerce.” 9 U.S.C. §§ 1-16. The BAL governs arbitration in Louisiana, unless preempted by the FAA. La. R.S. §§ 9:4201-9:4271.

[2] 9 U.S.C. § 9; La. R.S. 9:4209.

[3] Bernstein Seawell & Kove v. Bosarge, 813 F.2d 726, 731 (5th Cir. 1987) (noting the complaint to enforce the arbitration award was filed within one year “As required by 9 U.S.C. § 9”).

[4] If the arbitration agreement does not specify the particular court, the party applying for confirmation of the award may file in any court in the district where the award was issued. 9 U.S.C. § 9.

[5] Vaden v. Discover Bank, 556 U.S. 49 (2009).

[6] 9 U.S.C. § 9.

[7] Id.; La. R.S. § 9:4209; see also Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 22-23 (1983).

[8] 9 U.S.C. §§ 10-11; La. R.S. §§ 9:4205 and 9:4209.

[9] 9 U.S.C. § 13; La. R.S. § 9:4214.

[10] 9 U.S.C. § 11; La. R.S. § 9:4211.

[11] 9 U.S.C. § 12; La. R.S. § 9:4213.

[12] 9 U.S.C. § 10; La. R.S. § 9:4210.

[13] 9 U.S.C. § 11; La. R.S. § 9:4211.

[14] Id.; Gilbert v. Robert Angel Builder, Inc., 45,184 (La. App. 2 Cir. 4/14/10); 24 So. 3d 1109, 1113.

[15] La. R.S. § 9:4215; 9 U.S.C. § 16.

[16] La. R.S. § 9:4215.

[17] NCO Portfolio Mgmt., Inc. v. Walker, 08-1011 (La. App. 3 Cir. 2/4/09); 3 So. 3d 628, 632; Sarofim v. Trust Company of the West, 440 F.3d 213 (5th Cir. 2006)

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By Beau Bourgeois

Arbitration clauses are extremely common in construction contracts and subcontracts. In the event of a dispute, these clauses typically reflect the parties’ mutual agreement that any disputes arising from the project shall be arbitrated. Arbitration is similar to traditional litigation in many respects, but takes place out of court and is designed to be more efficient and cheaper. Both federal and Louisiana law strongly favor arbitration, and save a few exceptions, written pre-dispute arbitration agreements “shall be valid, irrevocable, and enforceable.”[1]

Whether a party is required to arbitrate rather than litigate first depends on two issues: 1) whether the agreement to arbitrate is valid, and 2) whether the agreement—by its terms—applies to the type of controversy at issue between the parties.[2]  Additionally, a party’s actions within a court proceeding can be deemed a “waiver” of the right to compel the same dispute into arbitration. In the typical dispute, the analysis will be straightforward, and the clause will be enforced, forcing the parties to resolve their dispute through binding arbitration rather than using the court system.

This article focuses on the admittedly rare situations in which a court may have proper grounds not to enforce an arbitration provision contained in the parties’ contract.

1.                  Contract Not Fully Executed by Both Parties

The threshold question in deciding whether parties must arbitrate is whether the parties actually agreed to arbitrate. In the typical scenario, both parties will have signed the contract containing the arbitration clause, and there will be no question that they agreed to arbitrate. Even if one of the parties does not know the contract contains the arbitration clause or does not understand its consequences, the party will still be required to arbitrate disputes. Louisiana courts have held that a signing party cannot avoid a contract’s terms by claiming that he did not read the contract, that he did not understand contract, or that the other party did not explain contract to him.[3]

Even when both parties to a contract do not sign, the parties may still be bound in certain scenarios. Louisiana law is clear that a party who prepares a contract and presents it to another for signature, but never personally signs, cannot later attempt to claim that he or she is not bound by the contract or its provisions.[4]  Thus, although many may think that they can escape the obligations of a contract that they did not sign, parties will often not be able to rely on such a technicality.

There is, however, an exception to this rule. A contract signed by only one party is not enforceable if the negotiations between the parties indicate that they have no intention of being bound until all of the terms of the agreement are incorporated into a written contract to be signed by both parties.[5]  A typical example is a situation where the parties orally negotiate the basic terms of an agreement but state that they want to have their managers or lawyers draft a formal, written document that both parties will sign. If there is never a written contract signed by both parties, there is never a contract or obligation to perform. It is important to note that a lack of contract does not necessarily mean that one party cannot be liable to the other. If one party begins performance or takes other action based on oral negotiations or promises, the other party may still be liable under theories of detrimental reliance or unjust enrichment.

