by Holly Hayes One month ago, we started our health care conflict resolution series (see Part I, Part II, Part III, and Part IV) focusing on the Roger Fisher, William Ury Getting to YES principled negotiation method involving: 1. Separating the people from the problem. 2. Focusing on interests, not positions. 3. Generating a variety of possibilities before deciding what to do. 4. Insisting that the result be based on some objective standard. Our final post in this series focuses on “using objective criteria.” In almost any negotiation, no matter how many options are generated to “split the pie,” there is still going to be a conflict of interests. As seen in our previous posts, the physician wants to continue his vacation and the nurse on the unit wants him to sign his verbal orders per hospital policy, the radiology director wants to decrease patient complaints and the technician wants to be heard so he can be part of the solution, the physician wants to sell his practice for a high price and the hospital wants to purchase it for a low price, the ED manager wants housekeeping to help with the cleaning and housekeeping wants to work within its budgeted number of staff. In each situation, there are objective criteria that can be used to decrease the likelihood that the negotiation will become just a contest of wills and the ongoing relationship can be saved. Objective standards allow both parties to commit to reaching a solution based on principle, not pressure. In our examples, objective criteria could be hospital policy, regulatory standards, industry standards, standards used by local hospitals or physician groups or budgetary constraints. As the parties begin the process of identifying objective criteria, they can: 1. Jointly search for reasonable criteria. 2. Be open to the most appropriate standards and how they can be applied. 3. Never yield to pressure from the other party, but defer to objective standards. Pressure can take many forms: bribes, threats, manipulative appeals to trust or a simple refusal to back down. The principled response in each of these situations is the same: invite the other party to state their reasoning, suggest objective criteria that may apply and finally, refuse to budge except on the basis of objective criteria. This is the final post in our series on using the principled negotiation method in health care conflict. Look for future posts on Disputing on utilizing proven conflict resolution techniques specifically in health care. We invite your comments on this post and any suggestions for upcoming posts.   Holly Hayes is a mediator at Karl Bayer, Dispute Resolution Expert where she focuses on mediation of health care disputes. Holly holds a B.A. from Southern Methodist University and a Masters in Health Administration from Duke University. She can be reached at: holly@karlbayer.com.

by Michael McIlwrath The new international survey on arbitral practices has just been released. This iteration (the 4th), conducted by the School of International Arbitration of Queen Mary University and White & Case, captured responses from 710 in-house counsel, external counsel specialists, and arbitrators. It sought to answer these questions: to what extent are truly harmonized practices emerging in international arbitration? And if such practices are emerging, do they reflect the preferred practices of the international arbitration community? Some of the results provided with the Executive Summary of the survey are the following:   Selection of arbitrators ?? A significant majority of respondents (76%) prefer selection of the two co?arbitrators in a three-member tribunal by each party unilaterally. This shows that the arbitration community generally disapproves of the recent proposal calling for an end to unilateral party appointments. ?? There has been a long-standing debate about whether pre-appointment interviews with arbitrators are appropriate. The survey reveals that two-thirds of respondents have been involved in them,1 and only 12% find them inappropriate. The chief disagreement is not on whether such interviews are appropriate, but on the topics that may properly be discussed. ?? Almost three-quarters of respondents (74%) believe that party-appointed arbitrators should be allowed to exchange views with their appointing party regarding the selection of the chair.   Organising arbitral proceedings ?? The IBA Rules on the Taking of Evidence in International Arbitration (‘the IBA Rules’) are used in 60% of arbitrations: in 53% as guidelines and in 7% as binding rules. In addition, a significant majority of respondents (85%) confirm that they find the IBA Rules useful. ?? The most effective methods of expediting arbitral proceedings are (in order) ‘identification by the tribunal of the issues to be determined as soon as possible after constitution’, ‘appointment of a sole arbitrator’, and ‘limiting or excluding document production’.   