Professor S.I. Strong (University of Missouri School of Law) has posted “Mandatory Arbitration of Internal Trust Disputes: Improving Arbitrability and Enforceability Through Proper Procedural Choices,” 28 Arbitration International __ (forthcoming 2012) on SSRN. The abstract is: Trusts and their civil law equivalents, often known as foundations or associations, play a large and increasing role in the global economy, holding trillions of dollars worth of assets and generating billions of dollars worth of revenue and trustees’ fees annually. Once considered nothing more than “mere” estate planning devices, trusts are now more often seen in commercial rather than in private contexts, and often feature sophisticated financial institutions as professional trustees. With favorable tax laws in various off-shore jurisdictions making international trusts increasingly popular and hostile trust litigation reaching epidemic proportions, arbitration would seem to be many parties’ dispute resolution mechanism of choice. To some extent, this is very much the case, with arbitration often being used to resolve conflicts between trusts and external third parties. However, arbitration of internal trust disputes – by far the more common type of concern in this area of law – is much more controversial and has been the subject of extensive and vigorous debate in the trust industry. Although trust experts have written extensively on mandatory trust arbitration, the arbitration community has been strangely silent in these discussions, and this Article is among the first to consider the unique challenges facing future arbitration of internal trust disputes from the arbitral perspective. In so doing, this Article provides new insights on the types of procedures that are necessary to ensure procedural fairness in what is often a complex, multiparty proceeding. This Article also considers what steps settlors can take to improve the enforceability of an arbitration provision located in the trust itself and analyzes the only set of institutional rules targeted specifically toward trust disputes – the American Arbitration Association’s (AAA) Trust Arbitration Rules – by comparing the AAA approach to the newly identified best practices in this field and to certain related initiatives from the International Chamber of Commerce (ICC) and the German Arbitration Institute (DIS). The full article may be downloaded here. Other scholarly papers by Professor S.I. Strong are here.

We invite you to check out The Three Little Pigs Go to Mediation video, created by the Department of Veteran’s Affairs, this interesting video explains and demonstrates the principles of mediation. The video is available here.

On June 8, 2012, the Texas Supreme Court granted petition for review to Rachal v. Reitz, 347 S.W.3d 305 (Tex.App.—Dallas 2011, pet. granted). The issue is whether a provision stating the settlor’s intent that disputes involving the trust be resolved by arbitration is enforceable under the Texas Arbitration Act . The appellate court had declined to compel arbitration on the grounds that a valid agreement to arbitrate did not exist. Here are the electronic briefs of the case: Petition for Review – Filed: 09/08/2011 [1.88 MB] Response to Petition – Filed: 01/04/2012 [80 KB] Petitioner’s Brief on the Merits – Filed: 03/19/2012 [195 KB] Respondent’s Brief on the Merits – Filed: 04/16/2012 [126 KB] Petitioner’s Reply Brief – Filed: 04/27/2012 Note that two articles by Professor S.I. Strong -contributor of this blog- have been cited in Petitioner’s Reply Brief. Stay tuned!