Specifically as to arbitration agreements, despite a statute requiring them to be in writing, Louisiana law does not require the agreements to be signed to be enforceable.[6]  However, when an arbitration agreement—or contract containing an arbitration clause—lacks one or more parties’ signatures, the courts look to the conduct of the non-signing parties for evidence of intent to agree.[7]  Though no Louisiana court has yet addressed the issue, one could find that preparing and presenting a contract containing an arbitration provision is sufficient to show that party’s intent to agree to arbitrate. Otherwise the court will look to whether the non-signing party performed his obligations under the contract or otherwise acted as if the contract were enforceable. To avoid any uncertainty under this flexible inquiry, the party desiring the arbitration agreement should be sure to have both parties sign the contract for definitive proof of an agreement.

2.                  Unenforceable “Contracts of Adhesion”

Once a court determines that there was a mutual agreement to arbitrate, the clause will be enforced save some grounds for revocation of the contract such as fraud or error.[8]  Another relatively common ground upon which courts invalidate otherwise valid arbitration clauses is by finding that the agreement is a “contract of adhesion.” In general, a contract of adhesion is a printed contract—often in small font—prepared by one party with superior bargaining power presented to the other party in a “take-it-or-leave-it” manner. The nature of the contract is such that it raises questions as to whether the weaker party actually consented to its terms.

In these cases, the courts look beyond a party’s signature to determine if he or she truly consented to the arbitration clause. If an arbitration clause is adhesionary, the court will not enforce it and will allow the weaker party to proceed with a lawsuit despite their apparent agreement to arbitrate. In that sense, contracts of adhesion serve as an exception to the rule described above that a party is bound to contracts he or she signs regardless of knowledge or understanding of their terms. In the construction industry, these issues most often arise in the manufactured homes context where one party is a large corporation and the other is an individual buyer with little to no construction or business knowledge.[9]

Contracts of adhesion are typically standard form contracts; however, not all standard contracts are adhesionary and not all adhesionary contracts are in a standard form.[10]  The Louisiana Supreme Court has recently listed the factors to review in determining whether an agreement is an unenforceable contract of adhesion as follows: (1) whether the physical characteristics of the arbitration clause are deceiving (i.e., the font and size of the print), (2) whether the arbitration clause is distinguished from the rest of the agreement (i.e., whether the clause was concealed), (3) whether the clause requires both parties to pursue arbitration rather than a suit in court, and (4) whether one party has superior bargaining strength.[11]

The Louisiana Supreme Court has recently found an arbitration provision in a general waiver of liability signed by a patron of a trampoline park to be adhesionary. The arbitration provision of the waiver was the same size print and font as the rest of the electronic document. However, the two sentences regarding arbitration were “camouflaged” within a paragraph containing nine other sentences that did not pertain to arbitration. In addition, the waiver’s “I agree” language indicated to the Court that the agreement to arbitrate did not apply equally to the trampoline park, and the clause contained a liquidated damages provision which also only applied to the patron. Although the paragraph containing the provision had a box next to it that the patron affirmatively checked, the Court found that the patron’s electronic signature did not represent actual consent to arbitrate due to the adhesionary nature of the contract. Thus, the Court invalidated the provision.[12]

It should be noted that it would be almost impossible for one business to assert this defense against another because they would almost certainly have similar bargaining strength. Additionally, the party who does not want to sign a contract with an arbitration provision could easily walk away from the deal and work with someone else instead.

3.                  Waiver of Right to Arbitration

The rights provided by an otherwise valid arbitration clause can also be unintentionally “waived” by one of the parties. Louisiana courts have limited the waiver of arbitration to two situations where a party insisting on arbitration either (1) resorted to judicial remedies, or (2) allowed a significant period of time to elapse before demanding arbitration.[13]

Courts in Louisiana have found waiver of arbitration only in extreme cases.[14]  Waiver of arbitration is not a favored finding and there is a presumption against it.[15]  A party asserting waiver bears a heavy burden of proof to show that the opponent has waived a right to arbitrate, and there is a strong policy in Louisiana favoring arbitration when it has been agreed to by the parties.[16]  To find a waiver, Louisiana courts require a showing that the party demanding arbitration has meaningfully participated in court litigation proceeding so as to indicate its intention to litigate the dispute within that forum. Courts have been hesitant to draw a line in the sand as to how much litigation activity rises to the level of waiver, but one court has observed that the mere answering of a lawsuit does not equate to waiver.[17]

Although findings of waiver here are rare, the cautious litigant should assert its rights to arbitrate clearly and early in any separate court litigation. Courts do seem willing to review the entire record, rather than to fault a party for a single step taken in court. Still, a party’s argument for arbitration weakens to the extent the party continues to litigate the arbitrable dispute within court proceedings.

