The practice of law is changing. Clients now demand quicker, less expensive, and more effective legal services[i]. In fact, clients do not want legal services anymore. They want solutions.

This is especially true in family law and divorce matters. Fewer and fewer clients adopt the divorce is war mentality that characterized traditional divorce and family law processes. Fewer and fewer clients are willing to tolerate the emotional, financial, and legal destruction that comes with adversarial divorces. Clients want to protect their children, preserve their financial future, and begin the next stage of their lives free of the trauma of an ugly divorce. Interdisciplinary Collaborative Divorce (ICD) is designed to meet those needs.

However, most dispute resolution professionals either have not heard of ICD or lack sufficient familiarity with the process[ii]. This paper presents an overview of ICD, seeks to explain the method, and describes the professionals involved in making it a highly effective dispute resolution process[iii].

Origins of Collaborative Divorce

Collaborative Divorce was invented by Minneapolis-based attorney Stu Webb in 1990[iv]. Webb experienced litigation as an inefficient and unnecessarily adversarial process that harmed clients financially and emotionally[v]. His goal was to work with another attorney to address the needs and interests of both parties while attempting to settle the legal issues outside of court[vi]. This approach is fundamentally different than the adversarial approach of our legal system. If the parties failed to reach a resolution in the collaborative process, then Webb and his colleague withdrew from the case and referred the couple to litigation attorneys[vii].

Stu Webb spread his message, one attorney at a time, eventually catching the attention of a group of attorneys in California, who saw an opportunity to shift the paradigm of family law. Several of these attorneys began practicing Collaborative Divorce. Eventually, this group formed the International Academy of Collaborative Professionals (IACP). Today, IACP has over 4,000 members[viii]. As of 2009, over 22,000 attorneys, mental health professionals, and financial professionals had been trained in the collaborative method[ix]. The IACP has grown across state lines, national lines, and oceans to become a truly international organization. Collaborative Divorce has become a worldwide divorce process. Further, some states have even established Collaborative Divorce as a statutorily sanctioned ADR process.[x]

Collaborative Divorce – Defined

At its most basic level, ICD is a solutions-based and non-adversarial process that incorporates interdisciplinary information to reach a resolution[xi]. ICD’s effectiveness relies on the recognition that human beings solve problems more effectively and efficiently in a cooperative process–by working together to reach their individual goals. In laymen’s terms, two parties pulling in the same direction towards agreed goals gets them to those goals much more effectively than playing tug o’ war.

Core tenets of Collaborative Divorce include: 1) the interest-based negotiation model[xii], 2) specialized communication techniques[xiii] , 3) a termination clause, incentivizing the parties and attorneys to remain in the collaborative process until resolution is reached, and 4) full disclosure of all relevant information by the parties

Interest-based Negotiation

Interest-based negotiation may seem counter-intuitive to most family law professionals. After all, most lawyers are trained in the adversarial model, predicated on a win/lose outcome. Our competitive society programs cause most clients to see all conflict as a zero-sum game. In the experience of the authors, most clients have far more fundamental interests than winning. Their true interest is in their children being protected and in their being okay in the future. Winning, when dissected, is just a clumsy strategy for ensuring that they and their children will be okay.

Interest-based communication is an art and a skill, but it can be reduced to four basic steps.  The four-step, interest-based negotiation model is central to the ICD process. The four steps are as follows[xiv]:

1. Information gathering,
2. Identifying Needs and Interests,
3. Generating Options for Resolution, and
4. Resolving the issues by selecting options.

 In step one all relevant demographic, financial, and logistical information is gathered and processed so that an accurate picture of the current situation can be visualized. This can include financial statements, account statements, pay stubs, titles, tax returns, deeds, and wills and trusts (among other documents) on the financial side. On the parenting side, it can mean any number of things as well – school schedules, IEPs for children with special needs, work schedules, and any other relevant information that will assist the professionals in aiding the spouses to make an informed decision later in the process.

