By Holly Hayes The Agency for Healthcare Research and Quality (AHRQ) announced that seven demonstration grants for the Medical Liability Reform and Patient Safety initiative have been funded for a total amount of $19.7 million. Thirteen planning grants have also been funded for a total amount of $3.5 million. The grants support the implementation and evaluation of evidence-based patient safety and medical liability projects. The seven demonstration grants include models that meet one or more of the medical liability reform and patient safety initiative goals, including: “Reducing preventable harms. Informing injured patients promptly, and making efforts to provide prompt compensation. Promoting early disclosures and settlement, through a court-directed alternative dispute resolution model.” Examples of some of the demonstration grants include: Timothy McDonald, M.D., J.D., University of Illinois at Chicago, IL, $2,998,083 The project is designed to fill the evidence gap regarding the impact on patient safety and litigation rates of programs that feature improved communication with patients, transparency, disclosure of adverse events, early offers of compensation, and learning from mistakes. It will evaluate the impact on Medical Liability Reform and Patient Safety outcomes of extending an existing disclosure program from an academic hospital setting to diverse hospitals in the greater Chicago area. Stanley Davis, M.D., Fairview Health Services, Minneapolis, MN, $2,982,690 The objective of this project is to improve perinatal (the period prior to and just after birth) patient safety and demonstrate the relationship between improved patient safety and a reduction in the number of malpractice claims. The project will implement and evaluate the use of perinatal best practices in 16 hospitals to assess the impact on patient safety and the level of malpractice activity. This initiative builds on the institution’s prior efforts as part of a nationwide collaborative to eliminate preventable perinatal harm. Eric Thomas, M.D., M.P.H., University of Texas Health Science Center, Houston, TX, $1,796,575 The project will review the use of a disclosure and compensation model, which informs injured patients and families promptly and makes efforts to provide prompt compensation. It will identify best practices for using disclosure to improve patient safety, and disseminate best practices to serve patients’ needs and improve safety for subsequent patients. The project will investigate disclosure and compensation in the UT system over a three-year period, identify best practices for using disclosure to improve patient safety, and disseminate best practices with a focus on incorporating patient and family input into efforts to understand why errors occur. Thomas Gallagher, M.D., University of Washington, Seattle, WA, $2,972,209 The project creates a statewide initiative involving communication training for health care workers and a collaboration between hospitals and a malpractice insurer to improve adverse event analysis, disclosure, and compensation. The goal is to enhance the culture of health care communication in order to improve patient safety and decrease medical malpractice liability. Alice Bonner, M.S., APRN, BC, Massachusetts State Department of Public Health, Boston, MA, $2,912,566 The project proposes to engage clinicians, patients, malpractice insurers, and the State public health agency to ensure more timely resolution of medical errors that occur in outpatient practices and improve communication in all aspects of care. The project will identify key areas contributing to ambulatory medical errors and malpractice suits in order to redesign systems and care processes to prevent, minimize, and mitigate such errors in a group of Massachusetts primary care practices. The project will also transform communication culture, processes, and outcomes in these practices so that they are more patient and family-centered, particularly with respect to proactively seeking out, handling, and learning from patients’ safety experiences, concerns, and complaints. The full list of demonstration grants is available here and the planning grants are here. Let us hear your comments regarding these demonstration and planning grants. 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 W. Reed Leverton In August, 2009 attendees of the annual Texas Judicial Conference were surveyed regarding their attitudes as to alternative dispute resolution processes, with a particular emphasis on mediation and arbitration. The survey was prepared by members of the Alternative Dispute Resolution Section Council and undertaken under the Council’s direction. 1,547 state judges (trial and appellate) were invited to this year’s conference, 566 of whom attended. Each of the judges who came to the conference was asked to complete the survey, which was comprised of 12 questions, several with multiple sub-parts (see example below). The questions ranged from asking for basic information such as length of service on the bench and subject matter jurisdiction to multi-part Likert Scale questions eliciting the judges’ opinions as to the effectiveness and other qualitative aspects of ADR processes. The judges were also asked as to their opinions regarding subjects such as appropriate training, experience and roles for mediators and arbitrators. The respondents included trial court and appellate judges, with an average of 12 years on the bench. 