On May 29, 2010, the International Bar Association (IBA) Council adopted new Rules on the Taking of Evidence in International Arbitration. The new Rules, developed by a Subcommittee comprised of 22 practitioners from a wide variety of legal systems, reflect the first amendments since 1999. The revised rules apply to any agreement to use the IBA Rules made after May 29, 2010. According to the January 18, 2011 American Bar Association Section of International Law Arbitration Committee Call Minutes, the more substantive Rules, conform to the actual practice of parties and tribunals in international arbitrations: The revised rules now expressly incorporate a requirement of good faith in taking evidence. While uncontroversial, the implications of this rule, and whether it will lead to anything new in practice, are still unclear. The revisions now provide that the tribunal is to meet and consult with the parties at the earliest appropriate time regarding anticipated evidentiary issues. This frequently occurs already, either by way of institutional rules or simply as a matter of practice. Again consistent with actual practice, under the new revisions, documents are to be produced in the first instance only to the opposing party, and not to the tribunal. The amendments now provide greater guidance to the tribunal on how to address requests for documents or information maintained in electronic form, e.g., by way of limiting to certain document ‘custodians’ or by using a list of search terms designed to cull out irrelevant documents. Confidentiality protections governing documents have been expanded; now, any documents submitted in an arbitration, whether by a party or non-party, are automatically considered confidential. This revision was designed to account for the wide variation in national laws on this subject. The revisions provide more specific guidance for arbitrators regarding issues of legal privilege; however, the rules do not endorse or adopt any single approach as they vary across jurisdictions. Disputing previously discussed the new Rules here. More information, including a link to the new IBA Rules, is available here. Technorati Tags: law, ADR, arbitration

Last week, Thomas J. Stipanowich, William H. Webster Chair in Dispute Resolution and Professor of Law at Pepperdine School of Law, and Academic Director of the Straus Institute for Dispute Resolution, was the keynote speaker at Fordham Law School’s Fifth Annual Alternative Dispute Resolution Symposium. At the Symposium, Professor Stipanowich presented a paper entitled “Revelation and Reaction: The Struggle to Shape American Arbitration.” The paper discusses the U.S. Supreme Court’s recent Stolt-Nielsen S.A. v. AnimalFeeds International and Rent-A-Center, West v. Jackson decisions and will be published in Contemporary Issues in International Arbitration and Mediation: The Fordham Papers (2010). Thanks to Paul Lurie, Partner at Schiff Hardin, LLP’s Chicago office, Disputing obtained a pre-publication version of Professor Stipanowich’s paper. The paper offers readers a timely and clear analysis of the two Supreme Court decisions and their effect on arbitration jurisprudence. First, Professor Stipanowich provides a brief history of U.S. Supreme Court decisions related to arbitration in recent decades and how the decisions expanded federal substantive law under the Federal Arbitration Act. Next, the author examines the limiting effect the Court’s decisions in Stolt-Nielsen and Rent-A-Center, West have had on the ability of lower courts to police arbitration agreements. After that, Professor Stipanowich explores arbitration reform efforts and “the dynamic political response to the extreme, non-nuanced pro-arbitration position developed in modern Court jurisprudence.” Finally, the paper concludes with a call “for carefully crafted legislation or administrative regulations limiting the use of arbitration agreements in adhesion contracts or establishing due process standards for such agreements.” The paper may be downloaded (without charge) from Social Science Research Network. In the future, Professor Stipanowich will expand upon this paper by analyzing the Supreme Court’s much anticipated decision in AT&T Mobility LLC v. Concepcion in an article entitled “The Third Arbitration Trilogy.” More information about the AT&T case is available here. Technorati Tags: law, ADR, arbitration

by Holly Hayes The Joint Commission Journal on Quality and Patient Safety published a two-part article in the February 2011 edition entitled “A Strategic Approach for Managing Conflict in Hospitals: Responding to the Joint Commission Leadership Standard.” The articles by Charity Scott and Debra Gerardi were published as Part 1 and Part 2. Part 1 begins by reviewing Conflict Management Standard LD.01.03.01 which states, “The governing body is ultimately accountable for the safety and quality of care, treatment, and services.” Elements of Performance, or how The Joint Commission will score the standard, include: Development of a code of conduct that defines acceptable, disruptive, and inappropriate behaviors; and creation and implementation of a process for managing disruptive and inappropriate behaviors. Read more here. The abstract for Part 1 of the article states The Joint Commission has numerous standards and alerts that address: the significant impact of relational dynamics on patient safety and quality of care and the critical need for a strategic approach to conflict in health care organizations. Whether leadership conflicts openly threaten a major disruption of hospital operations or whether unresolved conflicts lurk beneath the surface of daily interactions, unaddressed conflict can undermine a hospital’s efforts to ensure safe, high-quality patient care. Developing a