professor john lande university of missouri school of law university of st. thomas school of law...

Why and How Corporations Use PEDR

Professor John LandeUniversity of Missouri School of Law

University of St. Thomas School of LawDispute System Design:

Justice, Accountability and Impact November 13, 2015

Collaborative Research ProjectWorking with Peter Benner, Connecticut

attorney and mediatorCollaboration grows out of “conversation” on

Indisputably

Builds on My Book

ABA Section of Dispute Resolution PEDR User Guide

QuestionsSince most corporations don’t seem to use

planned early dispute resolution (PEDR) systems, why do some corporations use them?

Who initiated the systems?How do they work?

Preliminary AnalysisSnowball sample of inside counsel in

companies using PEDRWe conducted 12 interviews and plan to do

about 15-20 in totalObviously, this isn’t a representative sampleBut it does provide valuable insights to

answer our questions and develop recommendations

What is PEDR, Anyway?General approach for strategically handling matters early, which includes some or all of the following:Regular and strategic use of ADR clausesEarly case assessment and periodic reviewInside counsel designated as “ADR counsel”Training of inside counsel and/or business people Written materials about PEDRAlternative fee arrangements for outside counselSystematic use of mediation or other ADR processesCulture change

Why PEDR?Usually, individual inside counsel believe in it

and just do it, evolving process over timeSome use an intentional DSD process

Business leaders support or acquiesceBusiness motivations are to:

Save time and money, orAchieve other business goals, orDo both

Business MotivationsResolve disputes without litigationFair outcomesImprove results Avoid repeating bad results in court or arbitrationBetter manage litigationMaintain business relationshipsMaintain good reputationBe consistent with corporate philosophy, eg,

creating value, innovation, cooperation, or efficiency

So Why Not PEDR?

Subjects speculated why companies and lawyers don’t use PEDR:Resistance to changeAdversarial mindsetFeels risky – eg, invite lawsuits, create perception of

weakness, internal criticism, could harm careerLack of data to demonstrate benefits

Survival of PEDRAs long as PEDR is not the norm for business DR, the

survival of PEDR programs in particular businesses generally will depend on the commitment of the general counsel (or other key figures) at any given time

If PEDR becomes more routine and is institutionalized in particular businesses, it will be harder to uproot existing PEDR programs

Consumer Disputes, Class Actions and Calls for Transparency: Arbitration and the Dispute System Design ChallengeNANCY A. WELSH

WILLIAM TRICKETT FACULTY SCHOLAR & PROFESSOR OF LAW

PENN STATE UNIVERSITY, DICKINSON LAW

Reasons for Interest•Protection of our good processes•Self-determination as a guiding principle•Erosion of DR field’s commitment to self-determination•Erosion of lawyers’ commitment to our courts•Yearning for DR field and lawyers—perhaps through the ABA

Dispute Resolution Section—to be able to lead for social good

Dispute System Design in Consumer Industries

• Goals• Reduce expenses generally, including litigation-related expenses• Protect corporate brand• Learn about problems before they become public• Dispute System Design Solutions?• Introduce—and require—that consumers provide notice of problems• Introduce—and require—that consumers use arbitration• Bar consumers’ use of litigation generally• Bar class proceedings• Reduce or eliminate opportunity for discovery• Shift own attorney’s fees to losing consumer• Require confidentiality

Consumer Disputes, Arbitration, Class Actions—A Timeline

1997—American Arbitration Association’s “National Consumer Disputes Advisory Committee” produces Consumer Due Process Protocol

1998—First USA adopts first credit card arbitration clause (per Ross et al. v. American Express et al.)

1999—“Arbitration Coalition” (i.e., group of credit card-issuing banks, law firms, PR firm, with some NAF involvement) holds first meeting

2000—Citi decides to adopt class action-barring arbitration clause (implemented in 2001)

2000—ABA Dispute Resolution Section’s “Task Force on Consumer Arbitration” begins meeting

2001—“Consumer Companies’ Class Action Working Group” (offshoot of Arbitration Coalition) begins meeting

Consumer Disputes, Arbitration, Class Actions—A Timeline (and the End of First Phase of DSD?)

