ADR Considered an Active Practice in Federal Courts

Posted on June 28, 2012 by Chris Poole

More than one-third of all federal trial courts authorize multiple forms of ADR and all federal courts authorize some form of ADR, according to a report released by the Federal Judicial Center.

A survey of courts’ local rules, general orders, internal operating procedures and other online and written sources shows that 34 of the 94 district courts authorize multiple and distinct forms of ADR, including mediation, arbitration or early neutral evaluation (ENE). Of these courts, 14 authorize three or more distinct forms of ADR. An additional 27 districts authorize mediation only, while 25 districts provide general authorization to use ADR, authorize settlement conferences or authorize both.

Across the district courts, the most commonly authorized form of ADR is mediation, authorized by 63 of the 94 districts. Twenty-three districts authorize use of ENE and 23 authorize use of arbitration. Of the 10 courts authorized by the Judicial Improvements and Access to Justice Act of 1988 to mandate arbitration, only three continue to require use of arbitration for the full portion of their caseload that meets the statutory requirements, while also offering mediation programs. Four others have made arbitration an ADR option and three no longer authorize this procedure.

The majority of districts authorize some degree of required use of ADR, particularly for mediation and ENE, either by giving judges the authority to refer cases on their own initiative without party consent, or by mandating referral for some or all civil cases. For mediation, for example, 58 districts authorize required use of mediation, including 12 that mandate use for some or all civil cases.

While the referral numbers and the profile formed on the basis of authorized procedures provides helpful information, the FJC report notes that its summary of ADR activity in the district courts is preliminary.

In the following months, the FJC will follow up on this initial report in the hope of providing answers to some of the remaining questions, such as the number of cases disposed of by ADR, and ADR’s impact on court caseloads and judicial workloads.

For more information or to view the entire study, click here.

Is Mediation the New Jury Trial?

Posted on June 26, 2012 by Scott Silverman (Retired Judge)

Scott J. Silverman (Retired Judge 11th Judicial Circuit)

Scott J. Silverman, Retired Judge 11th Judicial Circuit, is a JAMS panelist based in our newly opened Miami, Fla. Resolution Center. He served for nearly 22 years on the bench and distinguished himself as a stellar judge and one of South Florida’s highest rated circuit court judges.

Mediation is no longer a rarity in our court system – it’s quickly becoming the most common means of resolving a dispute. In fact, one might argue that “going to mediation” has replaced “taking it to a jury” when parties are faced with an unresolved conflict.

The statistics speak for themselves. In Florida, for example, juries heard one percent of all cases in 2000-01. Only 10 years later, the rate plunged to .20 percent, which is one-fifth of a percent of all cases that went to jury.

What does this mean? For one thing, lawyers who have trained to present their cases before a jury are now well advised to add mediation preparation to their roster of skills. It only makes practical sense.

Some litigators may resist the need to round out their experience, or put everything into a mediation on behalf of their clients. It works against accepted litigation strategy to lay all the cards out at mediation, for example. Many will feel it is better to keep an ace up their sleeve and a trump card in their pocket should the case reach an impasse. But it is usually better to let the opposing side know all of your strengths. Besides, the holder of the so-called ace or trump card often times places more value on it than it is actually worth. If the information is so damaging to the opposing party, and statistics show that there is a more than 99 percent chance the case is going to settle, isn’t it best to make your best and most complete presentation?

For the pragmatic litigator, a working knowledge of the Rules of Evidence is crucial. These days, however, it is arguably even more important to have a better understanding of the Rules of Civil Procedure and negotiating tactics. Cases are more often won and lost in the caucus room than in the jury room. Therefore, prepare your case as if you are going to trial, but mediate as if you are in trial. It’s reality.

FINRA to launch new program for large arbitrations

Posted on June 20, 2012 by Chris Poole

To read this article in its entirety on Reuters, please click here.

A pilot program that will give parties more flexibility in securities arbitration cases involving $10 million or more in claims will launch on July 2, according to a Financial Industry Regulatory Authority executive.

The FINRA program generally allows parties in large disputes to “shape their own arbitration,” said Linda Fienberg, president of FINRA’s dispute resolution unit. Parties that agree to use the pilot program can bypass certain FINRA arbitration rules and procedures by customizing the process to better suit their case needs.

For example, parties can hire arbitrators that may not be in FINRA’s arbitrator pool and develop their own procedures for exchanging information prior to the hearing.

FINRA, Wall Street’s industry-funded watchdog, runs the arbitration forum in which most investors and securities industry members are required to resolve their legal disputes against brokerage firms.

The pilot program is FINRA’s response to a surge in cases in which claimants are requesting significant awards, Feinberg said. There are more than 200 cases pending in FINRA’s arbitration forum involving claims more than $10 million, she said. Claimants, in a small number of those cases, are requesting as much as a $100 million, Feinberg said.

Some cases involve losses tied to structured products, typically notes whose performance is tied to an underlying security, such as a stock or index. There were only four such cases filed in FINRA’s arbitration unit in 2008, at the start of the financial crisis. There were 156 in 2011 and investors have filed 60 structured product cases with FINRA so far this year.

While large cases represent a small fraction of the roughly 6,500 pending at FINRA, they can be complex and extraordinarily time-consuming.

FINRA plans to ask the SEC to formalize the program through a new rule if the pilot is successful, Fienberg said. FINRA would have to offer the program for at least two years before it can consider a rule filing.

The Secret World of Mediation

Posted on June 15, 2012 by Chris Poole

JAMS takes you behind the scenes in the confidential world of mediation. Watch the video for never-before-seen footage of the discussions, negotiations and eventual settlement in this contentious mediation.