Strategic Approach to Conflict Management: How leaders manage organizational conflict has a significant impact on achieving strategic objectives. Aligning conflict management approaches with quality and safety goals is the first step in adopting a strategic approach to conflict management. A strategic approach goes beyond reducing costs of litigation or improving grievance processes—it integrates a collaborative mind-set and individual conflict competency with nonadversarial processes. Undertaking a Conflict Assessment: Conflict assessment should determine how conflicts are handled among the leaders at the hospital, the degree of conflict competence already present among the leaders, where the most significant conflicts occur, and how leaders think a conflict management system might work for them. Conclusions: Strategically aligning a conflict management approach that addresses conflict among leadership groups as a means of protecting the quality and safety of patient care is at the heart of LD.02.04.01. The abstract for Part 2 states the following: Background: A well-designed conflict management process for hospital leaders should both retain the positive benefits of constructive conflict engagement and minimize the adverse consequences that unmanaged conflict can have on patient care. Dispute system design (DSD) experts recommend processes that emphasize the identification of the disputing parties’ interests and that avoid reliance on exertions of power or resort to rights. In an emerging trend in designing conflict management systems, focus is placed on the relational dynamics among those involved in the conflict, in recognition of the reciprocal impact that each participant in a conflict has on the other. The aim is then to restore trust and heal damaged relationships as a component of resolution. Components of the Conflict Management Process: The intent of Standard LD.02.04.01 is to prevent escalation to formal legal disputes and encourage leaders to overcome their conflict-avoidance tendencies through the use of well-designed approaches that support engagement with conflict. The sequence of collaborative options consists of individual coaching and counseling; informal face-to-face meetings; informal, internally facilitated meetings; informal, externally facilitated meetings; formal mediation; and postdispute analysis and feedback. Conclusions: Every hospital has unique needs, and every conflict management process must be tailored to individual circumstances. The recommendations in this two-part article can be adapted and incorporated in other, more comprehensive conflict management processes throughout the hospital. Expanding the conflict competence of leaders to enable them to effectively engage in and model constructive conflict-handling behaviors will further support the strategic goal of providing safe and effective patient care. The Joint Commission Medical Staff Standard MS.01.01.01 addressing conflict will go into effect March 31, 2011. See the Standard here. American Medical News summarizes: The new standard states that the organized medical staff has the primary job of assuring quality and patient safety in the hospital while laying out a mechanism for physicians, the hospital governing body and chief executive to resolve differences over rules, policies and procedures. By spelling out these respective roles and responsibilities, the standard aims to foster collaborative working relationships to improve the quality of care. Medical staffs around the country will have to revise their bylaws in the next year to comply with the standard. Read more here. With regard to the management of conflict, The Joint Commission introduction to the new standard states: If conflict arises within the medical staff regarding medical staff bylaws, rules and regulations, or policies, it implements its process for managing internal conflict (see Element of Performance 10 — see below). If conflicts regarding the medical staff bylaws, rules and regulations, or policies arise between the governing body and the organized medical staff, the organization implements its conflict management processes, as set forth in the Leadership chapter. Element of Performance 10 states: The organized medical staff has a process which is implemented to manage conflict between the medical staff and the medical executive committee on issues including, but not limited to, proposals to adopt a rule, regulation, or policy or an amendment thereto. Nothing in the foregoing is intended to prevent medical staff members from communicating with the governing body on a rule, regulation, or policy adopted by the organized medical staff or the medical executive committee. The governing body determines the method of communication. The Joint Commission recognition of the value of teamwork in the medical setting and the mandate for the development of a conflict resolution process is summarized as follows: This collaborative relationship is critical to providing safe, high quality care in the hospital. While the governing body is ultimately responsible for the quality and safety of care at the hospital, the governing body, medical staff, and administration collaborate to provide safe, quality care. (Please see the Leadership chapter for more discussion of the relationship among the organized medical staff, administration, and governing body.) We welcome your comments on managing conflict in hospitals. Technorati Tags: Mediation Holly Hayes is a mediator at Karl Bayer, […]

