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Outline of Remarks Prepared For:
IOWA DEFENSE COUNSEL ASSOCIATION
INSURANCE DEFENSE PRACTICE SEMINAR
APRIL 7, 2006
DES MOINES, IOWA
I. INTRODUCTION – WHY CAN’T ARBITRATION BE MORE LIKE LITIGATION?
Attorneys want arbitration to be more like litigation.
Clients complain because arbitration is too much like litigation.
These are different processes, always have been and still are. We do disservice to both processes if we try to blend them and end up with the worst of both worlds.
Where are we headed?
We should be more sophisticated consumers of ADR. We should use arbitration when the process fits the case.
II. BINDING ARBITRATION – WHEN?
When a contract containing an ADR clause is central to your dispute.
When you do not have to prove your case through aggressive discovery
from your opponent’s file.
When your case does not depend significantly on discovery from non-parties.
When joinder of additional parties is not desired.
When you would otherwise choose a bench trial.
III. BINDING ARBITRATION – WHY?
If speed trumps attention to detail.
If economy trumps adherence to strict evidentiary standards.
If finality trumps reviewability.
If privacy trumps the public interest in open courtrooms and the development of legal precedent.
These values are client-driven, but the choices should be made prospectively and intelligently.
IV. BINDING ARBITRATION – HOW? (Part One: Pre-Dispute ADR Clauses)
The American Arbitration Association is the USA’s oldest and largest provider of ADR services. AAA arbitration cases are administered by the AAA pursuant to its appropriate rulebook (construction, commercial, employment, etc.). A case manager is assigned to the case by AAA to explain and implement the rules. AAA oversees the appointment of the arbitrator(s) unless the ADR clause provides for a different appointment process. The AAA charges administrative fees for its services. These fees can be substantial. The AAA’s Standard Arbitration Clause (see www.adr.org) provides as follows:
Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.
The NYC-based CPR Institute is a leading national and international provider of non-administered ADR services. CPR will assist the parties in the selection of neutral arbitrator(s), but the administration of the case is thereafter handled by the neutral, not by CPR. The CPR Institute’s Stand-Alone Arbitration Clause (see www.cpradr.org) provides as follows:
Any dispute arising out of or relating to this contract, including the breach, termination or validity thereof, shall be finally resolved by arbitration in accordance with the CPR Institute for Dispute Resolution Rules for Non-Administered Arbitration (then currently in effect OR in effect on the date of this agreement), by (a sole arbitrator) (three arbitrators, of whom each party shall appoint one; and a third arbitrator, who shall chair the Tribunal and who shall be appointed by the two party-appointed arbitrators or, in absence of agreement, by CPR pursuant to its rules). The arbitration shall be governed by the (Federal Arbitration Act, 9 U.S.C. Sections 1-16 OR Iowa Arbitration Act, Iowa Code Chapter 679A Sections 1-17), and judgment upon the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof. The place of arbitration shall be Des Moines, Iowa. (This CPR form modified by the author for demonstration purposes.)
The foregoing is not a complete list of ADR provider organizations. There are others, both for-profit and non-profit. Some are very good; others not so good. I have cited the basic arbitration clauses of AAA and CPR for illustrative purposes. It’s also true that I know these organizations and trust their services. You should make your own decision. Ask around.
V. BINDING ARBITRATION – HOW? (Part Two: Three Forms of Post-Dispute Submission Agreements)
The Basic Form:
1. The undersigned parties agree to arbitrate all issues (in the following described pending litigation: ……) (or) (the following described issues: …..).
2. The parties have selected Joe Smith of Des Moines, Iowa, to serve as arbitrator. Mr. Smith’s fees and expenses shall be shared equally by the parties.
3. The parties agree that AAA Commercial Arbitration Rules are applicable. However, this case shall not be administered by AAA.
4. The award rendered by the arbitrator may be entered by any court having jurisdiction thereof.
A Modestly Detailed Form:
1. The undersigned parties agree to arbitrate all issues (in the following described pending litigation: …..) (or) the following described issues: ….).
2. The arbitration shall be administered by the American Arbitration Association under its Commercial Arbitration Rules.
3. The parties have selected Joe Smith of Des Moines, Iowa, to serve as arbitrator. Mr. Smith’s fees and expenses shall be shared equally by the parties. If Mr. Smith is unable to serve, an arbitrator shall be selected by the parties or appointed by the AAA.
4. The arbitration shall be conducted in Des Moines, Iowa.
5. The arbitration shall be governed by the Iowa Arbitration Act, Iowa Code Chapter 679A, Sections 1-17.
6. The award rendered by the arbitrator may be entered by any court having jurisdiction thereof.
A Comprehensive Form of Arbitration Agreement:
1. The undersigned parties agree to arbitrate all issues (in the following described pending litigation: …..) (or) (the following described issues: …..).
2. The arbitration shall be administered by the American Arbitration Association under its Commercial Arbitration Rules, subject to the following:
The parties have agreed to the following specific rules and procedures on pleadings: …..
The parties have agreed to the following specific discovery rules and procedures which shall govern written discovery and depositions: …..
The parties have agreed to the following specific rules and procedures on the handling of dispositive motions: …..
The parties have agreed to the following specific rules and procedures on the service of subpoenas on deposition and hearing witnesses and the attendance of certain witnesses without necessity for service of a subpoena: …..
The parties have agreed to the following specific rules and procedures which shall govern the conduct of the hearing: …..
The parties have agreed to the following specific rules and procedures limiting the authority of the arbitrator, some of which shall be disclosed to the arbitrator and some of which shall not be disclosed, as follows: …..
3. The parties have selected Joe Smith of Des Moines, Iowa, to serve as arbitrator. Mr. Smith’s fees and expenses shall be shared equally by the parties. If Mr. Smith is unable to serve, an arbitrator shall be selected by the parties or appointed by the AAA.
4. The arbitration shall be conducted in Des Moines, Iowa.
5. The arbitration shall be governed by the Iowa Arbitration Act, Iowa Code Chapter 679A, Sections 1-17.
6. The award rendered by the arbitrator may be entered by any court having jurisdiction thereof.
VI. CONCLUSION - YOUR ADR FUTURE.
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Copyright 2006 Law Office of David J. Blair, P.C.
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