Once all of this information is processed, the next step in the model is to evaluate and address the needs and interests of both parties[xv]. This can take the form of mining for financial needs, both long-term and short-term, co-parenting needs, and emotional needs. The needs and interests are central to the negotiation process. Every option and resolution must be designed to meet both parties’ needs. Unmet needs and interests can create stumbling blocks and stalemates similar to an adversarial method. A failure to address needs causes clients to generate positions, which are counterproductive.

The next step in the interest-based negotiation model is generating options for resolution. Group brainstorming and individual work among team members usually produce these options. All ideas are accepted without judging their validity at this stage. Some may not be feasible, but even options that appear impractical are valuable at this stage[xvi]. Most clients and professionals are accustomed to evaluating whether an option in their head is viable before they mention the option. This keeps good options off the table prematurely.  The goal is to generate as many options as possible that are designed to meet the needs and interests of both parties.  The key at this stage is to get away from saying yea or nay to options, but to simply generate them.

Once the clients and professionals (i.e. the Collaborative Team) have exhausted the available options, they direct clients to determine whether each option meets their needs and interests. This is the resolution stage. Typically, the team moves down the list of options and each client is asked whether that option works for them. A simple “yes” or “no” suffices. Once these answers are obtained for each option, it is easy to identify the options for which both clients answered yes. These are the options that are explored in greater depth.

At this point, the professionals and clients work together to evaluate which of the available options best meets their needs and goals. Financial professionals can provide projections and tax analyses that help clients make decisions. Mental health and child specialist neutrals can provide feedback as to how a particular option may impact children. Attorneys help their clients understand the legal ramifications and compare the available options to the range of likely litigated outcomes.

While the process appears linear, it is not. Frequently, the collaborative team realizes it must be missing data, failed to identify an important need or interest, and/or  failed to generate sufficient options to resolve a matter. This inquiry needs to be made at each and every point that the team encounters sticking points in the negotiation. If a sticking point is reached in the resolution phase, then the team must re-assess whether important information is missing (leading to the use of subjective criteria or assumptions), whether a client is struggling with a need that is not being identified and met, and whether there are additional options that may better meet the client’s goals. Similarly, if a client is resistant to producing important information in the data-gathering phase, the team and/or that client’s team (attorney and/or client) must determine what need or interest the client is trying to serve by withholding the information. Thus, the process and the team moves between stages as the need arises.

The hallmark of ICD is the use of collateral professionals in the Collaborative Team. Obviously, every collaborative case requires a decidedly non-neutral attorney for each party. Some ICD processes also involve collaborative coaches that work primarily with a particular client. However, all other professionals on the collaborative team are hired by both parties jointly and are charged with being neutral in the process[xvii]. This means that they do not have a primary duty to work for the benefit of either party to the exclusion of the other. They work individually with each client, but they are charged with working for the benefit of both parties.

The most common team members, other than clients and attorneys, are financial professionals, mental health professionals, and child/parenting neutrals. While other neutrals can be used (appraisers, etc.) the core components of an ICD team (or Full Team) are financial and mental health professionals[xviii].

Generally, the role of a financial neutral is to provide financial knowledge and to explain all of the available options for outcomes. The financial neutral can be a financial planner, an accountant, or a financial counselor[xix]. Financial professionals (FP) gather and synthesize all of the financial information from the clients such as tax returns, business financials, bank statements, credit card statements, mortgage and loan statements. The FP then either constructs or helps the clients construct budgets and also uses the information gathered to generate a net-worth statement. Due to the sometimes complex nature of cash flow, property settlement, and changing tax laws the FP conducts a tax analysis on any brainstormed ideas. And unlike in traditional divorce where predictive analytics are considered speculative, the Collaborative FP projects forward from present day, utilizing various assumptions agreed upon by the parties to look at how the various outcomes appear in the future[xx]. Retirement is taken into consideration and even Social Security is considered.[xxi]

The FP also makes the necessary recommendation or determination on whether further experts, such as art appraisers, business valuators, mortgage professionals, and insurance professionals, are needed. Sometimes, these can be done by the FP who is working on the case, but more often than not, more specialized knowledge is needed for more complex situations. The job of the FP is to translate those results into meaningful conversations during collaborative conferences.

