FORUM Blog

Contract risk management is essential for protecting organizations during the contracting stage and throughout the lifecycle of an agreement.

AJZ’s Hauling purchased a Kenworth truck and an associated TruNorth warranty. After AJZ’s experienced several issues with the truck and submitted five repair claims under the warranty, the claims were denied and AJZ’s itself paid to repair the truck.

Welcome to the beginning of a groundbreaking shift in how businesses approach disputes. Business conflicts have long been seen as inevitable challenges that are addressed reactively, and most often in court litigation. This traditional paradigm, centered on resolution, will soon be overtaken by a more proactive and economically-rational approach: prevention.

Pennsylvania family law attorney and mediator Lynelle A. Gleason lays out three fundamental misconceptions about family law mediation in a recent commentary piece.

Bradley Arant Boult Cummings Partner and experienced mediator David K. Taylor has continued is occasional series listing and explaining the “Top 10 Horrible, Terrible, No Good Mistakes Lawyers Make in Mediations.” Number 3 on Taylor’s list is the mistake of not identifying key issues in advance.

Experienced mediator Andrew Nadolna describes in the New York Law Journal various specific challenges to reaching settlement and their implications for structuring a potentially productive mediation.

Mediator Rick Weiler argues that impasse in mediation “most often flows from a combination of cognitive biases and flawed risk assessments.” To break an impasse the mediator’s aim should be to break parties out of this disordered thinking and to move the parties from over-optimistic, unconscious and automatic thinking about the dispute and into more active, reflective, and conscious analysis that can encourage problem solving.

Former Wisconsin Circuit Court Judge, former United States Attorney, and current active mediator Patrick Fiedler has published a brief article in the Wisconsin Law Journal outlining the major elements that he suggests should be included in a pre-mediation submission document.

Ingram, Yuzek, Gainen, Carroll & Bertolotti partner Jennifer B. Zourigui published an insightful short piece in the New York Law Journal. She advises, among other items, that attorneys adjust their advocacy approach to focus on mediation objectives and prepare specifically for the mediation. Here are her five tips in a nutshell.

A party who sends only outside litigation counsel to court-ordered mediation and who does not send a party representative can be ordered to pay the opposing party’s attorneys’ fees and costs related to the unsuccessful mediation, according to the U.S. District Court for the District of Kansas.

A beneficiary of a trust that contains dispute resolution provisions requiring mediation or arbitration is required to submit trust-related disputes to ADR on equitable estoppel grounds, regardless of the fact that the beneficiary never agreed to abide by the trust’s dispute resolution provisions, according to the Arkansas Court of Appeals.

In a memorandum opinion, the Ninth Circuit Court of Appeals held that an arbitration award is subject to vacatur where an arbitration panel “arbitrarily” denies at attorneys reasonable request for a three-day postponement for an undisputed medical emergency.

An arbitration award issued by an arbitrator who does not disclose an ownership stake in the arbitration company administering the arbitration is subject to vacatur under the evident partiality standard where one party to the arbitration is a repeat player who has appeared numerous times in arbitration's administered by the company, according to the Eighth Circuit Court of Appeals.

A legal representation fee agreement arbitration clause is not enforceable against the client who signed the agreement where the law firm neither counter-signs the agreement, nor provides any other evidence that it intended to be bound by the agreement’s terms, according to the Dallas, Texas Court of Appeals.

A party who fails to secure the attendance of a person with settlement authority at a court-ordered mediation, and who fails to listen to the opposing party’s presentation at the mediation, is subject to sanction under Federal Rule of Civil Procedure 16(f), according to the U.S. District Court for the District of Arizona.

A non-party to a contract containing an arbitration agreement is not obligated to arbitrate disputes with a party to the contract where the dispute involves only commercial tort claims that do not relate to the terms of the contract, according to the Mississippi Supreme Court.

A party who wrongfully refuses to pay mediation fees related to pending litigation in a timely matter may be subject to paying interest on the unpaid amounts as well as the mediation provider’s attorney’s fees related to the effort to collect the unpaid mediation fees.

A state law that requires an arbitration clause to include a “specific authorization” from a person before the arbitration clause can be enforced against that person is preempted by the Federal Arbitration Act’s command that arbitration agreements are “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.”

An antitrust claim related to product pricing falls within the very broad scope of an arbitration agreement covering any disputes “arising out of or relating to” the distribution contract containing product pricing provisions, according to the Third Circuit Court of Appeals.

A party who initiates an arbitration proceeding under an arbitration agreement that the party knows includes an unenforceable provision, waives the right to challenge the enforceability of the arbitration agreement in court by virtue of the fact that the party initiated the arbitration.

The California Supreme Court has held an arbitration agreement binding an employee with an unpaid wage claim unconscionable and unenforceable where the agreement was presented after three years of employment for very brief review, in small print and complex legal language, and to an employee with limited English proficiency, where the agreement also invoked and arbitration procedure that would be less accessible and affordable to the employee than the administrative hearing available under state law.