2001—“In-House Counsel Working Group” (offshoot of Arbitration Coalition) begins meeting

2001—ABA Dispute Resolution Section’s Task Force determines that it cannot produce either a resolution or due process protocols

2003—Arbitration Coalition holds last meeting

2003—Discover adopts first opt-out provision (providing 2 months for opt-out)

2003—Class action-barring arbitration clauses have been adopted by all defendant banks in Ross et al. v. American Express et al. (approximately 87% of all general-purpose credit card transactions are subject to both arbitration and class action bar)

Framework of Dispute System Design•Goals•Stakeholders•Context and culture•Processes and structure•Resources•Success•Accountability

Consumer Disputes, Arbitration, Class Actions—A Timeline (and Beginning of Second Phase?)

2008—ABA Governmental Affairs Office informs Dispute Resolution Section leadership that Section cannot—based on RUAA, UMA and Model Standards--take position endorsing S. 1135 to amend the FAA to establish minimum due process protections, allow opt-out in favor of small claims court, and provide federal district court appeal rights for all parties

2009—ABA Dispute Resolution Section Council adopts resolution supporting mandatory pre-dispute arbitration clauses that include meaningful opt-outs, and then withdraws the resolution

2010--Dodd-Frank Wall Street Reform and Consumer Protection Act passes, giving Consumer Financial Protection Bureau authority to issue regulations that would “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 doing so is “in the public interest and for the protection of consumers.” Act also requires a study and regulatory findings to be consistent with the Study

2010—Dispute Resolution Section Consumer Arbitration Study Group meets

2010—American Arbitration Association’s “National Task Force on the Arbitration of Consumer Debt Collection Disputes” produces Consumer Debt Collection Due Process Protocol Statement of Principles

Consumer Disputes, Arbitration, Class Actions—A Timeline

2011—Supreme Court decides AT&T Mobility v. Concepcion (involving multi-step clause with potential for payment of premium and attorney’s fees)

2012—Supreme Court decides CompuCredit v. Greenwood

2012—National Roundtable on Consumer Arbitration meets

2013—Supreme Court decides American Express v. Italian Colors

2013—CFPB releases Preliminary Results of study

2015—CFPB releases Study

2015—CFPB announces preliminary regulatory proposals

2015—New York Times publishes series on mandatory pre-dispute arbitration

2015—ABA Section of Dispute Resolution establishes Task Force to determine response to proposals

National Roundtable on Consumer Arbitration: Selected Questions• What is the prevalence of arbitration clauses, industry by industry? What do we know about how

arbitration works in each industry?• How many consumers initiate arbitration? How many initiate action under a clause like AT&T’s?• How do consumers fare in individual lawsuits? Individual arbitrations? Class actions?• Do class actions deter bad behavior and encourage responsible internal conflict management—or is such

action motivated by crisis (i.e., bad publicity, damage to the brand, threat of governmental activity)?• What are the “take rates” in consumer class actions? How do the amount of attorney’s fees compare to

benefits received by class members?• If consumers knew the impact of mandatory arbitration clauses on their options, would they oppose or

support them?• What is the impact of arbitration provisions on prices for consumer goods and services?• Do businesses collect data on consumer complaints/claims to make changes in operation, billing, etc.?

At what point do they make these changes? • What data could CFPB require to be reported to alert it to existence of bad actors or systemic problems?