There are two possible roles for mental health professionals: client coaches or child neutrals. As a coach, a mental health professional is not neutral[xxii]. They are charged with helping their client manage the emotional and communication aspects of the ICD process. They do not undertake therapy with clients. Their services are engineered solely to help clients through the ICD process. Therefore, they will not try to resolve pre-existing emotional issues or conflicts. Instead they will provide skill building and tools to help clients mitigate the effects of counterproductive emotional issues or family dynamics.

These skills help clients communicate needs and make requests of the other party in a way that can be heard and effectively processed by their spouse. This reduces defensive, fearful, and other counterproductive reactions in the negotiation that often bog down other negotiation processes.

Coaches also help their client work through difficult emotional triggers or other issues outside of ICD negotiation conferences. This further reduces the amount of time that the team spends on emotional issues in the actual negotiation conferences. Further, it reduces the role of emotion in the decision making process. That, in turn, supports calm, rational, and effective decision making by clients.

Coaches spend time mining for needs and interests of their client. Coaches spend their careers listening in ways that collaborative attorneys learn only during and after their first ICD training. Therefore, they are often much quicker to identify the needs behind the client’s statements and strategies.

However, as a child specialist, the professional is required to be neutral[xxiii]. Their role in the ICD process is to meet with the children and parents and then provide feedback to the team (including parents) as to the children’s coping, concerns, fears, needs, and interests. They are charged with essentially being a substitute for the child in the negotiation room. They are comparable to a guardian ad litem, literally meaning the “voice of the child” in the negotiations, in the ICD process. This means. At any point during an ICD conference if the child’s welfare is being neglected, the child neutral is encouraged to literally interject speaking in the first person from the child’s perspective.[xxiv]

Attorneys in the ICD process advocate for their clients with zeal and skill[xxv]. However, the style of advocacy is different. Collaborative attorneys forgo the traditional adversarial and positional negotiation model in favor of an interest-based model. Collaborative attorneys have been instructed by their clients via the collaborative pledge to advocate for them in a way that seeks to understand the other party’s needs and interests so that any agreement reached is durable and engineered to the family’s specific needs[xxvi]. The client selects this goal of the representation[xxvii].

Attorneys are not looking to win a case. They are trying to determine what a successful and effective resolution looks like in the eyes of their client. Then they work to understand that same information for the spouse. They help each other understand the other spouse’s needs. Then they work as part of the ICD team to generate options that will meet both spouses’ needs.

Along the way, the attorneys meet with their clients to discuss needs, interests, finances, concerns, and other issues involved. There are phone conferences, emails, and in-person meetings between ICD conferences. Attorneys help clients evaluate their Best Alternative to a Negotiated Agreement (BATNA)[xxviii]. This BATNA is analyzed in comparison to the resolution being evaluated to determine how the resolution compares to what the client can expect if litigation ensues[xxix]. This includes likely ranges of support awards, durations, property divisions, custody outcomes, costs, attorneys’ fees, and any other legal decisions that would be made in court.

When legal issues or questions arise, attorneys perform necessary research. Both attorneys typically share legal opinions in an ICD conference, rather than each attorney having a one- on- one session with a client. This prevents clients from unknowingly getting differing opinions from their attorneys on the law. If the attorneys differ in their view of the law, then the clients need that information to understand that legal opinions differ on the issue. Differing legal opinions provided in private generally create positional dynamics from the clients. Of course, the clients are informed that these opinions will be shared in a joint session.

Attorneys draft all agreements and other necessary paperwork to finalize any agreements reached. These agreements are reviewed independently with clients and also reviewed in an ICD session to ensure that they accurately reflect the parties’ intent. The benefits of the ICD process are both immediate and longitudinal. There are benefits for clients as well as professionals.