89 of the 566 judges returned completed surveys, which represents 15.7% of conference attendees and 5.8% of all state judges eligible to attend the conference. What follows is a brief summary of the findings. While further analysis will be necessary to develop more specific conclusions, it can be generally said that Texas judges are well aware of the various non-judicial processes available to litigants (especially mediation and arbitration), and further, that there is general acceptance within the Texas judiciary of the use of ADR modalities. Mediation The respondents reported that mediation is often used in their respective counties and were of the opinion that it’s an effective way to manage their dockets. The judges were somewhat in agreement with the proposition that all civil and family law cases should be referred to mediation, and there was strong disagreement with the statement that mediation usurps the role of the judiciary. A few of the judges reported some agreement with the idea that mediation can threaten the rule of law in that participants can reach outcomes not otherwise available in court. Generally, however, the majority of the respondents did not feel that mediation threatens rule of law. With respect to court-referred mediations, 25% were done so by virtue of a local rule and 42% were by court rule. A significant number of judges also considered referrals on a case-by-case basis (50%) or on motion of the parties (53%). Only 7% of the judges reported that they do not refer their cases to mediation. 3% of the judges reported that they never grant an objection to a mediation referral order, 43% do so on a showing of extraordinarily good cause, 50% on a showing of good cause and 3% on motion of either party without a showing of good cause. The respondents generally disagreed with the following statement: mediation is a success only if an agreement is reached during the mediation itself. There was moderate agreement with the idea that mediators should provide participants with the mediator’s opinions of possible trial outcomes, while only slight agreement as to mediators opining as to probable outcomes. There was also moderate agreement with the proposition that participants derived more satisfaction with mediated settlements (as opposed to going to court) since they had more control over the outcome of their dispute. 90% of the judges thought that mediators should be required to have the same amount of training currently required to receive court-referred cases, while 5% responded that more training should be required. 3% thought that there should be no training requirements as a prerequisite to receiving court-referred mediations. Additionally, and with respect to court referred mediations only, 12.5% of the judges thought that membership in the Texas Mediator Credentialing Association should be required and 16% reported that some specialized training should be required based upon the facts of the case. Finally, and significantly, 32% of the judges felt that mediators handling court annexed cases should also be licensed Texas attorneys. Arbitration The respondents reported that the use of arbitration in their counties ranked between used and, sometimes and rarely used, and while some judges felt that arbitration was an effective docket management tool, it did not score nearly as well in that category as did mediation or settlement conferences. There was slight agreement that arbitrators are more predictable than juries as well as with the proposition that, generally, arbitrations cost less than jury trials. There was also some agreement with the statements that arbitration threatens the rule of law in that sometimes arbitrators can make awards not available in the courts and that arbitration usurps the role of the judiciary. All of the respondents were of the opinion that arbitrators should have some formal training and/or other qualifications. 55% opined that arbitrators should be licensed Texas attorneys, 60%thought that arbitrators should have formal training and 47% responded that they should have specialized training or background in the subject matter of the dispute to be arbitrated. The following are examples of the survey’s Likert Scale questions along with average response values: Please evaluate the following statements: 1 = strongly disagree; 2 = disagree; 3 = no opinion / neutral; 4 = agree; 5 = strongly agree A. Court-ordered mediation is an effective means to manage my docket. (Average response: 4.31) B. Absent a showing of good cause to the contrary, all civil cases (non-family) should be referred to mediation. (Average response: 3.72) C. Absent a showing of good cause to the contrary, all family cases should be referred to mediation. (Average response: 3.75) D. Mediation usurps the role of the judiciary. (Average response: > 1.13) E. Mediation threatens the rule of law in that parties can reach settlement agreements that contain outcomes not available if their disputes are submitted to judges or juries for final disposition. (Average response: 1.73) F. When appropriate, mediators should tell the parties what the possible outcomes are on specific issues, verdict amounts, or even the entire case […]