*         *         *

As noted, this entire article is geared towards the rare scenarios in which a court will not enforce an arbitration provision. Although the issues described above do arise from time to time, typically, if the clause applies to the particular dispute, a court will force the parties to arbitrate rather than litigate.

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[1] 28 U.S.C. § 2 (2016); La. R.S. 9:4201 (2016).

[2] Dicorte v. Landrieu, 908 So. 2d 799, 801 (La. Ct. App. 4 Cir. 2008).

[3] Aguillard v. Auction Mgmt. Corp., 908 So. 2d 1, 17 (La. 2005).

[4] Rainey v. Entergy Gulf States, Inc., 35 So. 3d 215, 227 (La. 2010).

[5] Id. (citing Big ‘A’ Sand & Gravel Co. v. Bay Sand & Gravel Co., 282 So. 2d 837 (La. Ct. App. 1 Cir. 1963)).

[6] Hurley v. Fox, 520 So. 2d 467, 469 (La. Ct. App. 4 Cir. 1988) (“La. R.S. 9:4201 provides that if the agreement to arbitrate is in writing, it shall be valid, irrevocable and enforceable. The law does not provide that the agreement must be signed. We conclude, therefore, that if the agreement between the parties is written, the provisions of the statute are satisfied even though the writing is not signed by the parties.”).

[7] In re Succession of Taravella, 734 So. 2d 149, 151 (La. Ct. App. 5th Cir. 1999).

[8] Duhon v. Activelaf, LLC, 2016-0818 (La. 10/19/16), 2016 WL 6123820.

[9] See e.g., Easterling v. Royal Manufactured Housing, LLC, 963 So. 2d 399 (La. Ct. App. 3 Cir. 2007); Dufrene v. HBOS Mfg., LP, 872 So. 2d 1206 (La. Ct. App. 4 Cir. 2004).

[10] Duhon, 2016 WL 6123820.

[11] Id.

[12] Id.

[13] Lincoln Builders, Inc. v. Raintree Inv. Corp. Thirteen, 37,965 (La. Ct. App. 2 Cir. 1/28/04), 866 So. 2d 326, 331 (citing cases).

[14] Matthews-McCracken Rutland Corp. v. City of Plaquemine, 414 So.2d 756 (La. 1982).

[15] Lorusso v. Landrieu Enterprises, Inc., 02-2346 (La. App. 4 Cir. 5/21/03), 848 So.2d 656.

[16] Electrical & Instrumentation Unlimited, Inc. v. McDermott International, Inc., 627 So.2d 702 (La. Ct. App. 4 Cir.1993).

[17] Matthews-McCracken, 414 So.2d 756 (La. 1982).

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By Josh Coleman

Conventional wisdom holds that arbitration is a more preferable mechanism for dispute resolution than full-blown litigation in the court system. Knowing nothing else about the particulars of a particular dispute, if arbitration is available as an alternative to state or federal litigation, we generally advise our clients to arbitrate.

However, that does not mean that arbitration is preferable to traditional litigation in all respects, or that arbitration is always well-suited to resolve a particular dispute. We often are asked by clients to evaluate the benefits of arbitration versus litigation. The purpose of this brief article is to set forth the general framework within which we address that question.

Pros of Arbitration

The primary benefits of arbitration are well-documented:

  • Lower Cost: On average, seeing a case through arbitration costs less to the client than does seeing a case through litigation. The lower costs relate closely to more-streamlined discovery and the shorter length of the entire procedure.
  • Controlled & Compacted Schedule: Arbitration offers a high degree of predictability in the scheduling of deadlines, hearings, and awards. Most arbitrations resolve within one year of initiation.
  • Knowledgeable Arbitrator: Arbitration parties typically select an arbitrator from a pool of subject-matter experts. The American Arbitration Association maintains a listing of local arbitrators with specialty designations in a variety of fields (e.g., commercial construction). An arbitrator with industry experience requires less education on technical aspects of the case.
  • Privacy: Arbitration proceedings are not on the public record. This is a benefit where the subject matter of the arbitration is commercially sensitive. Parties can agree prior to the arbitration to effectively “seal” any evidence and perhaps even the outcome of the arbitration.
  • Finality: Arbitration parties have no rights to appeal the substance of the arbitrator’s decision. This means that arbitration awards are generally final, therefore a party can plan accordingly once the arbitrator issues its decision.

