By Holly Hayes American Medical News posted a review of some of the tort alternatives being considered as part of health reform that were discussed at the Physician Insurers Association of America in May: experts gave insurers a glimpse into four possible alternatives to be tested under the health reform law: health courts, early offers, apology programs and medical review panels. They detailed how the options could alleviate pressures within the current liability system by reducing claims and costs, and by improving efficiency and fairness for physicians and patients. The Patient Safety and Liability Demonstration program discussed here on Disputing, was enacted in March and designates “$50 million in incentive payments to encourage states to test alternatives to damage caps and other more traditional tort reform. The provisions expanded on a separate $25 million patient safety and liability demonstration program approved by the Obama administration in 2009. The deadline for those grants, overseen by the Dept. of Health and Human Services, was in January. Awards have yet to be announced.” Douglas B. Wojcieszak, founder of Sorry Works! Coalition argues, the problem with the current liability system is more than just a legal issue. The problem is a relationship issue where litigation can stem from communication barriers between patients and doctors that can arise after an adverse event. Mr. Wojcieszak says discussing these incidents with “patients and empathizing with them — which does not mean admitting liability — changes the conversation from anger to what’s fair … and you only change the discussion when you inject honesty and accountability. It won’t stop every lawsuit. But we know it stops a lot of lawsuits.” For more on the patient/physician relationship and communication, see our post here. 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.

We would like to welcome the Franklin Solutions Blog to the ADR blogosphere. The blog is hosted by Jeanne F. Franklin, a certified mediator and lawyer from Virginia. The Franklin Solutions Blog has a focus on health care mediation and conflict resolution. Check out their June 1 post here. We look forward to reading more of your posts, Jeanne. The Disputing Team, Karl Bayer, Alyson Chaky, Holly Hayes & Victoria VanBuren

The Court of Appeals of New York [the highest court in the State of New York] held that an employee challenging the enforceability of a fee-splitting provision in a pre-dispute arbitration agreement is entitled to a factual hearing to establish that her inability to pay arbitration costs precluded her from vindicating her statutory rights. In Brady v. Williams Capital Group, L.P., 2010 N.Y. LEXIS 49 (N.Y., Mar. 25, 2010) Lorraine Brady was employed as of January 1999 by Williams Capital Group (Williams), an investment bank and securities broker-dealer. In 2000, Williams issued a manual for all of its employees requiring arbitration of all disputes and equal sharing of the fees and costs of arbitration. The agreement included the following provision: The Company and I agree that, except as provided in this Agreement, any arbitration shall be in accordance with the then-current Model Employment Arbitration Procedures of the [AAA] before an arbitrator who is licensed to practice law in the state in which the arbitration is convened (‘the Arbitrator’). The arbitration shall take place in or near the city in which I am or was last employed by the Company. In February 2005, Williams terminated Brady’s employment. By then, Brady had earned $100,000 in 1999, $137,500 in 2000, $324,000 in 2001, $356,000 in 2002, $405,000 in 2003 and $204,691 in 2004. Brady filed a discrimination complaint with the New York State Division of Human Rights (DHR). After 8 months of discovery, however, Brady withdrew her complaint. Shortly thereafter, Brady filed for arbitration by the AAA seeking damages against Williams for discrimination termination. After the parties engaged in extensive pre-hearing discovery, the AAA sent Williams a bill for $42,300 which represented the entire advance payment for the arbitrator’s fees pursuant to the AAA’s “employer pays” rule. Williams refused to pay and demanded that Brady pay her portion, citing their arbitration agreement. Similarly, Brady refused to pay her portion, and the AAA canceled the arbitration in October, 2006. Brady sued relying on the AAA’s rule that requires an employer to pay the arbitrator’s fee. The New York Supreme Court [a trial court] held that the parties’ Arbitration Agreement, requiring Brady to pay half ($21,150) governed. Brady appealed. The issue before the New York Court of Appeals was whether Brady met her burden of demonstrating that an arbitration agreement’s provision for the equal sharing of arbitration fees and costs precluded her from pursuing her statutory rights in the arbitral forum. The court noted that despite Brady’s earning history ranging from $100,000 to $400,000 annually during her employment with Williams, Brady had established that her finances were “precarious” as a result of her lack of gainful employment during the 18-month period following her employment termination. The court held that: the issue of a litigant’s financial ability is to be resolved on a case-by-case basis and that the inquiry should at minimum consider the following questions: (1) whether the litigant can pay the arbitration fees and costs; (2) what is the expected cost differential between arbitration and litigation in court; and (3) whether the cost differential is so substantial as to deter the bringing of claims in the arbitral forum. Accordingly, the court remanded the case for a hearing to determine whether Brady was financially able to share equally in the arbitration fees and costs. Technorati Tags: ADR, law, arbitration

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: [UPDATE 06/12:] The Restoring American Financial Stability Act of 2010 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 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