By Kent B. Scott and Cody W. Wilson Will a Settlement in Mediation Be Enforceable? The answer is “yes” if the settlement is memorialized in a written settlement document that is signed by all parties and their counsel. The settlement agreement is not confidential and can be enforced in court just like any other contract. However, if called upon to enforce a mediation settlement, the court will look only at the face of the document because, as we have previously said, mediation documents and conversations with the mediator remain confidential (excepting documents and information exchanged by the parties). Do Some Mediations Fail to Settle? If So, Why? Not all disputes settle in mediation, but the failure rate is low. The reasons why particular disputes do not settle vary. It could be that one or more of the ingredients for a successful mediation listed above may be missing. Or it could be that a party added new demands late in the game. Sometimes, one side is emotionally stuck and cannot see how both parties’ interests and needs can be fulfilled by a settlement. Or one side may have a policy reason why it does not want to settle even if it would be in its economic interest to do so. It is also possible that one party never intended to settle when it agreed to mediate. In addition, a mediation might not end the dispute because the mediator may not have been the right person to get the job done. A mediation could also fail as the result of being scheduled too early. This often happens when the parties’ contract requires mediation prior to the commencement of arbitration or a lawsuit. Often at that point, there is insufficient information known about the dispute to make a realistic assessment of the parties’ positions. A mediator who realizes that mediation is premature may suggest that the mediation be recessed until more information about the dispute is gathered and exchanged. Take this example. The owners of a subdivision brought claims against the developer, the water district and certain contractors for damages resulting from the rupture of a water main. The owners claimed, among other things, that the re-sale value of their property was diminished as a result of the flooding. At the mediation the subdivision owners were not able to provide any appraisals or other data that would support or quantify their diminished value theory. Consequently, the mediation was recessed until a later date. The owners were required to provide the defending parties with an appraisal report that validated the extent of their diminished value claim. Many mediations that do not settle in mediation do so soon thereafter, based, in part, on the work accomplished in the mediation. Those that don’t would have benefitted from the mediation effort if the reduced the number of issues or facts in dispute or can now better plan their need for discovery, motions or other matters preparatory to trial or arbitration. What Would Happen if My Mediation Fails? After an unsuccessful mediation, the client has several options. It can agree with the adversary to take a break from the dispute or resume negotiations at a later date. Or it can agree with the adversary to resume mediation a short time later. Alternatively, the client could decide to arbitrate or litigate. If the failed mediation is court-connected, the next step would probably be litigation. If that route is taken, the lawsuit would probably settle before trial, as happens in most cases. Part V of this series will discuss things to do prior to mediating. 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.

In addition to the bills discussed in our recent post, the U.S. Congress is considering a major financial reform legislation. The Restoring American Financial Stability Act of 2010. As it relates to ADR, this legislation 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 most recent version of H.R. 4173 states, SEC. 921. AUTHORITY TO ISSUE RULES RELATED TO MANDATORY PREDISPUTE ARBITRATION. (a) AMENDMENT TO SECURITIES EXCHANGE ACT OF 1934.—Section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o), as amended by section 918, is amended by adding at the end the following: ‘‘(l) AUTHORITY TO RESTRICT MANDATORY PREDISPUTE ARBITRATION.—The Commission may conduct a rulemaking to reaffirm or prohibit, or impose or not impose conditions or limitations on the use of, agreements that require customers or clients of any broker, dealer, or municipal securities dealer to arbitrate any dispute between them and such broker, dealer, or municipal securities dealer that arises under the securities laws or the rules of a self regulatory organization, if the Commission finds that such reaffirmation, prohibition, imposition of conditions or limitations, or other action is in the public interest and for the protection of investors.’’ (b) AMENDMENT TO INVESTMENT ADVISERS ACT OF 1940.—Section 205 of the Investment Advisers Act of 1940 (15 U.S.C. 80b–5) is amended by adding at the end the following: ‘‘(f) AUTHORITY TO ISSUE RULES RELATED TO MANDATORY PREDISPUTE ARBITRATION.—The Commission may conduct rulemaking to reaffirm or prohibit, or impose or not impose conditions or limitations on the use of, agreements that require customers or clients of any investment adviser to arbitrate any dispute between them and such investment adviser that arises under the securities laws, as defined in section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c), or the rules of a self-regulatory organization, if the Commission finds that such reaffirmation, prohibition, imposition of conditions or limitations, or other action is in the public interest and for the protection of investors.’’. H.R. 4173 already passed the House and the Senate (in lieu of S. 3217). On June 9, 2010, the bill moved into a House-Senate conference committee to reconcile differences. Stay tuned to Disputing for more legislative updates. Technorati Tags: arbitration, ADR, law