One clear benefit of ICD is that clients get resolutions specifically engineered for their families. For example, rather than potentially destroying a family -owned business by transferring shares to an ex-spouse or forcing a liquidation, a buy-out can be agreed to over time with interest. Rather than getting a typical every other weekend and one day a week co-parenting agreement, the spouses may agree to a myriad of other schedules that fit their individual lives and the patterns of their family and children. Rather than have a court ordered sale of a home in a poor market, the couple can agree to hold on to the home after the divorce and wait until they can realize equity from a sale.

Perhaps the biggest benefit to clients is the durability of the agreements reached in the ICD process. Because the process identifies the true needs and interests of the parties, the agreements are designed to address those needs more effectively than traditionally negotiated agreements. Further, the lack of leveraging, threats, and strong-armed tactics avoids either party feeling as if they have been forced into an agreement. Lastly, agreements are the result of face-to-face discussions that create consensus. All of this combines to create a sense of fairness and a commitment to the agreement that is lacking in most adversarial negotiated agreements. This, in turn, reduces or eliminates future litigation and disputes between the parties.

ICD settlement agreements are engineered to protect the best interests of the kids. The use of a neutral child specialist ensures that the needs of the children are accounted for in the agreement. Instead of being based solely on what the parents think is best for their kids, the agreements are based on objective information from an expert[xxx]. This largely pre-empts the all-too-common emotional, subjective, and biased arguments about whom or what is best for the kids.

ICD also combats future conflict by modeling and teaching communication and conflict resolution skills to clients. For instance, the skills of active listening, reframing, mining for interest, and making requests instead of demands are frequently carried forward into the co-parenting relationship. Clients walk away from the process with an appreciation for the importance of seeking to understand the other party’s needs in resolving conflict. Many clients have remarked that if they had possessed these communication skills during their marriage, then they may not have been divorced.

Further, in bypassing the me-versus-you positioning of adversarial negotiations, the clients avoid much of the residual acrimony that lingers long after divorce. Typically, there is enough lasting discord from the marriage. ICD is designed to avoid creating more in the divorce process.

One of the most common complaints from clients in the adversarial process is the devastation wrought on their finances. The expense of hourly billing in litigation is often the most destructive aspect of a divorce. The parties may find themselves raiding retirement accounts, running up credit card debt, or borrowing heavily from friends and family to finance adversarial divorces. The ICD process typically costs significantly less than adversarial divorces[xxxi]. Many ICD professional use flat fees in lieu of hourly billing. This is possible because of the predictable structure and efficiency of the ICD process.

Perhaps more importantly, financial solutions in an ICD process are engineered to promote both clients’ future wellbeing. When the win/lose paradigm is bypassed, solutions that optimize both spouse’s financial futures are possible. Tax implications are discussed and resolved in ways that keep the most money possible in the hands of the family. With the help of financial neutrals, clients leave the process with a much better understanding of the current financial picture and the projections for their future.

Many clients enter the divorce process largely ignorant of the family’s finances,  as they may have left the financial side of the family to the other spouse. Thus, the are intimidated by financial issues and often experience great anxiety and fear when negotiating with what they perceive to be their more educated spouse. The beauty of the ICD process is that the more educated spouse, the attorneys, and/or the financial neutral can help educate clients on the financial issues. This alleviates the anxiety and fear that often torpedoes adversarial negotiations. In addition, the clients take that financial education into their future. Many clients feel financially empowered for the first time as a result of the ICD process.

Last, but not least, clients reach resolution significantly faster in the ICD process. On average, the Collaborative Divorce process produces a resolution in 17 weeks[xxxii]. The average litigated case lasts 17 months[xxxiii]. This greatly reduces the period that clients have to live in the divorce. It therefore allows the emotional and financial recovery to begin much sooner than the typical litigated case.

