By Kent B. Scott and Cody W. Wilson Who Should I Bring to the Mediation? Client representatives. More is not better. The attorney and client should bring one or two employees who know the facts of the dispute. The problem is that often the employees most involved in a dispute have a vested interest in protecting their personal turf. Counsel and the client may have to decide how to handle an employee who was intimately involved in the dispute but has an agenda that doesn’t fit in with the client’s objectives for resolution. For example, this employee may be more interested in shifting responsibility for what happened to someone else. Experts. The attorney and client also need to decide whether an expert will be needed. Experts are usually needed only for highly technical or scientific disputes. They can be involved before or during the mediation or both. An expert can be retained before the mediation to help prepare the client and counsel for the mediation session. In certain technical disputes, the expert can also be retained to participate at the mediation. For example, the expert could deliver part or all of the client’s opening statement at the joint session. In addition, or alternatively, the expert could participate in private caucuses with the mediator in order to explain technical or scientific matters. Sometimes bringing an expert to the mediation can complicate matters by adding another layer of advocacy and taking the focus off finding potential solutions. Counsel should know whether the case requires an expert and the precise role the expert should play. The expert should be clearly advised of the limits of his or her role prior to the mediation. The client, meanwhile, should be aware that retaining an expert will raise the cost of mediation. Decision maker. It is essential to bring the client’s decision maker to the mediation. If there is more than one, they all should attend. If the client is insured, the adjuster must attend and have a supervisor available by phone in case additional settlement authority is needed. If the client is a public entity, a representative of the board or executive committee with valid authority should attend. Without a decision maker present for both sides, the potential for settlement drops dramatically. If the decision maker is not able to attend in person, that creates difficulties, but the case could still settle if the decision maker is available by phone. Take this mediation involving a designbuilder who was terminated from a renovation project by a school district. It made a claim for the value of unpaid work, termination costs and lost profits on the remaining work. The designbuilder and members of the school board attended the mediation. They reached a settlement, but it could not be implemented without the superintendent’s approval. But he did not attend because he was on vacation. He was located and the mediator conducted several caucus sessions via telephone with him and the members of the school board. As a result, the conflict was settled. In every mediation, counsel and the client’s decision maker should be fully prepared for the mediation and know the client’s strategy and objectives for the mediation. Part VIII of this series will discuss the day of the mediation. Stay tuned. [Ed. note: the contents of this post were first published on a different form in the May/July 2008 Edition of the AAA Dispute Resolution Journal.] Kent B. Scott is a shareholder in the law firm of Babcock Scott & Babcock in Salt Lake City whose practice focuses on the prevention and resolution of construction disputes. As a mediator and arbitrator, Mr. Scott currently serves on the AAA’s panel of mediators and the AAA’s Large Complex Construction Case Panel. He also serves on the arbitration and mediation panels for the U.S. District Courts (District of Utah), State District Court (Utah) and Utah Dispute Resolution. Mr. Scott is a founding member of the Dispute Resolution Section of the Utah Bar and a Trustee for the Utah Council on Conflict Resolution. Cody W. Wilson is an associate in the law firm of Babcock Scott & Babcock, concentrating his practice in the area of construction law, is licensed in all courts in the State of Utah, the U.S. District Court of Utah, the 10th Circuit Court of Appeals, the U.S. Court of Federal Claims and is a member of the ABA Forum on the Construction Industry. They can be reached at kent@babcockscott.com and cody@babcockscott.com.

