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ADR Resources: News/Reports

ADR News and Reports, a selection of ADR news and reports of interest to Tennessee attorneys, mediators and arbitrators by Marnie Huff

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See also TN ADR Caselaw Update.
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ABA adopts policy on pre-dispute arbitration clauses in nursing home admission contracts.  At its 2009 Mid-Year Meeting the American Bar Association adopted Resolution 111B.  It is now the ABA's official policy to support "the enactment of federal, state, and territorial legislation and regulations that oppose the use of mandatory, binding, pre-dispute arbitration agreements between a long-term care facility and a resident of such facility or person acting on behalf of such resident. 

ABA has residential foreclosure mediation resources for ADR professionals.  The ABA Dispute Resolution Section's Mediation Committee's resource page provides information on foreclosure mediation legislation and programs across the United States.

Reporting Requirements for Rule 31 Mediators.  The Tennessee ADR Commission adopted the following policy:  "Effective January 1, 2008 all mediators listed pursuant to Supreme Court Rule 31 will be required to submit reports as prescribed by the Commission, regarding any mediation beginning on or after January 1, 2008 except as to matters pending in state courts outside of Tennessee and the Federal Court System.  Mediators will have 15 calendar days from the date of the last mediation session to submit the report to the AOC.  This policy does not affect any other reporting obligation required of a Rule 31 listed mediator."  It is noteworthy that this requirement for Rule 31 mediators applies to both court ordered mediations and non-court ordered mediations (sometimes referred to as "private mediations"). 

The link for submitting reports is www.tncourts.gov/Rule31Report (password required).

ADR Commission Policies.  Rule 31 mediators need to know commission policies, as well as the provisions of Tennessee Supreme Court Rule 31.  For example, one policy relates to reciprocity:

"If an applicant can satisfactorily demonstrate: (1) that she or he is an approved or certified mediator in good standing with her or his state's equivalent of the Alternative Dispute Resolution Commission of The Tennessee Supreme Court; and (2) that said approval or certification state commission shall permit approval by reciprocity by an applicant from Tennessee with criteria consistent with that established by the Alternative Dispute Resolution Commission of The Tennessee Supreme Court, the Alternative Dispute Resolution Commission of The Tennessee Supreme Court may grant approval of the applicant for the general civil, family law and domestic violence designations."

A compilation of all current ADRC policies is available on the AOC web site. 

Appellate mediation rule in TN.  Tennessee Rule of Appellate Procedure on Appellate Mediation went into effect on July 1, 2009.  See additional information on the Margaret Huff Mediation website at ADR Resources: Appellate Mediation. 

AAA amends Rules.  The American Arbitration Association changed its Construction Industry Arbitration Rules and Mediation Procedures (effective October 31, 2009) its Employment Arbitration Rules and Mediation Procedures (effective November 1, 2009) and Fee Schedule (effective January 1, 2010).

ABA Ethics 20/20 Commission.  The next meetings of the Ethics 20/20 Commission are Feb. 11-12, 2010 in Atlanta.  The Commission will address a number of issues relating to new technologies and global practice, including international arbitration.

Dodd-Frank Wall Street Reform and Consumer Protection Act Impacts ADR. Several sections of the Act, Public Law No. 111-203, are relevant to ADR professionals.  Two key provisions relate to mandatory predispute arbitration agreements.  Sections 921 and 1028 give federal government agencies the authority to restrict mandatory pre-dispute arbitration.

First, Section 921, part of TITLE IX (INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE REGULATION OF SECURITIES) Subtitle B (Increasing Regulatory Enforcement and Remedies), of the Act provides:

SEC. 921. AUTHORITY TO RESTRICT MANDATORY PRE-DISPUTE 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 this title, is further amended by
adding at the end the following new subsection:

`(o) Authority to Restrict Mandatory Pre-dispute Arbitration- The Commission, by
rule, may prohibit, or 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 future dispute between them arising under the Federal securities laws,
the rules and regulations thereunder, or the rules of a self-regulatory organization if
it finds that such prohibition, imposition of conditions, or limitations are 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
new subsection:

`(f) Authority to Restrict Mandatory Pre-dispute Arbitration- The Commission, by rule,
may prohibit, or impose conditions or limitations on the use of, agreements that
require customers or clients of any investment adviser to arbitrate any future dispute
between them arising under the Federal securities laws, the rules and regulations
thereunder, or the rules of a self-regulatory organization if it finds that such
prohibition, imposition of conditions, or limitations are in the public interest and for
the protection of investors.'.

