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

An opportunity for mediation

Republishing this mediator's column from Vail Daily as I think it best sums up what I have felt since the election a couple of weeks ago:

As we adjust to the new paradigm resulting from the election, we are still struggling to balance the poles whose swing ushered in such change. We are subsumed by violent protests, physical and verbal attacks — the immature reactions of those who reside in the extremes. Negativity is the dominant theme as it hovers menacingly over our words and actions. Immersed in the present, worried about the future, we forget that our past is full of much greater hardships that were not only endured, but conquered. Any shift, seismic or minuscule, affords opportunities to evolve and prosper in the newly-created landscape. Typically, this is viewed pejoratively, as when financiers reap huge profits during recessions. But, exploitation need not be construed as negative. The forces of cooperation and compromise must be predatory, need to swoop in as a falcon would to take advantage of the opportunity to bridge our current gulf. Now is the opportune time for mediation to rise. We have proven that we are adept at fraction. Entire industries are devoted to furthering the divides that reside within our population; legal and media chief among them. We have mechanized the process of conflict, have given hate more than enough venues. Consequently and inevitably, our society has become so intensely stratified and segmented that it is nigh impossible to spot a cohesive whole. We are not united, we are untied. To again coalesce, we need guidance from those who have been trained to bring about cohesion. Mediators have devoted their lives to that cause and no time seems more apt for their ascendancy. Mediators are used to dealing with pessimism. Almost every mediation starts with declarations from the adverse parties that there is no way that the problem will be solved. As a litigator salivates over the thought of vanquishing the opposition, the mediator relishes the chance to bring two people together who are doing their utmost to stay apart. He does not shy away from a difficult situation, knowing that hardened hearts can soften with the right dialogue and the appropriate empathy. Mediators are used to dealing with fear. Because of the voluntary, non-binding nature of the mediation process, the fear of failure is absent, or at least should be. This fearlessness imbues the mediator with the ability to be more bold, more creative, more inspirational with his approach. The more seemingly intractable the problem, such as in our current national crisis, the more that the mediator can and must risk in order to close the gap. With the stakes at their highest, the potential for life-altering outcomes is within the mediator’s grasp. Mediators are used to dealing with pettiness. The mediator’s ears have heard levels of name-calling that would shame a second-grader. The mediator witnesses the most inconsequential details forming the basis for the most intense disagreements. He has seen people stand on principles so flimsy that they should be doused in marinara. He has been unable to prevent a person from walking away from an excellent compromise because of nothing but pure, unadulterated spite. The lack of grace is dispiriting, but it does not dissuade the mediator from his chosen endeavor. Mediators are used to dealing with rage. To remain placidly in the middle while each side stokes its emotional wildfire is the ideal to which every mediator is devoted. The fisticuffs are not always figurative. There are times when bodily harm is attempted, if hopefully not achieved. Mediators should carry umbrellas to shield themselves from the spittle that flies from those whose bellicosity leaves their minds and jaws unhinged. But, even in the face of this venom, a volatile environment is the mediator’s preferred habitat. Mediators are used to dealing with errors. The mediator does not operate in a world where the prevailing fiction is that perfection is possible. He is comfortable with flaws, his own and those of the people that surround him. The mediator intuitively understands that facts are relative to one’s perspective, that there are no absolute truths. It is the recognition of mutual culpability and vulnerability that allows the mediator to construct positive solutions. The mediator’s experience prepares him perfectly for this new, fractured epoch. It is not the litigators who will kill their golden goose of conflict. It is not the bankers who will preach abnegation. It is not the doctors who will stitch our psychic wounds, their hands being restrained by the overlords of insurance. No, it is the mediators who must assume the mantle of leadership to deliver us from a misaligned destiny.

-T.J. Voboril http://www.vaildaily.com/opinion/vail-daily-column-an-opportunity-for-mediation/

ADR Part of Long-Range Plan for FL Courts

A long-range strategic plan for Florida's Judicial Branch from 2016 to 2021 is available, published by the Judicial Management Council. It finds that Florida’s people depend on their court system to make fair, reliable, and prompt case decisions. The administration of justice requires deliberate attention to each case, a well-defined process to minimize delay, and the appropriate use of limited resources. It emphasizes the importance of our judicial branch in implementing practices which utilize resources effectively, efficiently, and in an accountable manner while continuing its commitment to fairness and impartiality. It specifically aims to promote the use of innovative and effective problem-solving courts and alternative dispute resolution (ADR) processes, such as mediation and arbitration. The report finds Florida’s courts are committed to equal access to justice for all. However, litigation costs, communication barriers, lack of information, complexity, biases, and physical obstructions can create difficulties for those seeking to access the courts to obtain relief. Therefore, it concludes the judicial branch must strive to identify and remove real or perceived barriers to better provide meaningful access to the courts. The judicial branch’s legal authority is a grant by the people, and public trust and confidence in the judicial branch is at the heart of maintaining a democratic society. Promoting public trust and confidence in the courts, it says, enhances the effectiveness of court actions, strengthens judicial impartiality, and improves the ability of courts to fulfill their mission. Finally, it resolves that improved communication, collaboration, and education efforts will better inform the public about the judicial branch’s role, mission, and vision. See more in report here-- http://bit.ly/2fE4ITI

Injunction Blocks New CMS Arb Ban

The implementation of a new rule prohibiting federal funds for nursing homes that enter binding arbitration agreements with residents has been blocked by U.S. District Court Judge Michael P. Mills of the Northern District of Mississippi, who found in granting a preliminary injunction that the Centers for Medicare & Medicaid Services (CMS) did not have authority to enact the mandate without statutory authority. In an order sympathetic to residents and their families, he opined the rule by CMS, an agency under Health and Human Services (HHS), did appear to be based on “sound public policy.” However, the court was unwilling to play a role in countenancing the incremental “creep” of federal agency authority beyond that envisioned by the U.S. Constitution. CMS essentially barred any nursing home or assisted living facility that receives federal funding from requiring that its residents resolve any disputes in arbitration, instead of in court. It is the most significant overhaul of the agency’s rules governing federal funding of long-term care facilities in more than two decades. The nursing home industry has said that arbitration offers a less costly alternative to court. Allowing more lawsuits, the industry has said, could drive up costs and force some homes to close. The order states, “This court believes that Congress might reasonably consider this inefficiency, as well as the extreme stress many nursing home residents and their families are under during the admissions process, as sufficient reason to decide that arbitration and the nursing home admissions process do not belong together.” See order here-- http://bit.ly/2gd06oL or http://bit.ly/2fOYdvi