Benefits to Professionals

Professionals benefit from a constructive rather than a destructive process. At the end of the process, professionals find more satisfied, far less traumatized clients. This leads to increased business referrals. Also, finding resolution in a dignified and respectful process has a lasting benefit on the psyche of a collaborative professional. There is less professional acrimony, as professionals work together to resolve the divorce. There are no backroom deals and underhanded strategy sessions. The collaborative paradigm is healthier than the destructive nature of the adversarial process. Working together promotes camaraderie and professional relationships, resulting in better performance over time for clients.

Clients tend to be low maintenance due to the safety they feel in the ICD process. The Collaborative Divorce process creates the safe container that lowers client anxiety and fear. The support of coaches and financial neutrals multiplies this affect. This in turn, at least for these authors and their colleagues, leads to more focused, pleasant, and satisfied clients. All of these benefits for professionals prevent the excessive stress, anxiety and burnout that frequently accompany adversarial processes.

The changing legal climate in the United States has forced attorneys to find more effective ways to resolve their client’s family law and divorce issues. Collaborative divorce has emerged as the leading process for meeting this market demand. Through its negotiation model, non-adversarial approach, and use of collateral professionals, ICD addresses the needs of clients more effectively, with less collateral damage than traditional processes. The demand for ICD is growing and wise professionals will make this process a part of their practices.

 - Randolph Morgan III, JD & Michael Kothakota, CDFA, AFC.

The inevitable trend towards binding arbitration in the family courts   of South Carolina – a new path forward for managing yourselves,   your caseloads and your clients’ lives

This Article is available in PDF form here for downloading.

On November 3, 1973, I became licensed to practice law in South Carolina.  I vividly remember leaving the South Carolina Supreme Court after the swearing-in ceremony on a chilly, but otherwise gorgeous day in Columbia.  I was bedecked in a dark, wide-lapelled, triple-knit polyester suit with a perfectly coordinated polyester tie, perfectly coifed hair, and perfectly shined black wingtip shoes. I attended a celebratory supper with my family where I was the star attraction (it was the only time I can remember in my entire adult life when every word out of “Attorney Knobel’s” mouth came forth on the wings of wisdom, clarity, grace and charm).  I also vividly remember trying to fall asleep that night while remembering all those suffering hours studying for the bar exam (although I actually have no memory of taking the bar exam).  Ultimately, I drifted off to sleep with a great sense of pure joy and satisfaction for a job well done. I was now an attorney…an “Esq.” On November 4, 1973, when the alarm clock blared, reality bit.

I don’t have a clear memory of anything else in my professional life after November 3, 1973, except, by the grace of God and good luck, I have awakened as an attorney for the past 37 years; and like the “chains around Marley’s Ghost”[ii], I remain burdened by all those years of practicing family law in one form or another in South Carolina.

I have a blurred memory of caseloads, court deadlines (both real and imagined), angry and disgruntled clients, working late, working on weekends, working during family vacations, nightmares and night sweats, and rarely having anything close to that naive sense of achievement that I felt on November 3, 1973.

I began my legal career in Anderson, South Carolina, in January 1975.  It was the year of “Jaws”, and in those first months of my fledgling law practice, my jaws moved quite a bit.  But it was different then.  In 1975, every county in South Carolina had a “county-and-family-court judge” (the unified court system under which we all continue to practice law was instituted in 1976), and the ebb-and-flow of a family law practice in the 1970’s was much different than it is now.

Back then we would file a complaint at the clerk’s office and request a temporary hearing in our family court, knowing that this hearing would be scheduled for a day and time six months or longer after the filing date.  The temporary hearings were actual trials, where you called and cross-examined witnesses and presented evidence, and it was not at all uncommon for the temporary hearing to require a day or more of testimony.

The “agency cases” (such as the departments of Social Services and Juvenile Justice) did not dominate each week’s family court dockets; nor did child support rules; nor did motions for discovery or motions to compel discovery responses; nor did contempt of court hearings; nor did pro se filings; nor did emergency hearings and domestic abuse hearings.  Your uncontested final divorce hearings were conducted in the family court judge’s office, by sworn affidavits, without a hearing record.