Second, under TITLE X (BUREAU OF CONSUMER FINANCIAL PROTECTION), Section 1028 provides:

SEC. 1028. AUTHORITY TO RESTRICT MANDATORY PRE-DISPUTE ARBITRATION.

(a) Study and Report- The Bureau shall conduct a study of, and shall provide a report
to Congress concerning, the use of agreements providing for arbitration of any future
dispute between covered persons and consumers in connection with the offering or
providing of consumer financial products or services.

(b) Further Authority- The Bureau, by regulation, may prohibit or impose conditions
or limitations on the use of an agreement between a covered person and a consumer
for a consumer financial product or service providing for arbitration of any future
dispute between the parties, if the Bureau finds that such a prohibition or imposition
of conditions or limitations is in the public interest and for the protection of
consumers. The findings in such rule shall be consistent with the study conducted
under subsection (a).

(c) Limitation- The authority described in subsection (b) may not be construed to
prohibit or restrict a consumer from entering into a voluntary arbitration agreement
with a covered person after a dispute has arisen.

(d) Effective Date- Notwithstanding any other provision of law, any regulation
prescribed by the Bureau under subsection (b) shall apply, consistent with the terms
of the regulation, to any agreement between a consumer and a covered person
entered into after the end of the 180-day period beginning on the effective date of the
regulation, as established by the Bureau.

Additional provisions related to arbitration includes in Section 748 and 919B:

SEC. 748. COMMODITY WHISTLEBLOWER INCENTIVES AND PROTECTION.

The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by adding at the end the
following:

`SEC. 23. COMMODITY WHISTLEBLOWER INCENTIVES AND PROTECTION.

`(n) Nonenforceability of Certain Provisions Waiving Rights and Remedies or
Requiring Arbitration of Disputes-

`(1) WAIVER OF RIGHTS AND REMEDIES- The rights and remedies provided for in
this section may not be waived by any agreement, policy form, or condition of
employment including by a predispute arbitration agreement.

`(2) PREDISPUTE ARBITRATION AGREEMENTS- No predispute arbitration agreement
shall be valid or enforceable, if the agreement requires arbitration of a dispute arising
under this section.'.

. . .

SEC. 919B. STUDY ON IMPROVED INVESTOR ACCESS TO INFORMATION ON
INVESTMENT ADVISERS AND BROKER-DEALERS.

(a) Study-

(1) IN GENERAL- Not later than 6 months after the date of enactment of this Act, the
Commission shall complete a study, including recommendations, of ways to improve
the access of investors to registration information (including disciplinary actions,
regulatory, judicial, and arbitration proceedings, and other information) about
registered and previously registered investment advisers, associated persons of
investment advisers, brokers and dealers and their associated persons on the
existing Central Registration Depository and Investment Adviser Registration
Depository systems, as well as identify additional information that should be made
publicly available.

Finally, the Act requires the board of trade to establish rules and provide facilities for alternative dispute resolution for market participants and intermediaries:

SEC. 735. DESIGNATED CONTRACT MARKETS.

. . .

(b) Core Principles for Contract Markets- Section 5 of the Commodity Exchange Act (7
U.S.C. 7) is amended by striking subsection (d) and inserting the following:

`(d) Core Principles for Contract Markets- . . .(14) DISPUTE RESOLUTION- The board of
trade shall establish and enforce rules regarding, and provide facilities for
alternative dispute resolution as appropriate for, market participants and any market
intermediaries.

A copy of the Act is available on the Library of Congress website.