Document production ?? Requests for document production are common in international arbitration: 62% of respondents said that more than half of their arbitrations involved such requests. ?? The survey confirms the widely held view that requests for document production are more frequent in the common law world: 74% of common lawyers, compared to only 21% of civil lawyers, said that 75-100% of their arbitrations involved such requests. ?? Notwithstanding the differing traditional approaches to document production in civil and common law systems, the survey reveals that 70% of respondents believe that Article 3 of the IBA Rules (‘relevant to the case and material to its outcome’) should be the applicable standard for document production in international arbitration.   Pleadings and hearings ?? Not only does sequential exchange of substantive written submissions occur much more regularly (82%) than simultaneous exchange (18%), there is also a strong preference for this type of exchange (79%). ?? The survey reveals that only a small minority (15%) of merits hearings are held outside the seat of arbitration. ?? The most common duration of a final merits hearing is 3-5 days (53%), followed by 6-10 days (23%), 1-2 days (19%) and 10+ days (5%). ?? Civil lawyers have traditionally claimed that their hearings are shorter than those of common lawyers – the survey confirms this to be true. 31% of civil lawyers said the average duration of their merits hearings was 1-2 days, compared to only 9% of common lawyers. ?? Time limits are imposed for oral submissions and/or examination of witnesses in two-thirds of arbitration hearings. Most respondents prefer some form of time limits (57%), while only 6% prefer no time limits at all (34% said it depends on the case).   The arbitral award and costs ?? How long should a tribunal take to render an award? For sole arbitrators, two-thirds of respondents believe that the award should be rendered within 3 months after the close of proceedings. For three-member tribunals, 78% of respondents believe that the award should be rendered either within 3 months (37%) or in 3 to 6 months (41%). ?? A common criticism of arbitration is that tribunals unnecessarily ‘split the baby’. Overall, respondents believe this has happened in 17% of their arbitrations, while those actually making the rulings – the arbitrators – said this occurs in only 5% of their arbitrations. ?? Tribunals allocate costs according to the result in 80% of arbitrations, and leave parties to bear their own costs and half the arbitration costs in 20% of arbitrations. However, only 5% prefer this latter approach, which shows there is a desire for tribunals to allocate costs according to the result even more frequently than they are currently doing. ?? An overwhelming majority of respondents (96%) believe that improper conduct by a party or its counsel during the proceedings should be taken into account by the tribunal when allocating costs. This sends a strong message to arbitrators that they are expected to penalise improper conduct when allocating costs. MICHAEL MCILWRATH is Senior Counsel, Litigation, for the GE Oil & Gas Division in Florence, Italy. His experience in international arbitration includes representing the company in disputes under the rules of various international and regional arbitration institutions and under ad hoc procedures around the world, and in coordinating the activities of outside counsel in domestic court and arbitral proceedings. He has published numerous articles in the fields of international arbitration, mediation, and negotiation, and is co-author, with John Savage, of International Arbitration and Mediation: A Practical Guide (Kluwer Law International). Michael is a member of the European Advisory Committee of CPR, and acted as an industry representative to the European Commission (Justice) in the creation of a European ADR Code of Conduct. He was Chair of the International Mediation Institute (IMI), in 2009. In addition, he was the co-vice chair with mediator Judith Meyer (and chair, Singapore ambassador at large Tommy Koh) of the IMI Independent Standards Committee. He is also a member of the board of directors of the National Center for Science Education, in Oakland, California.

  Professor S.I. Strong (University of Missouri School of Law) has published “Does Class Arbitration ‘Change the Nature’ of Arbitration? Stolt-Nielsen, AT&T and a Return to First Principles,” 17 Harvard Negotiation Law Review 201 (2012). The abstract is: In Stolt-Nielsen S.A. v. AnimalFeeds International Corp., the United States Supreme Court stated that class arbitration “changes the nature of arbitration,” an idea that was also reflected in the Supreme Court’s subsequent decision in AT&T Mobility LLC v. Concepcion. Certainly class proceedings do not resemble the traditional view of arbitration as a swift, simple, and pragmatic bilateral procedure with few witnesses, documents, or formalities, but do these types of large-scale disputes violate the fundamental nature of the arbitral procedure? This article answers that question by considering the jurisprudential nature of arbitration and determining whether and to what extent class arbitration fails to meet the standards necessary for a process to qualify as “arbitration.” During the course of the discussion, the article analyzes the ways in which class arbitration differs from other forms of multiparty arbitration and investigates whether a form of “quasi-arbitration” is in the process of developing as a means of responding to the demands of class proceedings. The full article may be downloaded here. Other scholarly papers by Professor S.I. Strong are here.