In the mid-to-late 1970’s, no family law attorney ever heard of mediation or arbitration or alternative dispute resolution.  Because it wasn’t known, it wasn’t needed.  You simply informed your family court clients to be patient, they would have to “wait their turn”, and there was nothing an attorney could do about it…it was the judicial system we had in place at that time. “No harm, no foul, Mr. and Ms. Client,” attorneys said. “We’ll let you keep your lives and your children’s lives on hold until we get around to you.”

We were all in the same boat – judges, lawyers, litigants.

Family law attorneys were in for a nasty surprise, however, when they learned that the South Carolina Supreme Court was not as enamored as the family law attorneys with “the pace of play” in the family courts.  On February 9, 1983, a paradigm shift began to occur in the practice of family law.  In its recognizing that the family law bar’s snail’s pace of practice contrasted with the litigants’ outcry for a quicker resolution of their cases, the Supreme Court adopted sweeping changes to the South Carolina Rules of Family Court, with perhaps the most impactful rule being Rule 52 (“Temporary Relief”) (now Rule 21).  In February, 1983, Rule 52 read as follows:

Evidence received by the Court at temporary hearings in all domestic relations matters shall be confined to verified pleadings, affidavits, and the financial declaration          prescribed by Rule 19 of the Rules of Practice for the Family Courts, unless good cause is shown to the Court why additional evidence or testimony may be necessary.[iii]

The current Family Court Rule 21 became effective five years later, on September 1, 1988, and it reads as follows:

(a) Motion for Temporary Relief. A written motion for temporary relief, and notice of the hearing thereof, shall be served not later than five days before the time specified for the hearing, unless a different period is fixed by order of the court. In an emergency situation, such order may be made on ex parte application.

(b) Evidence at Hearing. Evidence received by the court at temporary hearings shall be confined to pleadings, affidavits, and financial declarations unless good cause is shown to the court why additional evidence or testimony may be necessary.

(c) Service of Affidavits. Notwithstanding the provisions of Rule 6(d), SCRCP, affidavits filed at a temporary hearing need not be served on the opposing party prior to the temporary hearing.[iv]

Over 23 years and a million family court cases later – except for the advance notice requirement of the temporary hearing, and the lack of advance notice regarding the contents of the opposing party’s affidavits – not one single word has significantly changed the Rule governing temporary hearings, nor have there been any noticeable changes in the method or manner in which that Rule continues to be utilized in the family courts.

Transitioning from the two-day trial of a temporary hearing to a 15-minute “affidavits presentation” before your family court judge was pretty jarring for those who are old enough to remember.  In theory it was a brilliant move by the Supreme Court: a temporary hearing was just that – temporary – and it was intended to be both heard and decided expeditiously by the judge (immediately at the conclusion of the hearing). It provided clients with intermediate, but nonbinding, relief until one could get back into the courtroom for your final hearings, with at least the expectation that this final hearing would be completed within several months of the commencement of the action.

For those attorneys who today practice family law anywhere from Walhalla to Charleston, and from Aiken to Columbia to Rock Hill to Florence and on to Conway, how are your clients enjoying those temporary hearings?  In the Tenth Judicial Circuit, comprised of Anderson and Oconee counties, the temporary hearing will most likely be scheduled anywhere from two to three months after the attorney filed the complaint. Depending on the attorney’s work ethic and whether the hearing was before a visiting judge, the temporary order may be signed immediately or a month or more after the attorney sent it to his or her judge.  Unless the attorney is required to go back into court for further temporary hearings, then his or her clients’ lives will continue to be “kept on hold,” but nevertheless governed by the temporary order for the next one to two years.

Are there any problems with that process?  I mean, we are all still in the same boat, aren’t we – judges, lawyers, litigants?

