The United States Court of Appeals for the Fifth Circuit held that nonsignatories to arbitration agreements may be compelled to arbitrate under the New York Convention. In Todd v. Steamship Mutual Underwriting Association (Bermuda) Limited, No. 09-30177 (5th Cir. March 18, 2010) Anthony Todd was injured in Louisiana while working as a chef aboard the steamship American Queen, owned and operated by the Delta Queen Steamboat Company (“Delta Queen”). Steamship Mutual Underwriting Association (Bermuda) Limited (“Steamship”) insured Delta Queen against liability for injuries to its employees. Todd won a lawsuit against Delta Queen but was unable to collect because Delta Queen had filed for bankruptcy. Since a Louisiana statue allows to file a direct suit against insurers, Todd was allowed to sue Steamship. Steamship, however, removed to federal court and then moved to compel arbitration under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (The “New York Convention”). Steamship argued that Todd was bound by an arbitration clause requiring Delta Queen to arbitrate with Steamship. The district court refused to compel arbitration citing Zimmerman v. International Companies & Consulting Inc., 107 F.3d 344 (5th Cir. 1997). In Zimmerman, the court found that a plaintiff was not a party to the arbitration agreement and thus it had no binding effect upon him. The Fifth Circuit first began by distinguishing the facts of Zimmerman from the present case. Next, the court noted that the U.S. Supreme Court’s decision in Arthur Andersen LLP v. Carlisle, 129 S. Ct. 1896 (2009) had overruled Zimmerman. In Carlisle, the Court held that nonsignatories to arbitration agreements may be compelled to arbitrate if the relevant state contract law allows the nonparty to enforce the agreement. Accordingly, the Fifth Circuit reversed and remanded the case with instructions for the district court to determine whether Todd, as a nonsignatory, could be compelled to arbitrate. Technorati Tags: ADR, law, arbitration

Last March The Joint Commission announced its long awaited, revised medical staff standard (MS) 01.01.01, which will replace MS 1.20. The new MS 01.01.01 becomes effective March 31, 2011, to allow facilities and medical staffs to prepare for implementation. The intent of the MS 01.01.01 is, inter alia, to establish a conflict management process in the event of a conflict between/among the medical staff, medical executive committee, and the governing body of a facility. The goal is to enhance patient safety and the quality of care by creating a positive working relationship between a facility and its medical staff. The language of the new standard is the result of much debate and compromise. Perhaps reflective of that development process, the standard states in Element of Performance (EP) 10 that there must be a conflict management system to address disputes that arise between the medical staff and the medical executive committee. The inclusion of conflict management in the medical staff standard reaffirms The Joint Commission’s commitment to conflict management first set forth in the leadership standard (LD) 01.03.01, and more particularly stated in its EP 7. The leadership standard became effective January 1, 2009. In December, 2008, the American Health Lawyers Association (AHLA) ADR Task Force published its Conflict Management Toolkit, to assist accredited facilities in addressing their need to develop conflict management systems in order to comply with The Joint Commission leadership standard. As part of its commitment to public service, the AHLA provides a complimentary download of the Toolkit available here. While many of the Toolkit’s foundational principles and its conflict management guidance apply equally well to the development of a medical staff conflict management system for disputes between the medical staff and the executive medical staff committee, the medical staff should be wary of using a “cookie cutter” approach by accepting the transfer in total of a facility conflict management system based on LD 01.03.01, EP 7 to a medical staff conflict management system based on MS 01.01.01, EP 10. Among other distinctions, a discerning medical staff member (or facility manager) would note that MS ER 10 addresses disputes among members of a unique entity, the medical staff, and its leadership. The medical staff may not be recognized as a distinct legal organization, may not have a separate business structure, and may not have sole control of its funds. Because of this looser structure, accommodations in processes in the broader facility conflict management system are necessary to account for individual physician’s concerns. The medical staff conflict management system will likely need to address heightened concerns of medical staff members regarding the credentialing process, economic impacts of changing practice patterns, electronic records connectivity confidentiality issues, reporting obligations, and liability exposure as affected by or arising from medical staff policies and actions. Such concerns of individual medical staff members must be anticipated and accommodated in setting up a medical staff conflict management system. Another important distinction in process is that the Toolkit recommends a baseline or initial assessment of the facility’s existing conflict management efforts. While such an undertaking is helpful for the