The following bills relating to alternative dispute resolution were introduced by the 112nd U.S. Congress. The session convened in Washington, D.C. on January 3, 2011 and will end on January 3, 2013. Click on the bill number to read its text and on the status link to find the bill’s most recent legislative action. Bills that passed: Patent Reform Act of 2011 (a.k.a. America Invents Act). The Act provides, among other things that parties to a derivation proceeding may resolve the dispute via arbitration. See Section 135(f). H.R. 1249; Status. H.R. 1249 was signed by President Obama on Sept. 16, 2011 and became Public Law No. 112-29. Department of Defense and Full-Year Continuing Appropriations Act of 2011. Provides, among other things, that “None of the funds appropriated or otherwise made available by this Act may be expended for any Federal contract for an amount in excess of $1,000,000 unless the contractor agrees not to—1) enter into any agreement with any of its employees or independent contractors that requires, as a condition of employment, that the employee or independent contractor agree to resolve through arbitration any claim under title VII of the Civil Rights Act of 1964 or any tort related to or arising out of sexual assault or harassment, including assault and battery, intentional infliction of emotional distress, false imprisonment, or negligent hiring, supervision, or retention.” H.R.1473; Status. The Act was signed by the President on April 15, 2011 and became Public Law No. 112-10. Bills still pending: Consumer Mobile Fairness Act of 2011. The bill would amend title 9 of the United States Code to prohibit mandatory arbitration clauses in contracts for mobile service. S. 1652; Status. Disaster Recovery Act of 2011. The bill would create a dispute resolution program to facilitate an efficient recovery from major disasters. S. 1630; Status. Personal Data Protection and Breach Accountability Act of 2011. As introduced, the bill provides that “the rights and remedies afforded by this section shall not be abridged or precluded by any predispute arbitration agreement. S. 1535 IS; S. 1535 RS; Status. Emergency Jobs to Restore the American Dream Act. The bill would create an emergency jobs program during 2012 and 2013. The bill provides that each unit of general local government that is an entitlement community and each State that receives funding under the Act shall agree to the arbitration procedure described in the Act to resolve certain disputes. H.R. 2914; Status. American Specialty Agriculture Act. The Act would create a non-immigrant H-2C work visa program for agricultural workers and provides that any H-2C worker may, as a condition of employment with an employer, be subject to mandatory binding arbitration and mediation of any grievance relating to the employment relationship. H.R. 2847; Status. Arbitration Fairness Act of 2011. Declares that no predispute arbitration agreement shall be valid or enforceable if it requires arbitration of an employment, consumer, or civil rights dispute. S.987; Status. H.R.1873; Status. Lat year, the ABA sent a letter to the sponsors of the legislation expressing concerns regarding certain specific language in the bill that could inadvertently void existing international commercial arbitration agreements and potentially discourage international commercial parties from engaging in commerce with U.S. parties. Labor Relations First Contract Negotiations Act of 2011. Amends the National Labor Relations Act to require mediation and, if necessary, binding arbitration of initial contract negotiation disputes. H.R.129; Status. Surface Transportation Board Reauthorization Act of 2011. Certain appropriations for the Surface Transportation Board, including requiring the Board to establish a binding arbitration process to resolve rail rate, practice, and common carrier service disputes. S.158; Status. Endocrine Disruptor Screening Enhancement Act of 2011. “In the event of any dispute about an appropriate share or a fair method of determining an appropriate share of applicable costs of the testing requirements in a test order, any person involved in the dispute may initiate binding arbitration proceedings by requesting the Federal Mediation and Conciliation Service to appoint an arbitrator from the roster of arbitrators maintained by such Service or a hearing with a regional office of the American Arbitration Association.” H.R.553; Status. Non-Federal Employee Whistleblower Protection Act of 2011. It includes provisions on the nonenforceability of waivers and arbitration of disputes. S.241; Status. National Guard Technician Equity Act. Provides for a technician’s rights of grievance, arbitration, appeal, and review beyond the current stage of the adjutant general of the jurisdiction concerned. H.R.1169; Status. Postal Operations Sustainment and Transformation Act of 2011. Section 401 of the Act includes arbitration and labor dispute guidelines. S.1010; Status. Soledad Canyon High Desert, California Public Lands Conservation and Management Act of 2011. Advises the use of arbitration under Subchapter IV of chapter 5 of section 5 of the USC. S.759; Status. FAA Air Transportation Modernization and Safety Improvement Act of 2011. Requires the FAA Administrator and employee bargaining representatives, if their own negotiations and the services of the Federal Mediation and Conciliation Service (FMCS) have failed to lead to an agreement, to submit their controversy to the Federal Service Impasses Panel, subject to specified procedures, for binding arbitration. H.R.658; Status. S. 223; Status. Medical Care Access Protection Act of 2011 (MCAP Act). The limitations within the act apply to arbitration, and nothing in the act is meant to supersede arbitration. S.197; Status. Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011. Provides that, “whether by arbitration or other means, in any health care lawsuit, the court shall supervise the arrangements for payment of damages to protect against conflicts of interest that may have the effect of reducing the amount of damages awarded that are actually paid to claimants.” S.1099; Status. S.218; Status. H.R.5; Status. U.S. Postal Service Improvements Act of 2011. Authorizes arbitration boards to consider the financial condition of the USPS in rendering decisions. S.353; Status. Preventing Homeowners from Foreclosure Act of 2011. Directs the Secretary of Housing and Urban Development (HUD) to implement a competitive grants program for states and local governmental entities to establish mediation programs to assist mortgagors under home mortgages facing foreclosure […]