There is a problem with this scenario, and it is a glaring one: in 1975 there were arguably 46 family court judges; in 2012, that number has “increased” to 52 (60, if you include the “retired but active” judges).  According to the South Carolina family court statistics, there were 60,364 new case filings statewide in 1978, with 17,999 cases pending at the end of that calendar year.[v]  New filings continued to increase every year, reaching an apex in 1995, with 105,660 new filings, and then slowly declining annually, with there being 74,616 new case filings in fiscal year 2010-11, and 38,971 cases pending at the end of that fiscal year.[vi]  While the difference in new case filings in 1978 compared to 2010-2011 represents an approximate 25% increase, the number of cases pending during that same span of time has more than doubled.

These statistics are also misleading in terms of each family court judge’s actual caseload. The “new case filings” represent those cases which are assigned a new file number when the case is commenced.  It does not factor in the flood of other matters which a family court judge must handle every day during a typical week of court: non-temporary hearing motions, emergency hearings, contempt hearings, bench warrants, pro se filings, domestic abuse hearings, status conferences, pretrial conferences. Additionally, agency-related cases now dominate every week of family court somewhere in the State, with very little docket time available for the judge to hear and resolve what we euphemistically term to be the “private cases docket” relating to divorce or custody matters.

Furthermore, if you exclude the “in chambers” weeks over the course of the year, and a judge’s allowable vacation weeks, there are approximately 39 weeks available for “in-court time” every year.  There is also a disparity, county-by-county, regarding (1) the number of “weeks of family court” docketed in that county per year, and (2) the number of assigned judges to that county per week of court, all dependent upon various demographics affecting that specific county (for example, the population of the county, that county’s new case filings and cases pending per year, or the availability of family court judges to be assigned to the county).

In her February 8, 2012 State of the Judiciary Address, South Carolina Supreme Court Chief Justice Jean Toal informed the General Assembly that, according to the most recent national statistics, our State judges’ caseloads averaged 5,011 cases per judge, a figure representing more than double the national average of “filings per judge.”[vii]  “People are hurting and are desperate in our family court system…real people who need help suffer because we don’t have the family court time for them,” Justice Toal stated, also noting that 20 percent of family court (time) is spent just on collecting child support.[viii]

            Judges, lawyers and litigants – you’re gonna need a bigger boat.

Increasing the size of the family court bench statewide by adding new judgeships will most certainly lend itself to reducing the number of cases-heard-per-judge and will be immediately beneficial to family court litigants and family law attorneys throughout South Carolina, and it is a recommendation that should be universally embraced and supported by this State’s family law bar.

In tandem with an increased family court bench, however, there is already in place a viable option for expanding “the size of the boat”, but only if you’re clever enough to embrace it – it’s called binding arbitration.

Take it from someone who never was one, but who has observed many over the past 37 years – family court trial lawyers in South Carolina comprise the very best trial lawyers in any court, at any level, in this State…period.

On a level of importance, is it more important to be able to successfully seek (and recover) insurance proceeds for someone injured in a car wreck…or to be able to win for a parent the custody (lives, souls, hearts) of their children?  How important is it for a family court trial lawyer to anticipate the future financial needs of your client and then successfully provide for those needs?  Can you compare trying a “road-closing” or condemnation case with defending a case where one side is attempting to forever terminate a parent’s right to be with his or her children?  How does a family court trial lawyer artfully remove (and then later skillfully use) the emotions (anger, bitterness and hurt) in a case where a client’s spouse has committed adultery (for many, the ultimate marital sin)?

A family court trial lawyer is both required and compelled to be, concurrently:

• Brilliant and mentally agile
• Eloquent
• A skilled therapist and counselor
• Prescient
• Empathetic
• Cool under pressure
• An exceptionally hard worker (always fully capable of outworking the opposition)
• Able to focus, laser-like, on the task at hand
• Personable (both inside and outside the family courtroom)
• An amazing, skilled negotiator
• Always overly-prepared and trial-ready
• Able to fully control, and remain in control of, the court process
• Able to win every appeal, whether representing the respondent or appellant

And with all these diverse skills, a family court trial lawyer has to impress only one person in the room; not twelve, not six – just one, just a jury of one.