Cons & Quirks of Arbitration

However, the negatives of arbitration are less discussed:

  • Multi-Party Difficulties: To enter into arbitration, parties either voluntarily agree to so enter, or are compelled by a court to submit to arbitration based upon a prior and valid agreement to arbitrate. This makes complex multi-party disputes tough to arbitrate. For example, CGL insurers on construction projects usually cannot be compelled to participate as a party in a construction defect arbitration between a claimant and the respondent insured. The more parties a case involves, the less likely that arbitration will be a feasible option.
  • Higher Filing Fees: Clients are often surprised at the up-front filing fees required by arbitration service providers such as the American Arbitration Association (“AAA”). Those fees depend upon the claim amount. For example, an AAA claim of $150,000 requires payment of $3,000 in purely administrative fees. The amount of the fees increase along with the claim amount, and for larger claims, can approach $15,000. Also, these fees are in addition to arbitrator compensation, which must be covered by the parties and usually resembles typical hourly attorney billing.
  • Summary Judgment Unlikely: In traditional litigation, the summary judgment procedure is an effective tool to resolve certain claims before trial. For example, if the parties agreed on the relevant facts but disagreed on the interpretation of their contract, such an issue would be ideal for early resolution in court via summary judgment. However, arbitrators rarely grant summary judgment motions, so this tool is not effectively available in arbitration. Several experienced arbitrators have commented to us that, due to the finality of arbitration and lack of an appeal procedure, they are extremely hesitant to dispose of any part of a case prior to the hearing itself.
  • Adverse Ruling Is Final: The finality of arbitration certainly works against a party facing an adverse decision by the arbitrator. State and federal courts offer substantive appeal procedures which involve close scrutiny over the lower court’s decision; no such mechanism is available in arbitration. In almost all cases, the loser is stuck with the arbitrator’s initial decision.
  • Limited Subpoena Power: Parties often require testimony or information from a party who is not named in the proceeding. The subpoena process is available in arbitration, but can be limited in scope and time-consuming to properly enforce.

*         *         *

It is true that arbitration is generally more preferable to court litigation as a dispute resolution mechanism. However, in cases in which a party has a choice over whether to arbitrate or litigate a particular dispute, the party should pay careful attention to the nature of the dispute in light of the pros, cons and quirks of the arbitration proceeding.

LouisianaPaddleboatStamp

By G. Trippe Hawthorne and Mallory McKnight Fuller

Click here to review a Practice Note explaining how to enforce arbitral awards in the state and federal courts in Louisiana.  This Note explains the procedure for confirming an arbitration award in Louisiana, and the grounds on which a party may challenge enforcement under Louisiana and federal law, including the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the Federal Arbitration Act (FAA), and the Louisiana Binding Arbitration Law (BAL). This Note also briefly explains the procedure for vacating, modifying, or correcting an arbitral award in Louisiana.

 

cons

By David K. Nelson*

Parties involved in the construction industry have long been familiar with mandatory arbitration as a dispute resolution procedure.

Originally arbitration was said to be more efficient and less expensive than litigation. Over time, experience has shown that arbitration is not necessarily more efficient or more timely.

Regardless of its potential benefits, one fact remains absolute – an arbitration ruling is almost always final and therefore not subject to appeal or review.  The Louisiana Supreme Court recently confirmed this fact in the case of Crescent Property Partners, LLC v. American Manufacturers Mutual Insurance Company, et al; 158 So.3d 798, 2014-C-0969 c/w 2014-C-0973 (La. 1/28/15).  In Crescent, the general contractor and its subcontractors filed motions for summary judgment with the arbitration panel alleging that plaintiff’s claims were preemptive because they were not filed within five years of the issuance of the Certificate of Occupancy.  The arbitration panel, relying upon the case of Ebinger v. Venus Construction Corporation, 10-2516 (La. 7/1/11), 65 So. 3d 1279, found that Ebinger dictated the retroactive application of the 2003 amendment to La. R.S. 9:2772 and ruled that plaintiff’s claims were untimely asserted outside the preemptive period.  The defendants filed suit in district court to confirm the arbitration ruling.  Plaintiffs opposed the filing and moved to vacate the award on the grounds that the arbitration panel ruling was not in accordance with law. The district court denied plaintiff’s application to vacate the award and confirmed the arbitration ruling the judgment of the district court.

Plaintiffs, thereafter, sought review in the Court of Appeal. The Court of Appeal reversed the trial court finding that the arbitration panel had incorrectly concluded the 2003 amendment reducing the time limitation from seven years to five years could be retroactively applied to preempt plaintiff’s claims. The general contractor and subcontractor thereafter requested the Louisiana Supreme Court to consider the issue.  The Supreme Court granted the writ “to determine whether the Court of Appeal ruling vacating the arbitration panel decision was proper.”