National Roundtable on Consumer Arbitration• Areas of Common Ground• Interest in working together to make it easier for consumers to identify, raise and present claims that

consumers currently find difficult to identify and pursue on their own.• Interest in trying to find reasonable ways to assure that class actions are used only when necessary,

consumers with valid claims get access to needed information and legal representation, and companies provide consumers with real redress

• Selected Ideas• Industry-specific minimum and best practices for dispute resolution• Accessible mechanisms to correct for inappropriate arbitral behavior or exercise of discretion• Easy, accessible online dispute resolution process that informs consumers of rights, and with trigger

that results in 1) referral of systemic problems to regulatory authority or 2) form of redress approximating collective or class actions

• Publication of arbitration awards• Third party standing for consumer organizations

Consumer Financial Protection Bureau Selected Findings•“Tens of millions of consumers use consumer financial products that are subject to arbitration agreements”

•Share of contracts that include arbitration agreements• 53% of credit card market (but for Ross settlement, 94%)• 44% of insured deposits in the checking account market• 92% for a sample of prepaid card agreements• 99% for a sample of storefront payday loan agreements (CA, TX)• 99% of the mobile wireless market

Consumer Financial Protection Bureau Selected Findings•Share of providers of financial services (credit cards)• 75% of largest bank issuers in credit card market• 42% of smaller and mid-sized bank issuers

•Share of providers of financial services (checking accounts)• 46% of largest banks• 7% of small and mid-sized banks

•Share of providers of financial services (payday loans)• 100% of large lenders• 84% of sample of smaller lenders

Consumer Financial Protection Bureau Selected Findings•Few consumer-initiated cases against financial service providers in either arbitration or in court• 1,847 arbitration disputes filed with AAA, largest administrator of agreements, in 2010-2012• 870 consumers filed credit card claims in small claims court in 2012 (for jurisdictions with combined total

population of around 85 million)

•Potential benefit to consumers from class action settlements• At least 32 million class members eligible for relief pursuant to class settlements between 2008 and

2012• Settlements totaled $540 million per year in cash, in-kind relief, and attorney’s fees and expenses

(roughly 18%)• Changes in behavior not quantified

•Arbitration agreements more likely to be used to stop cases filed on behalf of class than in cases filed on individual basis

•Arbitration agreements did not lead to lower prices for consumers, at least in the credit card market

Consumer Financial Protection Bureau Tentative Proposals • Bar class action waivers in mandatory pre-dispute arbitration clauses• “[R]equire any arbitration agreement included in a contract for a consumer financial product or service

offered by an entity subject to the proposals to provide explicitly that the arbitration agreement is inapplicable to cases filed in court on behalf of a class unless and until class certification Is denied or the class claims are dismissed.”

• Require reporting of arbitral filings and written awards to the Bureau• “[R]equire covered entitites that use arbitration agreement sin their contracts with consumers to

submit initial claim filings and written awards in concumser finance arbitration proceedings to the Bureau. . .”

• Make information regarding filings and awards available to the public• “The Bureau is also considering whether to publish the claims or awards to its website, making them

available to the public.”

A Dispute Systems Design Approach to Integrating

Advance Care Planning Within a Community

Dispute System Design: Justice, Accountability and Impact University of St. Thomas School of Law, November 13, 2015

Jacqueline N. Font-Guzmán, M.H.A., J.D., Ph.D. Professor of Law and Interim Director [email protected]

© JACQUELINE N. FONT-GUZMÁN 28

Goals for the article

Where it all started

Where it is headed


Goals

Explore the use of DSD beyond the purview of problem solving.

Use DSD principles as a framework to integrate ACP in a community and reduce healthcare disparities and related conflicts.


Some definitions

Dispute System Design

Advance Care Planning (Patient Self-Determination Act of 1990)

Living Will Durable Power of Attorney

Health Disparities


Examples of healthcare disparities

African Americans and Hispanic Americans are less willing than other groups to complete advance directives (Dying in America, 2015, p. 70, citing Caralis et al., 1993).

Hospice use is low in Latinos and there is a need to learn how this decision-making process takes place (Dying in America, p. 250, 2015).

There is disparity along racial lines in responses to end of life care when considering extraordinary means (Prices et al. 2006, citing Wojtasiewicz 2006).

Latinos have limited access to quality and culturally appropriate healthcare (UNMC Health profile report 2013, p. 2 citing, Aguirre-Molina, M., Molina, C.W., & Zambrana, R.E. (2001).


