Online Dispute Resolution Update

As we head into 2017, I wonder about technology influencing the future of mediation as the prevalence of artificial intelligence in the law grows in areas like Electronic Discovery. Online Dispute Resolution (ODR) has been the subject of much debate and is more popular overseas than in America, though many online merchants have been using systems such as Modria for years on low dollar disputes to resolve customer issues. My colleagues and I have even debated the efficacy of such an impersonal form of Alternative Dispute Resolution in the Executive Council of The Florida Bar's ADR Section. Now, University of Maryland Law Professor Robert Condlin has authored an article entitled,“Online Dispute Resolution: Stinky, Repugnant, or Drab." In it, he provides an overview of currently existing processes and identifies potential consequences related to their use, suggesting refinements. For instance, most ODR programs require parties to describe their claims in fixed, predefined categories that may not capture all claims dimensions or limit the opportunity to argue substantive merits underlying their worth. He raises limits to the ability to resolve differences on the basis of private software algorithms that raise fairness issues not present in dispute resolution systems run principally by humans. Professor Condlin opines there are certain legal, political, and moral concerns yet to be addressed that ODR proponents must answer if online systems are to satisfy the demands of state-sanctioned, public dispute resolution. See more of the abstract here cited as U. of Maryland Legal Studies Research Paper No. 2016-40-- http://bit.ly/2iEp5Cf and materials from ADRHub's CyberWeek 2016 on the latest in predictive analytics for negotiation-- http://bit.ly/2i7uOj9

Gawker Settlement Approved in BR

This week, Gawker Media won court approval to repay creditors and settle the $140 million legal judgment awarded to former wrestler Hulk Hogan that drove the online publisher into Chapter 11 Bankruptcy. U.S. Bankruptcy Judge Stuart Bernstein of New York signed off on Gawker’s reorg plan. The settlement pays Hogan $31 million to resolve privacy litigation over Gawker’s publication of a highly publicized sex video. Approval of the plan ends a four-year legal fight between Gawker and Hogan in a case tried before a Florida jury earlier this year. Liability for the resulting verdict in Hogan's favor and Gawker’s failure to stay the judgment for purposes of appeal forced the bankruptcy. Reportedly, lawyers involved in the settlement say this brings the case to a close and extinguishes any possibility of appeal. Gawker sold most of its blogs, excluding its namesake site, to Univision for $135 million. Gawker’s Chapter 11 plan splits the company’s assets and sale proceeds among its creditors. The plan also includes settlements of other defamation lawsuits. Gawker maintained its stories subject to lawsuits were true, arguing First Amendment protection, but the expense of continuing to defend litigation would have been too much. Judge Bernstein said each of the settlements was reasonable for Gawker in light of the circumstances. The deal also shields former writers and editors from future lawsuits. In exchange for receiving that protection, the writers agreed to relinquish their rights to indemnification. The Wall Street Journal writes that the releases raised a novel issue on the intersection of bankruptcy law and the First Amendment and elicited a legal brief from a collection of journalism organizations in support of the legal protections. See more here-- http://on.wsj.com/2hjh0Bt

Wells Fargo Arb Clauses Fair Game in Fraud Cases?

The well-publicized Wells Fargo fraudulent account creation cases are being defended with lawyers arguing for application of arbitration clauses signed when customers opened their legitimate accounts. Plaintiffs argue the cases should be in court rather than arbitrated. Now Congress may weigh in with legistlation to carve out the cases. Lawmakers want consumers to be able to sue the bank in court over the fake account scandal rather than go through private arbitration. A bill introduced by Senate Banking Committee Ranking Minority Member Sherrod Brown and Congressman Brad Sherman called the Justice for Victims of Fraud Act of 2016 goes against the mandatory arbitration clauses that prevent customers from suing Wells Fargo. The case is pending in the U.S. District Court in Utah which has been asked in a motion to dismiss to order customers suing the bank to resolve their issues via arbitration. Wells Fargo is reportedly providing mediation services to affected customers for free. According to the bank, if a resolution is not reached, the arbitration clause allows for a forum in which customer disputes are heard and resolved quickly and efficiently with a neutral, third-party. This is the first class action lawsuit filed against Wells since it agreed to pay a $185 million penalty and return $5 million to customers for opening up to two million deposit and credit-card accounts in their names without their permission. The penalty by the Consumer Financial Protection Bureau (CFPB) is the largest fine levied from the government agency over account opening practices. According to an investigation by the CFPB, Wells Fargo employees not only made fake deposit accounts, but also submitted 565,443 unauthorized credit card account applications on behalf of unknowing customers. It’s estimated that 14,000 of those accounts accrued $403,145 in fees. Through its own independent investigation, the bank discovered a total of $2.6 million in unauthorized fees. Obviously, a new Congress and President next month could stymie this effort. See more here-- http://bit.ly/2hspkMj

Anniversary of E-Discovery Amendments

Today marks one year since significant changes were made in 2015 to the original 2006 federal rules on electronic discovery. Federal Rule of Civil Procedure 26(b)1 now emphasizes proportionality and seems to have influenced determining the expense or burden of proposed discovery in a more realistic way. The advent of technology assisted review has also brought costs down and is being employed more frequently by parties and is accepted and even encouraged by courts. My role remains as E-neutral, mediator or sometimes court-appointed special master to facilitate the electronic discovery process by helping parties to agree on the form in which they want information produced and the extent to which metadata will be produced. Mediation can feature private caucuses with retained experts or information technology liaisons that may help conduct discovery proportionally, minimizing motion practice, and avoiding sanctions and unpredictable judicial outcomes. Cooperation using alternative dispute resolution may also encompass settling procedures to be followed when discovering privileged information that has been inadvertently produced in the course of discovery, including clawbacks or agreed confidentiality orders. Rule 37(e) improved the safe harbor for mistakes in deletion, recognizing the volume of data generated is ever increasing and has made preservation more challenging. Sophistication of the parties is still taken into account in reasonable steps taken to initiate holds, but a lawyer's duty of competence in technology in more important than ever. Our E-Discovery & E-Neutral Services can help in that area, providing assistance by hosting Meet and Confer sessions, facilitating cost effective, mutually cooperative, and relevant ESI programs-- even in state court, with Mediated Case Management or Pretrial Stipulations under Florida Civil Rules 1.200 or 1.201. As Special Magsitrates, we are available to monitor E-discovery compliance or perform complex in-camera reviews for which judges don't have time. See more here-- http://www.uww-adr.com/services/e-discovery-and-e-neutral-services/index