The following bills relating to alternative dispute resolution were introduced by the 111st U.S. Congress. The session will last from January 3, 2009 until January 3, 2011. Click on the bill number to read its text and on the status link to find the bill’s most recent legislative action. Stay tuned to Disputing for more legislative updates! Bills that passed: “An Act Making Appropriations for the Department of Defense for the Fiscal Year Ending September 30, 2010, and for Other Purposes” contains an amendment (the “Franken Amendment“) that bans funds to defense contractors who require workers (employees and independent contractors) to arbitrate “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. 3326 ; Amendment; Senator Franken’s video is here) H.R. 3326 was signed by President Barack Obama and became law (Pub. L. 111-118) on December 19, 2009. Link to the final version is here and major actions are here. Also, find guest-posts by F. Peter Phillips here and here. Implementation. On May 19, 2010 the Department of Defense issued an interim rule implementing the Franken Amendment with request for comments. Comments should be submitted before July 19, 2010. Find out more here. The Consolidated Appropriations Act of 2010 (H.R. 3288) a spending bill signed into law by President Obama on December 16, 2009, (P. L. 111-117) includes a provision under which owners of automobile dealerships can use a binding arbitration process administered by the American Arbitration Association (AAA) to seek reinstatement if their businesses were closed by automobile manufacturers during the implementation of the Emergency Economic Stabilization Act of 2008. Read our posts here and here. Find out more details at the AAA website. Bills still pending: The Restoring American Financial Stability Act of 2010 (a.k.a. the “Dodd-Frank Wall Street Reform and Consumer Protection Act”) would give the SEC the power to ban or limit mandatory arbitration in certain agreements. House Versions: H.R. 4173 and Status; Senate Versions: S.3217 and Status. The June 29 Conference Report is here. The Arbitration Fairness Act of 2009 would ban mandatory pre-dispute arbitration in employment, consumer, and franchise contracts. Senate version: S. 931 and Status. House version: H.R. 1020 and Status. The Employee Free Choice Act of 2009 would amend the National Labor Relations Act to require first mediation and then binding arbitration if both parties are unable to reach an agreement within a certain time frame. Senate version: S. 560 and Status. House version: H.R. 1409 and Status. The Payday Loan Reform Act of 2009 would amend the Truth in Lending Act to establish additional payday loan requirements to protect consumers. This bill prohibits a mandatory arbitration clause that is “oppressive, unfair, unconscionable, or substantially in derogation of the rights of consumers.” H.R. 1214 and Status. The Fairness in Nursing Home Arbitration Act of 2009 would render pre-dispute arbitration clauses in nursing home contracts unenforceable. S. 512 and Status. House version: H.R. 1237 and Status. The Mortgage Reform and Anti-Predatory Lending Act of 2009 would amend the Truth in Lending Act of 1968. The bill provides that “[n]o residential mortgage loan and no extension of credit under an open end consumer credit plan secured by the principal dwelling of the consumer, other than a reverse mortgage may include terms which require arbitration of any other nonjudicial procedure as the method for resolving any controversy.” H.R. 1728 and Status. The Labor Relations First Contract Negotiations Act of 2009 would amend the National Labor Relations Act to require the arbitration of initial contract negotiation disputes. H.R. 243 and Status. The Consumer Fairness Act of 2009 would treat arbitration clauses which are unilaterally imposed on consumers as an unfair and deceptive trade practice and prohibit their use in consumer transactions. H.R. 991 and Status. The Preserving Homes and Communities Act of 2009 would require certain mortgagees to make loan modifications, establish a grant program for state and local government mediation programs, and create databases on foreclosures. S. 1731 and Status. The Conflict Resolution and Mediation Act of 2009 would provide assistance to local educational agencies for the prevention and reduction of conflict and violence. H.R. 4000 and Status. The Agricultural Credit Act of 2009 would reauthorize state agricultural mediation programs under title V of the Agricultural Credit Act of 1987. H.R. 3509 and Status; S.1375 and Status. The Department of Peace Act of 2009 would establish a Department of Peace that would take a proactive, strategic approach in the development of policies that promote national and international conflict prevention, nonviolent intervention, mediation, peaceful resolution of conflict, and structured mediation of conflict. H.R.808 and Status. The Rape Victims Act of 2009 provides that employment-related arbitration agreements shall not be enforceable with respect to any claim related to a tort arising out of rape. S. 2915 and Status. The Foreclosure Mandatory Mediation Act of 2009 would require lenders of loans with Federal guarantees or Federal insurance to consent to mandatory mediation. S. 2912 and Status. The Foreclosure Mandatory Mediation Act of 2010 would require the mortgagee of certain one- to four-family residences, as a prerequisite to a foreclosure proceeding to conduct a one-time mediation with the affected mortgagor and a housing counseling agency. H.R. 4635 and Status. The Ending Defensive Medicine and Encouraging Innovative Reforms Act of 2009 provides for reforms of health care lawsuits by, among other things, requiring a court-appointed expert to review a heath care lawsuit for merits. H.R. 4039 and Status. Technorati Tags: arbitration, ADR, law

Mark your calendars! The Center for Public Policy Dispute Resolution at the University of Texas School of Law presents its 2nd Annual Summer Skills Enrichment Institute. when: July 28-30, 2010 what: Innovations in Collaboration and Conflict Resolution where: Four Seasons Hotel, Austin, TX Find out more here.

In Blaustein v. Huete, No. 09-31078 (5th Cir. June 18, 2010), Burt Huete (“Huete”) along with Richard and Gail Blaustein, formed Special Projects Limited, L.L.C. (“SPL”) in connection with an application for a provisional patent for a wireless tracking device they had invented. SPL hired the law firm Maier & Maier (“Maier”) to serve as patent counsel. Their written fee agreement contained an arbitration clause and listed SPL as the client, with Huete and Blaustein serving as signatories for SPL. Soon after, Huete hired separate counsel and sued the Blausteins in state court, and the Blausteins sued Huete in federal court. Huete alleged that the Blausteins and Maier conspired to let the provisional patent lapse and failed to list him as an inventor on a subsequent patent application. The suits were consolidated in federal court and added Maier as a defendant. Maier moved to dismiss Huete’s claims and the district court found that Huete was a party to the fee agreement between Maier and SPL. Therefore, the court granted Maier’s motion to compel arbitration pursuant to the agreement’s arbitration clause. Huete appealed. The Fifth Circuit, after an “examination for the ‘four corners of the agreement’ ” reasoned that Huete is not a signatory to the arbitration clause. The court began its analysis by saying that “there is a presumption favoring liberal construction of arbitral clauses.” However, the court noted that the agreement stated: “[t]he Client and Maier & Maier PLLC jointly agree that any dispute, controversy, or claim between us arising out of or relating in any way to this engagement shall be resolved through binding arbitration . . . .” The court concluded that Huete signed the agreement as “the Client,” representing SPL and this was not enough to bind him individually. In reversing the district court dismissal, the Fifth Circuit did not foreclose the “possibility that Huete [could] be held to the arbitration agreement as a non-party beneficiary.” Technorati Tags: ADR, law, arbitration