facility so it can avoid duplication of efforts and build from an existing foundation, applying the same assessment tool to medical staff relations could create an unintended impression that the facility is cementing in the status quo and/or hijacking the development of a new conflict management system that should be unique to the medical staff and its leadership. An attempt to apply such existing internal facility functions would appear to the medical staff as the “other side” taking over. In the interest of maintaining every appearance of fairness and neutrality, the facility and the medical staff should agree to use outside or independent neutrals or conflict management specialists in conflict management the development and applications of a medical staff conflict management system consistent with the intent of MS 01.01.01. The Joint Commission’s new MS 01.01.01 has the potential to provide medical staffs and facilities a systemic approach to working through conflicts of interest that could well arise as the Patient Protection and Affordable Care Act (PPACA) is implemented. Facilities and medical staffs are already assessing the impact of PPACA and jockeying for favorable positions. The sooner complementary facility and medical staff conflict management systems are established, the more likely facilities and medical staffs can collaboratively position themselves to function effectively and successfully during healthcare reform implementation.

By Holly Hayes The American Health Lawyers Association (AHLA) Alternative Dispute Resolution (ADR) Service has posted a complimentary Conflict Management Toolkit to facilitate early management of disputes in health care organizations. The toolkit includes The Joint Commission (TJC) standards on conflict management and the sentinel event alert on disruptive physicians as well as sample guidelines, checklists and policy. (the toolkit is available here) For more on The Joint Commission standards related to conflict and disruptive behavior, see our posts here, here, and here. We welcome your comments on conflict resolution in health care. 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 Kent B. Scott and Cody W. Wilson This series of posts will pose questions that clients have about mediation. We have found that mediation is most successful when attorneys and clients work through these questions together and map out a plan to achieve their objective—an agreed settlement rather than a resolution imposed by a judge, jury or arbitrator. The questions clients have about mediation are tools that can be used to design a successful mediation. The mediator’s understanding of these questions can provide a framework in which to conduct productive mediations. What Is Mediation? How Does It Work? Clients who have not previously participated in mediation will have no idea what mediation is or how it differs from arbitration or litigation. Thus, “What is mediation?” is likely to be the client’s first question. Mediation is one of several alternatives to litigation. It is the most informal of the alternatives (a more formal alternative is arbitration) and the only one that gives the parties control over the outcome. Mediation is sometimes called a facilitated negotiation. The facilitator is the mediator, who must be neutral and have no interest in the dispute. The mediator is there to help the parties persuade each other that it is in their best interests to settle. The mediator does this by helping the parties find common ground and a basis for settlement. The mediator usually meets at least once with the parties together and then conducts private meetings with each side. This encourages each party to speak candidly with the mediator about its interests and needs that must be met in order for a settlement to occur. Many mediators give “homework” for one side to do while they are in private caucus with the other side. The parties to mediation have an obligation to participate in good faith. But they have no obligation to reach a settlement. That decision is completely voluntary. Am I Required to Mediate? The client may have sought out legal counsel without knowing whether it has an obligation to mediate. In a commercial dispute, the answer will usually be in the transaction documents. For example, mediation is now a requirement of some standard form construction documents. If the transaction documents are silent as to mediation, the parties can agree to mediate after a dispute arises. This is true even if they have a contract requiring arbitration or litigation. However, one party cannot force the other to mediate. A client may not ask specifically about court-annexed mediation, but this is relevant to the question of whether the client might be required to mediate. Courts in many jurisdictions require parties to mediate before allowing them to proceed to trial. In our jurisdiction, an increasing number of judges require attorneys to include a statement in their planning reports or scheduling orders that set out their plans for pre-trial mediation. So if the court would require mediation before trial, the client should consider whether it might be better off in private mediation where the parties can select the mediator of their choice and the rules under which they will mediate. Part II will discuss the advantages and disadvantages of 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.