The Supreme Court recognized that the grounds for vacating an arbitration award are very narrow, and are limited to the exclusive grounds set forth in La. R.S. 9:4210, which provides:

In any of the following cases the court in and for the parish wherein the award was made shall issue an order vacating the award upon the application of any party to the arbitration.

  1. Where the award was procured by corruption fraud or undue means.
  2. Where there was evident partiality or corruption on the part of the arbitrators or any of them.
  3. Where the arbitrators were guilty of misconduct and refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy, or of any other misbehavior by which the rights of any party have been prejudiced.
  4. Where the arbitrators exceeded their powers or so imperfectly executed them that a mutual, final and definitive award upon the subject matter submitted was not made.

The Supreme Court ruled that the Court of Appeal erred in vacating the arbitration panel’s award stating: “The upshot of both the Court of Appeal’s reasoning and the arguments of Crescent is that the panel just got it wrong on the law. We reiterate our long line of jurisprudence that an error of fact or law will not invalidate an otherwise fair and honest arbitration award.” Crescent at 808.

The takeaway from this ruling is that absent proof of dishonesty, bias, bad faith, willful misconduct, on the part of an arbitrator, the arbitration ruling will be final and not subject to appeal—even if the arbitrator gets it wrong on the law and/or facts.

* Mr. Nelson serves as the Chair of the Construction and Commercial Litigation practice group of the Louisiana Association of Defense Counsel.

ref

By Linda Perez Clark

Beginning September 1, 2014, the American Arbitration Association (“AAA”) will require that any business using or intending to use the AAA rules in a consumer contract register the arbitration clause with the AAA. Upon submitting the clause, the AAA will review it for “material compliance” with the AAA’s due process standards contained in its Consumer Due Process Protocol and its newly-adopted Consumer Arbitration Rules (which will replace the AAA Consumer-Related Disputes Supplementary Procedures effective September 1, 2014).

If the AAA is satisfied that such compliance has been met, then the business will be included in the AAA’s publicly-accessible Consumer Clause Registry, which will contain a copy of the arbitration clause along with the business’s name and address. If the clause is determined non-compliant, then the AAA may decline to administer the case, and the parties may then submit their dispute to the appropriate court.

The AAA rules further require that the clause be submitted for registry at least 30 days before the planned effective date of the contract; but if a business does not submit its arbitration clause for review in advance of an arbitration being filed, the AAA will conduct a review at that time, for an expedited fee of $250, in addition to the standard initial registry fee of $650. The AAA also requires payment of a yearly, non-refundable fee of $500 to keep each clause registered. Any different arbitration clauses used by the same business or its subsidiaries must be separately registered and maintained, and any subsequent changes to a registered arbitration clause must be resubmitted. The AAA rules also provide that it will decline to administer an arbitration if the business has failed to pay the required fees.

An arbitration clause that satisfies the Federal Arbitration Act, along with a class action waiver, can effectively impede the use of class actions seeking recovery for individual de minimus claims. The U.S. Supreme Court has validated the enforceability of arbitration clauses for such purposes in a series of recent cases. It is therefore important to ensure that the clause is well drafted, and properly registered with the AAA so that it won’t be set aside when the business needs it most.

The AAA registry process can be found on their site at www.adr.org.

 

By G. Trippe Hawthorne

Lawyers often find themselves explaining the concept and process of mediation to clients and other people that have a need for a framework for dispute resolution other than the traditional adversary process. A traditional definition might be something like this:

Mediation is simply the name for a process that brings the parties to a dispute together with a neutral third party to identify and narrow disputed issues, develop options and consider settlement alternatives, in an effort to reach a consensual agreement that will accommodate the needs and interests of all. The Mediator is not empowered to impose terms on the parties, but rather facilitates communication, the exploration of alternatives, and encourages conciliation.

But if a picture is worth 1000 words, a great YouTube video is worth how many?

We can thank the Tennessee Association of Professional Mediators for Pigs, Pistols, and a Hanging: Mediation Meets the Hatfields and McCoys. This 3 minute video hits the high-points of what a mediation can offer, and features some fancy banjo-pickin’:

https://youtube.com/watch?v=R9rUHweAwI8

If you find yourself preparing for a mediation in a civil dispute, the American Bar Association Section of Dispute Resolution has published a helpful Complex Civil Mediation pamphlet that answers a clients’ basic questions about Mediation and raises other questions that should be considered and discussed. Some of the more important questions include:

  • identifying your actual interests (as opposed to positions);
  • identifying your best alternative to a negotiated agreement;
  • identifying and considering the opposing party’s actual interests; and
  • considering whether the parties would or could have a continuing relationship after resolution of the dispute.

The Guide is available here.