Why is disparity in ACP a problem?

Patients without written advance care goals tend to receive unwanted, futile, painful, and expensive care

Negative impacts include placing an excessive emotional and physical burden on patients, caregivers, and family members


Where it started?2014 Haddix Grant: Starting the Conversation…

Profs. Helen Chapple, Center for Health Policy and Ethics &Jacqueline N. Font-Guzmán, The Werner Institute

What constitutes a good death in NE?

Literature Review:Advance Care Planning

& Dying Experience

Comparison of parameters and

demographics around dying in NE and

surrounding states

Facilitated conversations through

WCDs on how dying occurs in NE &

participation in Older Nebraskans Day at NE

State Fair


Preliminary studiesThree World Café Dialogues in English

One World Café Dialogue in Spanish in South Omaha

Data analysis is ongoing

Preliminary findings


2010 20500%

10%20%30%40%50%60%70%80%90%

100%

67%46%

33%54%

Majority Minorities

Minorities, now

roughly one-third of

the U.S. population,

are expected to become the majority in 2042, with the nation projected to be 54 percent

minority in 2050.

US Census Bureau, 2010

Current minorities will become majority by 2050

Why minorities?


Community

Indiv/FamilyDiagnose

Prevent

HealEmotions

Reconcile Interests

Worldviews

Determine Rights

Test Power

Stay with conflict

Assess


• Ury 1995, 11(4) Negotiation Journal• Byock et.al 2001, 22(3) Journal of Pain and Symptom Management

Integrating the tension

between community

& autonomy

Asking disputants to revisit how a decision reflects their values, their goals, their hopes and their fears.

Giving disputants permission to stay in conflict

Breaking seemingly big decisions into small steps.

Helping people develop a rich vision of what big changes would look like.

Naming the challenge.

Conflict interveners work with disputants to move them through conflict & retain their sense of autonomy by assisting them in

1) staying in touch with sense of self; and

2) coming to terms to how they are changing Mayer (2015) The Conflict Paradox, pp. 248-254


Thanks for listening!


Questions, Comments, Feedback?

DISPUTE SYSTEM DESIGN FOR SAFE SPORT

Maureen WestonPepperdine University School of LawNov. 13, 2015

ADDRESSING MISCONDUCT IN SPORT

An athlete reports inappropriate behavior by the coach.

What would you do?

LIFELONG BENEFITS OF SPORTS

COACH/ATHLETE CONNECTION

BUT WHEN THAT GOES AWRY

Former boxer Sugar Ray Leonard wrote of being sexually molested by a coach.

Gymnastics Coach Accused of Raping Teenage Student,

THE PROBLEM: ABUSE IN SPORT

One in four girls, One in six boys

will be sexually abused by age 18

More so in Sport than society at large

ISSUE AT ALL LEVELS OF SPORT (AND SOCIETY)

Professional International/Olympic College Club Youth

DEFICIENCIES IN CURRENT APPROACH Report to League/Club/Team/NGB Fear in Reporting Power and Influence of Coach/Athlete

Support Team Consequences to Athlete: leave sport,

lasting trauma Trauma & Silence Conflict of Interest/Expertise

TIME TO CHANGE THE ODDS

With 44 million kids under the age of 18 participating in sport

“Preventing Sexual Abuse Among Athletes is the agency’s

most important role” USOC President

TACKLING ABUSE IN SPORT THROUGH DISPUTE SYSTEMS DESIGN AND FAIR PROCESS

THE OBJECTIVE:

Designing a system to educate, prevent, facilitate and fairly adjudicate issues concerning abuse in sport.

METHODOLOGY: U.S. OLYMPIC COMMITTEE

Diversity of Working Group Expertise and Knowledge: Legal Psychiatrists & Medical Professionals Specialists in Compliance, Reporting Insurance Athletes & Coaches Law Enforcement

STAKEHOLDER INPUT PROCESS

NGBs, coaches, athletes, parents, security experts, training providers, and grassroots organizations Individual Discussions Panels Written Best Practices & Policies Surveys Relevant Research

DEFINING ABUSE? 1- Sexual 2- Emotional 3 – Physical 4- Bullying 5- Harassment, and 6- Hazing. 7 - “GROOMING” 8 - Strict Coach/Discipline

What types of misconduct are reportable offenses? Grounds for sanction?