The Southern District of Texas has remanded a case removed to federal district court pursuant to 9 U.S.C. § 205 because the requirements for allowing a nonsignatory to compel arbitration with a signatory were not satisfied and no other basis for federal jurisdiction existed. In QPro Inc. v. RTD Quality Servs. United States, No. H-09-3904, (S.D. Tex. January 4, 2011), QPro Inc. (“QPro”), a Texas company that performs nondestructive testing and inspection of coated, insulated pipes, leased technology through a nonexclusive licensing agreement from Applus RTD, a Dutch company, to perform its work. The lease agreement between QPro and Applus RTD contained an arbitration clause which stated, Each party undertakes to make its best effort to settle amicably any dispute with the other party arising out of or relating to this agreement. If such settlement efforts fail, disputes arising in connection with the present agreement shall be finally settled under the then current Rules of Conciliation and Arbitration of the International Chamber of Commerce in The Hague, The Netherlands. The arbitration proceedings shall be held in The Netherlands. The language of the arbitration shall be in English. Additionally, the lease provided “[t]he validity and interpretation of this agreement and the legal relations of the parties to it shall be governed by the laws of The Netherlands.” In 2006, QPro began a three year service agreement with Dow Chemical Company. In 2007, Applus RTD unsuccessfully attempted to acquire QPro. According to QPro, Applus RTD refused to lease QPRO additional equipment and attempted to put the company out of business through its subsidiary RTD Quality Services USA (“RTD”). QPro alleged that RTD induced Dow Chemical to reduce services provided by QPro and eventually rebid its contract with QPro, which resulted in a majority of the work being awarded to another company. QPro sued RTD in a Texas state court for tortious interference of the contract between QPro and Dow Chemical Company. RTD removed the case to federal court “under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 9 U.S.C. §§ 201–08, based on an arbitration agreement between QPro and Applus RTD.” In June 2010, the Southern District of Texas denied QPro’s motion to remand the case, because under 9 U.S.C. § 203, a defendant has the right to remove an action or proceeding that “relates to an arbitration agreement or award falling under the Convention . . . any time before the trial thereof. . . to the district court of the United States for the district and division embracing the place where the action or proceeding is pending.” 9 U.S.C. § 205 (emphasis added). The Southern District of Texas also directed RTD to file a motion to compel arbitration no later than June 18, 2010. After RTD filed its motion to compel, QPro again asked the court to remand the case to Texas state court. The Southern District began its review of QPro’s new motion to remand by stating the issue of arbitrability was for a court to decide, When, as here, the issue is whether a nonsignatory to an arbitration clause may enforce it against a signatory, the courts have viewed that as a matter for the court to decide. See, e.g., Arthur Andersen LLP v. Carlisle, — U.S. —-, 129 S. Ct. 1896, 1902 (2009). … Following the reasoning of the First, Second, and Federal Circuits, an arbitrator in an ICC arbitration would have jurisdiction to decide issues of arbitrability, but only between the parties to the arbitration agreement, here, QPro and Applus. The cases extending this reasoning and allowing a nonsignatory to compel a signatory to arbitrate issues of arbitrability involve a nonsignatory defendant that essentially stood in the shoes of a signatory to the arbitration agreement when defending the suit. In order to determine arbitrability, the court examined “Grigson v. Creative Artists Agency, LLC, in which the Fifth Circuit adopted equitable estoppel as a basis for a nonsignatory to compel a signatory to arbitrate a claim, and its progeny. 210 F.3d 524 (5th Cir. 2000).” According to the court, the Grigson doctrine “recognizes that it would be unfair to allow a plaintiff to rely on a contract when it works to its advantage, and repudiate it when it works to its disadvantage.” The Southern District next determined, [t]he tortious interference claim by QPro against RTD does not rely on the terms of the lease agreement between RTD and Applus. The close relationship between the alleged tortious interference and the underlying contractual obligations necessary to allow the nonsignatory to the contract to enforce the arbitration clause is not present. The court continued its examination by stating, The second basis for compelling arbitration discussed in Grigson is only met if a signatory to the arbitration clause alleges interdependent conduct by both a signatory and a nonsignatory to the arbitration agreement and the nonsignatory defendant seeks to compel the signatory plaintiff to arbitrate all claims. … In the present case, QPro did not sue Applus. QPro did not allege misconduct by Applus. QPro alleged that Applus had a connection with the facts of this case, but that is insufficient. As stated in Grigson, the standard is “substantially concerted and interdependent misconduct . . . .” 210 F.3d at 527. A court can consider what RTD did without considering what Applus did. The second prong of Grigson is not met. Finally, the Southern District addressed QPro’s motion for remand, Under Beiser, this case should now be remanded. QPro’s claim is based on state law and this court has found that the claim is not arbitrable. Absent § 205, no other basis for federal jurisdiction exists. Beiser holds that although removal of state law claims may be initially proper under § 205 as claims that “relate to” an arbitration agreement, once they are determined not to be arbitrable, remand to state court is appropriate. 284 F.3d at 674; see also Certain Underwriters at Lloyd’s v. Warrantech Corp., 4:04-CV-208-A, 2004 U.S. Dist. LEXIS 29953, at *8 (N.D. Tex. Sept. 23, […]