CH 3 – ALTERNATIVE TO DISPUTE RESOLUTIONS

1. CH 3 – ALTERNATIVE TO DISPUTE RESOLUTIONS

2. Alternatives to Litigation • TRIALS – • Cost of litigation – What are the costs, expenses • How long to get to a trial • What is “Alternative dispute resolution” (ADR)

3. ADR • Mediation -3rd party (mediator) who tries to settle the case. • Arbitration – a private judge actually makes a decision.

4. Mediation • A Mediator: • Process of Mediation • Advantages: • Costs:

5. Tennessee Mediation • Rule 31 certified • Family – domestic violence • Civil

6. Union CBA Arbitration • Collective bargaining agreement • Different than consumer arbitration • Union and Company “order” choice of arbitrators and then pick

7. Federal Arbitration Act • Section 4: federal court can enforce arbitration clause. • Section 9: arbitrator’s decision confirmed in federal court. • Final decision in union cases

8. Mandatory Arbitration • Video; • Examples: • Are these clauses upheld?

9. 7th Amendment • http://7thamendmentadvocate.org • "In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law." - - The 7th Amendment to the Constitution of the United States of America

10. Mandatory Arbitration Clauses • take it or leave it • No right to go to court • Company gets to pick the arbitrator • No appeal unless arbitrary/capricious (fraud) • Confidential • Prevents class action lawsuits • May have to pay money for arbitrator upfront • Must travel to them for arbitration hearing • No rules • And if lose – have to pay all fees $$$$$

11. APPEAL ??? No real right to appeal to court unless you prove the arbitrator’s decision is arbitrary and capricious. In other words, MUST BE REALLY GOOD REASON: Fraud or corruption. Company choosing arbitrator is NOT a good reason.

12. Disadvantages of Arbitration • Opinions – Oral or written? Published? • Do not follow set of rules with regard to evidence • Who picks arbitrator (different for union cba) • Consumer may have to pay arbitrator’s fee up front

13. Costs • Arbitration costs, as contrasted with court costs, are frequently borne, at least partially, by the consumer. • These costs may substantially exceed the recovery sought. • The Supreme Court has stated, “[T]he existence of large arbitration costs could preclude a litigant…from effectively vindicating her federal statutory rights in the arbitral forum.”36 These costs may begin at $500 per day and may exceed several thousand dollars.

14. California, changed its law to require that arbitration results be publicly recorded. • 34,000 California cases, consumers lost 94 percent of the time.

15. US Supreme Court Cases • US Supreme Court has issued three decisions that enforce mandatory arbitration in employment contracts.

16. In AT&T Mobility v. Concepcion, the Court allowed corporations to ban class actions in their contracts for arbitration.

17. Results to Consumers……. • Concepcion permits all sellers of goods to evade all state consumer protection laws by inserting into the contract a mandatory arbitration clause barring class actions • No one is going to engage in individual arbitration where the loss is the purchase price - even if the purchase price is several hundreds or even thousands of dollars • Cannot recover more in arbitration

18. CompuCredit Corp. v. Greenwood CompuCredit marketed a credit card promising "no deposit required" but then consumers fees of almost $300 before they received the card. Wanda Greenwood sued -violated the federal Credit Repair Organizations Act (CROA), which prohibits charging fees in advance for credit repair and requires disclosure of consumer rights. Was Arbitration compelled?

19. Example - Cruise Ship • In the cruise industry, arbitration clauses have been used to limit the right of passengers to sue in certain circumstances. • Forum shifting clauses limit where any suit against the cruise line can be filed. • Together, these clauses make it very difficult to pursue proper compensation for passengers who come from all over the world.

20. Costa Concordia • Passengers of the Costa Concordia have discovered the lengths to which companies have gone to protect themselves from liability. • For people who suffered serious injuries and the families of those who died in the cruise disaster, the ticket fine print could cost them the chance to sue for any damages at all. • Among the rights that most cruise passengers unknowingly sacrifice are the rights to seek punitive damages or to claim compensation for emotional distress

21. The Kurth family filed a claim in Racine County Circuit Court, and shortly thereafter Kindred moved to dismiss the lawsuit and force the family into binding mandatory arbitration.

22. Employment Law • GILMER v. INTERSTATE/JOHNSON LANE Corp. – • Sign mandatory arbitration – cannot file a lawsuit for Age Discrimination Claim ADEA

23. Mandatory Arbitration Clause-Doctors • In Florida, you must now sign a pre-treatment mandatory arbitration agreement in addition to the already required forms. • Florida is one of the first states where mandatory arbitration provisions were introduced in order to receive medical care. • First Professional Insurance Company (FPIC), one of Florida’s largest medical malpractice liability insurers introduced pre-treatment mandatory arbitration agreements to limit medical malpractice liability.

24. Echoing the 2003 Florida Legislature’s findings that arbitration benefited both plaintiffs and defendants by reducing attorney’s fees, litigation costs, and delay. • 2008 FPIC reported to its insureds that, “Binding arbitration affords potential benefits to both physicians and patients. • The court upheld the format and language of the FPIC mandatory arbitration agreement in 2008 specifically holding that they were not procedural nor substantive unconscionability and that pre-treatment mandatory arbitration agreements did not violated public policy or any statutory rights.

25. 2013 Arbitration Fairness Act The Arbitration Fairness Act invalidates agreements that require the arbitration of employment, consumer, antitrust, or civil rights disputes made before the dispute arises. The Arbitration Fairness Act does not restrict the use of agreements when two parties choose to arbitrate after a dispute arises.

26. Arbitration Fairness Act It restores the rights of workers and consumers to seek justice in our courts. It ensures transparency in civil litigation. And it protects the integrity of the Civil Rights Act, the Equal Pay Act, the Americans with Disabilities Act, and the Age Discrimination in Employment Act, among others.

27. International Dispute Resolution • Forum Selection and Choice-of-Law clauses in contracts govern the transaction. • Arbitration clauses are generally incorporated into international contracts.