Amended Tennessee Attorney Ethics Rules Affecting ADR.  The Tennessee Supreme Court has ordered comprehensive amendments to the Rules of Professional Conduct.  The amendments went into effect on January 1, 2011.  Attorneys who are arbitrators, mediators and advocates in alternative dispute resolution proceedings will be interested in the rules of professional conduct that refer to ADR.  As noted in a comment to Rule 2.2, the rule on lawyers as intermediaries, Rule of Professional Conduct 2.2 "does not apply to a lawyer acting as a dispute resolution neutral, such as an arbitrator or a mediator" because the parties in  a dispute resolution proceeding are not clients of the lawyer, even if the lawyer was appointed with the concurrence of the parties. Other rules of conduct govern a lawyer’s service as a dispute resolution neutral. See RPC 2.4; Tenn Sup. Ct. R. 31."

Ethics Advisory Opinions.  On July 27, 2010, the Tennessee ADR Commission issues two ethics advisory opinions, one on mediators accepting gifts from clients, the other a confidentiality question on whether a mediator may report an assault committed during a mediation.

Workers Comp Appellate Mediation.  On March 2, 2011, the Tennessee Supreme Court repealed its Rule 37 governing mediation in workers compensation appellate cases.  It determined that mandatory mediation of these cases at the appellate level was no longer necessary because mediation is now mandatory at an earlier stage of all Workers Comp cases under Tennessee state law.  The Court's order does not affect Tennessee Rule of Appellate Procedure 34 regarding voluntary appellate mediation,

TN Rule 31 Amendments. On March 10, 2011, the Tennessee Supreme Court amended Rule 31 governing court-ordered mediators.  The following changes go into effect on April 1, 2011:
  • Add the following language to Section 2(n):  “In the context of mediations, a ‘Rule 31 ADR Proceeding’ is any mediation of an Eligible Civil Action conducted by a Rule 31 Mediator.”  The term Eligible Civil Action is already defined in Rule 31(f) as follows:  "‘Eligible Civil Action’ includes all civil actions except forfeitures of seized property, civil commitments, adoption proceedings, habeas corpus and extraordinary writs, or juvenile delinquency cases. The term ‘Extraordinary writs’ does not encompass claims or applications for injunctive relief.”
  • Reword Section 3(a) by changing “will” to “may”:  “(a) Rule 31 ADR Proceedings may be initiated by the entry of an Order of Reference." 
  • Add the following as subsection (c) of Section 5:  “(c) For an Eligible Civil Action mediated by a Rule 31 Mediator, a final report shall be filed in the manner described within this Section.”

ABA Commission Issues Draft Proposals.  On May 2011, the American Bar Association Ethics 20/20 Commission issued initial draft proposals on the following legal ethics topics related to globalization and technology:
The Commission previously issued several papers on legal ethics issues:
  • Issues Paper Concerning Lawyers’ Involvement in Alternative Litigation Financing
  • Issues Paper Concerning the ABA Model Rule on Admission by Motion
  • Issues Paper Concerning Client Confidentiality and Lawyers’ Use of Technology
  • Issues Paper Concerning Lawyers’ Use of Internet Based Client Development Tools
  • Discussion Draft Regarding Domestic and International Outsourcing
  • Memoranda and Templates for Comment- Inbound Foreign Lawyer Issues

ADR CLE programs at ABA Annual Meeting in August. The Section of Dispute Resolution is sponsoring eleven ADR CLE programs at the ABA Annual Meeting in Toronto, Canada August  2011.  ABA Annual Meeting registration information is at http://www2.americanbar.org/annual/pages/default.aspx.
 
Code of Ethics for Arbitrators in Commercial Disputes.  The ABA Section of Dispute resolution has released the American Bar Association/College of Commercial Arbitrators Annotations to the Code of Ethics for Arbitrators in Commercial Disputes (June 2011).  The Annotation cites judicial decisions and other documents that cite the 1977 or 2004 versions of the Code from 1981 through July, 2010.

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