MEAC's Latest on Reporting Settlements

Florida's Mediator Ethics Advisory Council (MEAC) recently considered an inquiry on reporting partial settlements. A mediator writes in that the inability to differentiate between a final and partial agreement on the face of the report as permitted by the mediation procedural rules has created an ethical dilemma in the need to report to the court the actual outcome of the mediation and the status of the case. The practitioner complains it is not only misleading to the court to report only "agreement" or "no agreement," it is also time consuming for the judges, judicial assistants or case managers to read every agreement to determine if it is final or partial agreement as opposed to being able to look at the report. MEAC found that in civil and family law cases only, with the consent of the parties, the mediator's report may also identify any pending motions or outstanding legal issues, discovery process, or other action by any party which, if resolved or completed, would facilitate the possibility of a settlement. To report anything additional without agreement of the parties, or add descriptors or modifiers to "agreement," "no agreement," or "partial agreement," would be providing information to the court, an action which is prohibited by the Mediation Confidentiality and Privilege Act, Sections 44.401-405, Florida Statutes. They did say, however, the rules do not restrict the parties from including in the written agreement their consent to the inclusion of additional language, descriptors, or modifiers in the mediator's report. See full advisory opinion here-- http://bit.ly/2j4YkZr

CFPB Arb Rule Appears Dead

Last night, Vice President Pence broke a 50-50 tie vote in the U.S. Senate, narrowly approving repeal of a rule that blocked financial companies from requiring consumers to resolve disputes with individual arbitration proceedings. The Senate vote followed earlier House approval and now goes to President Trump for his expected signature into law. The action is a defeat to the Consumer Financial Protection Bureau (CFPB), the federal financial industry watchdog group created under President Obama that approved the rule last summer with an effective date of March 19, 2018. It allowed consumer class actions against credit card companies and other financial institutions. The CFPB rule would have required sending a notice or to amend an arbitration agreement if entered into on or after March 19th and offered variable examples of language to use for agreements applying to multiple products or services, if not all were covered by the rule. According to the CFPB, there were two main parts: First, the final rule prohibited covered providers of certain consumer financial products and services from using an agreement with a consumer that provided for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action concerning the covered consumer financial product or service. Second, the final rule required covered providers involved in an arbitration pursuant to a pre-dispute arbitration agreement to submit specified arbitral records to the Bureau and also to submit specified court records. The bureau also adopted official interpretations to the proposed regulation. See full story here-- https://usat.ly/2h6FFIz and final rule language here-- http://bit.ly/2yKBRak

Mediation Week 2017

American Bar Association (ABA) Mediation Week is in progress and the theme this year is "Mediation, Civility and the Power of Understanding." As lawyers and mediators, we understand both the challenges and rewards of helping parties in conflict reach an agreement by getting past differences in positions, by understanding each other’s perspectives better, and by finding ways to get their important interests met while staying true to their values and belief systems. Programs held during ABA Mediation Week provide neutrals, advocates and policy makers with inspiration and tools necessary to bridge the gap that often prevents amicable resolution of disputes. Over the last few decades the field of alternative dispute resolution has grown tremendously, helping to clear dockets in the courts. The recognition that not all cases are well suited for the adversarial process and that there are multiple paths to justice is increasingly shared by attorneys, judges, and the public. ABA Mediation Week celebrates of the strides in institutionalizing mediation as one of several appropriate dispute resolution processes. Our firm is contributing by putting on a program this week at the University of Florida College of Law's Institute for Dispute Resolution. My topic is Language of Mediation in which my colleague and I look at destructive language patterns and modes of communication, including cultural metaphors and discourse analysis. Simply put, language has an impact on a subconscious as well as a conscious level. In the setting of conflict resolution, it offers concrete, positive alternatives to potentially destructive speech. With more awareness of the relationships among language, culture and diversity, a mediation participant’s sensitivity to the importance of structural and non-verbal aspects of communication should increase. See more on our UF program here-- http://bit.ly/2gklRkm

Divided Supreme Court Considers Workplace Arbitration

This week, the Supreme Court attempted to determine how far companies can go in insisting that disputes be resolved in individual arbitrations, rather than in court. The Court considered whether to give employers a powerful tool to bar class actions over workplace issues. The decision on this matter could affect some 25 million employment contracts according to the New York Times. A ruling in favor of employers, Justice Breyer said, could cut out “the entire heart of the New Deal” and undo an understanding of labor relations since the administration of FDR. Earlier cases ruled that companies doing business with consumers may require arbitration and forbid class actions in their contracts. Arbitration clauses with class-action waivers are commonplace in contracts for things like smartphones, credit cards, rental cars and nursing homes. Prior arbitration decisions have been closely divided, with conservative members in the majority. The justices now consider whether they should use a different approach for employment contracts. The answer depends on the interaction of two federal laws: the Federal Arbitration Act, which favors arbitration and the National Labor Relations Act, which protects workers’ rights to engage in “concerted activities.” Workers seeking to sue their employers for overtime pay and the like say the second law prohibits arbitration clauses that require class-action waivers. Reportedly, Justice Kennedy seemed ready to side with employers. Justice Gorsuch asked no questions. Justice Ginsburg said arbitration law was concerned with agreements between merchants of relatively equal bargaining power. The employment contracts at issue in the case, she said, have been forced on workers with "no true liberty of contract." In an unusual fashion, many cases were consolidated for a single oral argument and lawyers for the federal government actually appeared on both sides. Some justices suggested that workers could band together in a limited sense by hiring the same lawyer and filing individual arbitration cases. Justice Kagan suggested that was not good enough. See full article here-- http://nyti.ms/2yTgLUa Watch for decisions in: Epic Systems Corporation v. Lewis, No. 16-285, Ernst & Young v. Morris, No. 16-300 and National Labor Relations Board v. Murphy Oil USA, No. 16-307 which will be available this term here-- http://bit.ly/2yuxv7k