by Jeremy Clare The United States District Court for the Middle District of Pennsylvania denied a motion for reconsideration of the court’s order compelling arbitration because plaintiffs failed to establish a change in controlling law. Background In Brown v. Trueblue, Inc., No. 10-CV-0514 (M.D. PA April 16, 2012), Stephen Brown and Matthew Jury (“plaintiffs”), two employees of Trueblue, a temporary staffing agency, filed a complaint with the district court alleging that Trueblue’s payment system violated the Pennsylvania Minimum Wage Act, the Pennsylvania Wage Payment and Collection Law, and the Fair Labor Standards Act. Trueblue filed a motion to compel arbitration based on the arbitration agreements found in the plaintiffs’ employment agreement with Trueblue. The court granted Trueblue’s motion. The plaintiffs filed a motion for reconsideration of the court’s order to compel arbitration, or in the alternative, a motion for interlocutory appeal. District Court The plaintiffs filed a motion for reconsideration based on the National Labor Relations Board’s (“NLRB”) ruling In re D.R. Horton, Inc., in which the NLRB interpreted the effect of the Supreme Court’s ruling in AT&T Mobility v. Concepcion. In D.R. Horton, the NLRB held that “employers may not compel employees to waive their [National Labor Relations Act] (“NLRA”) right to collectively pursue litigation of employment claims in all forums, arbitral and judicial.” The plaintiffs argued that because the arbitration agreements prohibited classwide arbitration, they violated the new holding in D.R. Horton. The court first reviewed its order to compel arbitration to determine if any error occurred. Supported by Quilloin v. Tenet HealthSystem Philadelphia, Inc., a recent US Court of Appeals for the Third Circuit decision that considered the identical issue initially raised by the plaintiffs, the court found no error in its initial decision to compel arbitration. In Quilloin, the Third Circuit reversed a district court’s ruling to deny a motion to compel arbitration. The Third Circuit reasoned that Concepcion provided a new controlling precedent on the issue. The district court then considered whether the plaintiffs presented adequate justification for reconsideration of the motion to compel arbitration. The plaintiffs argued that the arbitration agreement was void pursuant to D.R. Horton. First, the court found that the plaintiffs’ arguments were not timely raised. The plaintiffs contended that they could not have raised the arguments when the court was addressing the motion to compel arbitration because D.R. Horton had not been decided at the time and that D.R. Horton represents a change in controlling law. However, the court noted that D.R. Horton cannot be interpreted as a change in controlling law. Instead, the court concluded that it is merely an interpretation of Concepcion, already controlling precedent, which the plaintiffs could have presented before their motion for reconsideration. If D.R. Horton was interpreted as a change in controlling law and conflicted with Concepcion’s interpretation of the Federal Arbitration Act, the court would have rejected the decision in D.R. Horton as conflicting with Supreme Court precedent. Therefore, the plaintiffs could have presented such an interpretation of controlling law prior to the motion for reconsideration, and because they did not, the argument was not properly raised in time. The court then determined that even if there were no procedural bar to the motion, it would still fail as a matter of law. The court noted that D.R. Horton is a decision regarding Sections 7 and 8 or the NLRA. The court found that it did not have jurisdiction to decide the issue because the plaintiffs’ argument for reconsideration is based on the NLRA and courts must defer such decisions to the NLRB. The court also determined that even if it did have jurisdiction over the issue, D.R. Horton would not bar arbitration in this case because D.R. Horton is narrower than the plaintiffs argued. Because the arbitration agreements at issue prohibited classwide arbitration, but not all class or collective actions, the court reasoned that they were consistent with the holding in D.R. Horton. In the alternative, the plaintiffs sought an interlocutory appeal of the order compelling arbitration. Citing 28 U.S.C. § 1292(b), the court concluded that the plaintiffs’ arguments did not warrant an order for interlocutory appeal. Section 1292(b) lays out three prongs which the plaintiffs had to meet for an interlocutory appeal: (1) the order must have concerned a controlling question of law; (2) there must have been a substantial ground for difference of opinion; and (3) an immediate appeal from the order would have materially advanced the ultimate termination of the litigation. The court concluded that the plaintiffs’ claims did not meet the latter two prongs. Finally, the court also denied the plaintiffs’ request for additional discovery. The plaintiffs claimed that the costs of individual arbitrations would be prohibitively expensive, but they failed to show any evidence that the costs of arbitration would preclude them from vindicating their statutory rights. Therefore, the court could not justify invalidating the agreements to arbitrate based on those claims. The plaintiffs then asked for additional discovery to show that the arbitrations would be prohibitively expensive. The court concluded that the plaintiffs sought discovery based on mere speculation and that the statutes they based their claims on (the Fair Labor Standards Act, the Pennsylvania Minimum Wage Act, the Pennsylvania Wage Payment and Collection Law, and the Check Casher Licensing Act) all provide for sufficient statutory remedies to ensure that individual arbitrations are not prohibitively expensive. Jeremy Clare is a law clerk at Karl Bayer, Dispute Resolution Expert. Jeremy received his J.D. from the University of Texas School of Law in 2012 and received a B.A. from the University of South Carolina where he studied political science.