In a recent decision, the NLRB panel in Cordúa Restaurants, Inc., 368 NLRB No. 43 (2019) held that employers can introduce arbitration agreements to employees even in reaction to the fact that employees are in the process of opting into a current FLSA or state wage law collective action lawsuit. The panel also held that employers can notify employees that refusal to sign the updated arbitration agreement will result in termination of employment.

The Second Circuit Court of Appeals held that the arbitration provision in a franchise application submitted to a franchisor becomes an enforceable agreement to arbitrate once the franchisor actually evaluates and reviews the application, even where the language of the application does not include a promise that the application will be reviewed.

Procedural simplicity and flexibility are hallmarks of arbitration compared to court litigation. When it comes to service of an arbitration demand in a FORUM arbitration, there are several different methods that comply with FORUM’S Codes of Procedure.

The First Circuit Court of Appeals held that a general choice of law provision in an arbitration agreement invoking the law of a state does not also operate to insert that state’s arbitration law in place of the Federal Arbitration Act as the procedural body of law governing the arbitration.

The Ninth Circuit Court of Appeals held that a party who litigates a key legal issue on the merits in court thereby waives the party’s right to later seek to compel arbitration of the dispute where the litigation activity prejudices the opposing party by forcing that party to incur the costs of litigating the potentially arbitrable issue or claim.

The Eight Circuit Court of Appeals held that an employee who clicks a button to acknowledge that the employee has reviewed an employee policy document that includes an arbitration clause has not accepted an offer to arbitrate and that no valid agreement to arbitrate is formed as a result of the acknowledgement.

Pennsylvania joined 20 other states and Washington, D.C. implementing the Revised Uniform Arbitration Act (RUAA), replacing Pennsylvania’s adoption of the Uniform Arbitration Act, which took place in 1980.

The California Supreme Court held that a party who makes a settlement offer that is rejected by an opponent who later obtains a lesser result in arbitration can request and receive an award of attorney’s fees and costs if such a request is made to the arbitrator within 15 days after the final award is issued.

In a case where the parties elected the specific rules under which an arbitration would be conducted but did not explicitly select an arbitration administrator, the trial court refused to order the parties to arbitrate with the specific administrator that had drafted the rules, and the Eighth Circuit decided that it lacked subject matter jurisdiction over an appeal of that decision.

Robert E. Bartkus recently summarized several arbitration holdings that relate to arbitration agreement drafting and execution on the ABA Section of Litigation’s ADR Committee Practice Points blog.

The Eastern District of Missouri held that the same arbitrator should be reappointed and the resisting party compelled to arbitrate in a complex employment case where a partial award and four supplemental awards had been issued and an audit process instituted, but no final award yet issued.

The Missouri Supreme Court held that where an arbitration agreement requires that challenges to its validity be decided by the arbitrator instead of a court, this “delegation” provision can be challenged by the party seeking to reject arbitration but that challenge must be specifically targeted at the enforceability of the delegation provision itself and not at the arbitration agreement or the contract containing the arbitration agreement.

The Fifth Circuit Court of Appeals held that where an arbitration agreement requires that an accountant arbitrator issue a “reasoned award,” the award was a valid reasoned award where it stated that it was based on the parties’ statements and accounting records, pointed to specific findings, and explained which evidence the arbitrator found relevant in determining the award amount.

The Fifth Circuit Court of Appeals held that a party seeking to vacate an arbitration award cannot do so on the basis of an alleged violation of the governing arbitration rules relating to the qualifications of one of the arbitrators sitting on the panel if that party has not raised the rules violation issue in the arbitral proceeding itself.

The Second Circuit Court of Appeals held that the online purchaser of a protection plan to cover an electronic device was absolved of the general duty to read the terms of the contract, which included an arbitration clause, where the hyperlink to the terms was inconspicuously embedded in a complex and cluttered email and the import of the hyperlink was not called out to the purchaser.

The Third Circuit Court of Appeals held that a non-signatory employer can compel arbitration under an arbitration agreement signed only by the employee and the staffing firm retained by the employer under “alternative equitable estoppel” principals where there is a close nexus between the non-signatory and the contract or where the signatory must rely on the contract to assert claims against the non-signatory.

A 5-4 majority of the United States Supreme Court held that class-wide arbitration is fundamentally different than individual arbitration such that parties to an arbitration agreement that is merely ambiguous as to whether class-wide arbitration is permitted cannot be compelled to participate in class arbitration.

In many jurisdictions, court litigation can be a long, long slog. Speed-to-resolution is an often-cited advantage of arbitration, but what can parties do to ensure that this speed advantage is fully realized in a future dispute that could arise?

The Northern District of Illinois held that a party does not waive the right to arbitrate claims related to a contract by virtue of the fact that the party had previously litigated “sufficiently distinct” claims against the same party under a different contract that did not include an arbitration provision.

The Ninth Circuit Court of Appeals ruled that an arbitration award that ignores the incorporation by reference of applicable federal regulations in aid of a less sophisticated party is irrational and should be vacated under the arbitrator “exceeded their power” standard of the Federal Arbitration Act.