Banks Sue to Stop CFPB Arb Rule

Over a dozen U.S. banks and business groups sued the Consumer Financial Protection Bureau (CFPB) yesterday in an effort to block a new arbitration rule which goes into effect March 19, 2018 allowing consumer class actions against credit card companies and other financial institutions. The rule requires sending a notice or to amend an arbitration agreement if entered into on or after March 19th and offers variable examples of language to use for agreements that apply to multiple products or services, if not all are covered by the rule. The lawsuit, filed in the Texas, calls the structure of the CFPB, a watchdog agency established in response to the 2008 financial crisis, unconstitutional. Filed on behalf of the U.S. Chamber of Commerce, American Bankers Association and other groups, the suit argues the rule to be imposed on U.S. businesses will not help consumers and the change would actually hurt consumers. According to the lawsuit, "Arbitration gives consumers the ability to bring claims that they could not realistically assert in court, including the small and individualized claims that they care the most about. In contrast, class-action litigation is significantly less effective than arbitration in addressing consumer claims." The CFPB has defended the rule as a necessary protection for consumers. Reportedly, the CFPB is also being criticized by another regulator, the Office of Comptroller of the Currency (OCC). The CFPB arbitration rule could cause the interest rates on credit cards to rise significantly — as much as 25%, according to the OCC, which oversees the banking sector. See full story here-- http://lat.ms/2yglm5G and http://bit.ly/2x2OIV3

Seeking to Compel or Stay Arbitration?

I'm often asked about requesting courts to compel arbitration when the opposing party commences a lawsuit or otherwise expresses the intention to avoid arbitration of a dispute even though the dispute is subject to a valid arbitration agreement. If there is no lawsuit pending, a party may ask a court to compel the other party to arbitrate the dispute under the consented terms of a contract or arbitration clause in an agreement. If a lawsuit has been filed, the party seeking to compel arbitration may make the request by motion in the pending litigation. In that case, the practitioner should consider applying to stay the litigation pending arbitration, compel arbitration, or both. When a party objects, citing arbitration language in a written agreement, the Revised Florida Arbitration Code, F.S. §682.01 et seq., provides that any party may apply by motion for an order directing the parties to a lawsuit to comply with a governing arbitration clause. A party seeking to compel arbitration has the burden of establishing an agreement to arbitrate exists. The statutory process is as follows: F.S. § 682.015 Petition for judicial relief.— (1) Except as otherwise provided in s. 682.20, a petition for judicial relief under this chapter must be made to the court and heard in the manner provided by law or rule of court for making and hearing motions. (2) Unless a civil action involving the agreement to arbitrate is pending, notice of an initial petition to the court under this chapter must be served in the manner provided by law for the service of a summons in a civil action. Otherwise, notice of the motion must be given in the manner provided by law or rule of court for serving motions in pending cases. See http://bit.ly/2wxydLH

Hurricane Irma Will Bring Windstorm Claims

In the wake of this season's monster storm, Hurricane Irma, we are sure to see some claims from wind damage and resulting lawsuits which will need to be mediated. Florida law requires insurers of residential property to include hurricane windstorm coverage in such insurance policies. See §627.0629, Fla. Stat. Residential policies can be both personal lines (homeowner's coverage, mobile home, dwelling, tenant's, condominium unit owner's, cooperative unit owner's, and the like) and commercial lines (coverage provided by a condo association, coop association, apartment building, and similar policies, including those covering the common elements of a homeowners' association). See §627.4025, Fla. Stat. “Hurricane coverage” is coverage for loss or damage caused by windstorm during a hurricane. It includes ensuing damage to the interior of a building, or to property inside a building, caused by rain, sleet, hail, sand, or dust if the direct force of the windstorm first damages the building, causing an opening through which rain, sleet, hail, sand, or dust enters and causes damage. “Windstorm” means wind, wind gusts, hail, rain, tornadoes, or cyclones caused by or resulting from a hurricane that results in direct physical loss or damage to property. “Hurricane” means a storm system that has been declared to be a hurricane by the National Weather Service's National Hurricane Center. A hurricane includes the time period (1) beginning when the National Hurricane Center issues a hurricane watch or warning for any part of Florida, (2) continuing for the time period during which the hurricane conditions exist anywhere in Florida, and (3) ending 72 hours after the National Hurricane Center terminates the last hurricane watch or warning issued for any part of Florida. Please keep this in mind once the storm passes and be safe out there! For more information, see complete statutory language here-- http://bit.ly/2wMpd7h and http://bit.ly/2xdT2R7