IS THIS OKAY? CREEPY OR CRIMINAL?

“Sometimes my coach or another adult sends me weird texts. He or she asks me whether I’m having sex or other things about sex. Is this normal?”

My coach gives me gifts that I like a ton and takes me to games where it's just the two of us. He told me not to tell anyone about the gifts . Is this normal?

SIX AREAS OF FOCUS

CENTER FOR SAFE SPORT (2016)

Independent: Funded by USOC & NGBs

USADA Model: outsource Exclusive jurisdiction over alleged sexual abuse cases; NGBs give up these types of cases

Model for Other Sport Programs?

CENTER FOR SAFE SPORT

Education, Training, Online Toolkit, Model Policies

Background Checks Reporting Systems: Confidential,

Hotline Practices & Policies Center Investigation Center Adjudication and Internal

Hearing

QUESTIONS: SAFE SPORT INVESTIGATION How? By whom? Notice to Accused Treatment of Reporting Contact with criminal authorities? Discovery- opportunity in evidence

exchange? Protocols & Development of an

International Code of Safe Sport

Adjudication: Due Process Considerations

Center Investigates & Enforces Standard of Proof Process Sanctions U.S. Amateur Sports Act – Right to AAA

Hearing Role of and Working with Criminal

Authorities Concerns of Civil Liability Dealing with Other Forms of Abuse?

USING PROCESS DESIGN FOR SAFE SPORT

Your Thoughts?

AREAS FOR FURTHER ACTION

Addressing bullying and emotional abuse as an important topic for promoting safe training environments

Providing a centralized hotline as an educational and support resource for victims or other parties that require information related to sexual and physical abuse

Providing further guidance and resources for NGBs in navigating the adjudication process, including the potential to provide centralized investigative services for NGBs

Establishing a coaches’ code of conduct that prohibits sexual and physical misconduct

Developing a system for a club certification

OLYMPIC COACH ACCUSED OF SEXUALLY ABUSING TEEN GYMNASTS

There is a special relationship between a coach and an athlete, particularly in an individual event sport like gymnastics, swimming, tennis. The coach is very important to the success of the athlete, and there are no other places to find that support, or at least that's what the athlete believes, usually because the coach has taught the athlete that message: 'Without me, you wouldn't be able to do this.'

http://jezebel.com/5843873/olympic-coach-accused-of-sexually-abusing-teen-gymnasts

DISCUSSION ON VARIOUS MODELS

The direct delivery of all policies, practices, programs and services by individual NGBs, clubs and other grass roots organizations, with limited to no involvement by the USOC.

The USOC, with direct input from NGBs, centralizes the

delivery of core resources, such as best practice training / education and suggested policies, practices and services.

The development of a USADA-type model that outsources

all centralized services, including resources, programs, services and enforcement to an external provider.

Hybrids of the above models.

(a) USOC to establish and maintain bylaws for swift and equitable resolution for disputes involving any of its members and relating to the opportunity of an amateur athlete, coach trainer, manager, administrator, or official to participate in the Olympic Games … a court shall not grant injunctive relief against the USOC within 21 days before such games…(b) Ombudsman – provide independent advice to athletes at no cost about [rules] relating to opportunity to participate in Games, world championships or other protected competition

AMATEUR SPORTS ACT§ 220502 RESOLUTION OF DISPUTES.

This Complaint Form must be used when filing a Section 9 complaint with the USOC involving an alleged denial of an opportunity to compete

I. The Claimant II. The Respondent III. The Competition IV. The Dispute: factual and legal basis V. The Remedy VI. Affected Party

USOC BYLAWS SECTION 9 COMPLAINTS

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