CH 3 – ALTERNATIVE TO DISPUTE RESOLUTIONS

Alternatives to Litigation TRIALS – Cost of litigation – What are the costs, expenses How long to get to a trial What is “Alternative dispute resolution” (ADR) 2

ADR Mediation -3 rd party (mediator) who tries to settle the case. Arbitration – a private judge actually makes a decision. 3

Mediation A Mediator: Process of Mediation Advantages: Costs: 4

Tennessee Mediation  Rule 31 certified  Family – domestic violence  Civil 5

Union CBA Arbitration  Collective bargaining agreement  Different than consumer arbitration  Union and Company “order” choice of arbitrators and then pick 6

Federal Arbitration Act  Section 4: federal court can enforce arbitration clause  What does that mean.  Section 9: arbitrator’s decision confirmed in federal court. 7

Disadvantages: Inconvenient venue. Arbitration clauses often require that hearings be held in a location inconvenient to the claimant. Individuals may have to bear the cost of long-distance travel to have their case heard. For example, the Internet auction site e- Bay requires its customers to travel to its home turf of San Jose, California, to arbitrate any dispute. No public record. While proceedings and records of the courts are open to the public, arbitration clauses and provider organizations require that proceedings be kept confidential. As a result, only the businesses that impose arbitration can track past decisions and know which arbitrators have ruled for them. Limited remedies. Punitive damages, which may be awarded by a judge or jury to “punish” particularly egregious behavior, are also not available in arbitration. 8

High costs: A claimant must pay steep filing fees just to initiate a case—seldom less than $750. These fees do not cover the arbitrator’s hourly charges, which are generally in the range of $200 to $300 per hour, split between the parties. All these fees must be deposited in advance, and almost always amount to thousands of dollars Bias: Arbitration marketing is targeted entirely at businesses, and their panels of arbitrators consist primarily of corporate executives and their lawyers. Since only businesses will be repeat users of an arbitrator, there is a disincentive for an arbitrator to rule in favor of a consumer or employee if he expects further retentions.

APPEAL ??? Only appeal to court to ENFORCE arbitration clause No right to appeal to court unless you prove the arbitrator’s decision is arbitrary and capricious. What does arbitrary and capricious mean Company getting to choosing arbitrator is NOT arbitrary and capricious 10

Disadvantages of Arbitration Opinions – Oral or written? Published? Do not follow set of rules with regard to evidence Who picks arbitrator (different for union cba) Consumer may have to pay arbitrator’s fee up front 11

California, changed its law to require that arbitration results be publicly recorded. 34,000 California cases, consumers lost 94 percent of the time. 12

US Supreme Court Cases US Supreme Court has issued three decisions that enforce mandatory arbitration in employment contracts. 13

In AT&T Mobility v. Concepcion, the Court allowed corporations to ban class actions in their contracts for arbitration. 14

CompuCredit Corp. v. Greenwood CompuCredit marketed a credit card promising "no deposit required" but then consumers fees of almost $300 before they received the card. Wanda Greenwood sued -violated the federal Credit Repair Organizations Act (CROA), which prohibits charging fees in advance for credit repair and requires disclosure of consumer rights. Was Arbitration compelled? 15

Employment Law GILMER v. INTERSTATE/JOHNSON LANE Corp. – Sign mandatory arbitration – cannot file ADEA 16

See Carnival Contract 17

Costa Concordia Passengers of the Costa Concordia have discovered the lengths to which companies have gone to protect themselves from liability. For people who suffered serious injuries and the families of those who died in the cruise disaster, the ticket fine print could cost them the chance to sue for any damages at all. 18

Nursing Homes The Kurth family filed a claim in Racine County Circuit Court, and shortly thereafter Kindred moved to dismiss the lawsuit and force the family into binding mandatory arbitration. 19

Hill v. NHC – TN CASE The administrators of the estate of a woman filed a wrongful death suit against the nursing home. Plaintiff was 60 years old. Sent from hospital to NHC. At admission, she signed a mandatory arbitration clause to be administered by the American Health Lawyers Association (AHLA)” Her treatment plan required further continuous administration of oxygen twenty-four hours a day A NHC nurse disconnected Ms. Hill’s oxygen.

The nursing home - decedent had signed a contract requiring both parties to submit any disputes to arbitration and to waive their rights to jury trial. The trial court found the arbitration clause to be unconscionable and denied the motion. The nursing home then filed an appeal. Currently sits at the TN SCT The proof shows that the likely costs to simply initiate an arbitration under the agreement are very high, perhaps reaching $18,

Mandatory Arbitration Clause-Doctors In Florida, you must now sign a pre-treatment mandatory arbitration agreement Florida is one of the first states where mandatory arbitration provisions were introduced in order to receive medical care. First Professional Insurance Company (FPIC), one of Florida’s largest medical malpractice liability insurers introduced pre-treatment mandatory arbitration agreements to limit medical malpractice liability. 22

Florida Legislature’s findings that arbitration benefited both plaintiffs and defendants by reducing attorney’s fees, litigation costs, and delay FPIC reported to its insureds that, “Binding arbitration affords potential benefits to both physicians and patients. 23

2013 Arbitration Fairness Act The Arbitration Fairness Act invalidates agreements that require the arbitration of employment, consumer, antitrust, or civil rights disputes made before the dispute arises. The Arbitration Fairness Act does not restrict the use of agreements when two parties choose to arbitrate after a dispute arises. 24