Legal Practice Essentials and Arbitration Procedure Review

1. Agenda for 19th Class • Admin • Handouts • Name plates • Mock mediation on Friday • Remember to go directly to the assigned room (not this classroom) • Review of German procedure • Discussion of court visit • Settlement • ADR, focusing on arbitration • Introduction to fees and costs

2. Assignment • Friday • Prepare for Mediation • No Writing Assignment • Monday • Shavell handout • Finish A Civil Action • Pay special attention to fees • Questions / Writing Assignment • Problems on last page of Shavell handout • Given the settlement in A Civil Action, how did they calculate how much Schlichtmann and the other lawyers received?

3. Review of German Civil Procedure • Judicial control of fact finding • Judge questions witnesses • Judge selects experts • judge decides sequence • Career judiciary • De novo appellate review • But based on trial judge’s summary of evidence • Possibly cheaper and more accurate • Depends on adequate supply and quality of judges

4. Court Visit • Comments or questions? • Variety of Judicial Styles • Iqbal

5. Settlement • Settlement Problems • Settlement and A Civil Action • In what ways does A Civil Action confirm the validity of Polinsky’s economic model of settlement? • In what ways does A Civil Action contradict Polinsky’s economic model of settlement or suggest that the real world is more complex than that model?

6. Arbitration I • Adjudication by private judge under rules agreed to by parties • Must be agreed to by parties • Pre-dispute. In contract, before dispute arises • After dispute arises • Arbitration is legally binding • Party that agreed to arbitration and then changes its mind can be compelled to arbitrate • Court will dismiss case • Arbitrator can enter equivalent of default judgment • Arbitration awards are enforceable in court • Arbitration awards are not generally appealable • Arbitration may be through established organizations (non-profit or for profit) • American Arbitration Association, JAMS • Organizations have panels of arbitrators and set rules

7. Arbitration II • Parties to arbitration generally have control over who arbitrators are • Either agree on arbitrators in advance • Or agree to procedure for selecting arbitrator • E.g. Start with list and each side strikes those like least, etc. • Procedure may be set out in organization rules (AAA or JAMS) or may be negotiated by parties • Often arbitrators are retired judges, but can be anyone • E.g. Writers Guild has writers as arbitrators • Parties to arbitration generally have control over procedures • AAA and JAMS have rules that can choose • Or can set out own rules • E.g. Writers Guild. Everything in writing, no oral hearing or testimony

8. Arbitration III • Arbitration is controversial • Especially in consumer contracts • Where business may put arbitration clause in form contract stipulating defendant friendly arbitrators and procedures (e.g. no class actions) • Federal law promotes arbitration • Federal American Arbitration Act is interpreted to require states to enforce arbitration agreements, except in rare circumstances • Agreement was unconscionable or otherwise defective under ordinary state law contract principles (e.g. fraud, duress), or • Procedure violative of due process (e.g. biased judges) • Very hard to prove, even though probably often true, because business generally chooses arbitration procedures, including rules for selection of arbitrators • Businesses are “repeat players” • So arbitration providers have incentive to please business, otherwise business will choose other arbitration provider in future.

9. Next Class • Fees = Compensation to lawyer • Generally large. Approximately 1/3rd of judgment • English rule. Loser pays other side’s attorney fees • American rule, no reimbursement of other side’s lawyer’s fees • Except when explicitly allowed or mandated by statute • Costs = court fees • Generally small. • Loser pays, even in U.S.