Consider the following hypothetical: a family court trial lawyer has the talent and the abilities to control every aspect of his or her case (client and witness preparation, evidence preparation, preparation for cross-examination). What’s left to control?  You can’t pick your decider and you don’t have a clue when your case might be called to trial. It is the luck of the draw.

Further, an attorney has a great case for joint custody, but the family court judge who is to try your case never awards joint custody in a contested case, and rarely grants anything beyond “standard visitation.”  And for that matter, the attorney has drawn a judge who has a reputation for rarely, if ever, awarding alimony.

The matter becomes more complicated. Also, the attorney is charging his or her client $200 (or more) an hour for out-of-court time, $250 (or more) an hour for in-court time, and $90 an hour for paralegal time.  The legal bill is now up to $7,500, but the client has paid only a $2,500 retainer to date.  The attorney also incurred pre-trial costs of over $2,000 to date, and had to hire a forensic expert.  The case is well over a year old and most probably has been closing in on two years.  The client has been recently (and maybe longer) second-guessing the attorny’s skill level (all settlement negotiations have so far been a bust, the depositions didn’t go so well, and you’re having some “witness problems”).

Now consider this for one moment. What if:

• You could pick your “judge.”
• You could pick the date, time and location for the final hearing of your case.
• You can chose not to worry about following strict rules of evidence (no “I object, your Honor, that’s irrelevant”….or no, “and Mrs. Smith what value would you place on that set of used Tupperware?”).
• You could choose not to have a hearing record.
• You could schedule your hearing without ever worrying about docket time, without ever worrying about what you will tell your client when he or she asks you “what’s taking so long?”
• If you have expert witnesses, you never have to worry about their attending (and charging you) for court appearances where there is even a remote chance that your case might be continued (no more paying double fees for an expert traveling to court and sitting in a family court’s waiting area).
• You can get a final decision within 30 to 60 days of your hearing.
• You can use the South Carolina Uniform Arbitration Act, [ix] which provides for binding arbitration, so that your client is guaranteed a final resolution.
• The total fees and litigation expenses incurred by the parties will be far less than if this same, identical case went to a trial inside a family courtroom…and what if you have a much better chance of your being fully paid.

In arbitration, your arbitrator needs to have a detailed arbitration order in place, review the pleadings, and know the issues beforehand…and start.[x] Be aware, however, that binding arbitration under the Uniform Arbitration Act is a completely different mechanism for reaching a final resolution of your client’s case than the arbitration process set forth in the rules governing Alternative Dispute Resolution (ADR), and this difference, albeit a significant one, can be found in subsections (a) and  (d) of Rule 12[xi]:

It should also be of significance to you that the important case of Swentor v. Swentor[xii] has held the following, in pertinent part:

Given our determination that the Arbitration Act and the family court’s general power to review and approve agreements in domestic relations cases are fundamentally incompatible, we conclude that the Arbitration Act prohibits the family court from exercising this power when presented with arbitration agreements. This Court must presume that, at the time the Arbitration Act was enacted, the legislature was aware of the family court’s power to review and approve property and separation agreements. See, e.g., State v. Bridgers, 329 S.C. 11, 14, 495 S.E.2d 196, 197-98 (1997) (“The General Assembly is presumed to be aware of the common law.”); Berkebile v. Outen,     311 S.C. 50, 53, 426 S.E.2d 760, 762 (1993) (“A basic presumption exists that the legislature has knowledge of previous legislation when later statutes are passed on a            related subject.”). If the legislature had intended family courts to exercise this power over arbitration agreements and awards, it would have either exempted domestic relations matters from the scope of the Act, or it would have expressly provided that arbitration awards involving domestic relations matters could be set aside if the family court determined that the award was unfair. Instead, we conclude that the purpose and framework of the Arbitration Act, as well as the limited grounds upon which the Act permits an arbitration award to be set aside, reveal the legislature’s intention that the agreements to arbitrate and the resulting arbitration awards be treated the same in family court as in any other court. See Nuckolls v. Great Atlantic & Pacific Tea Co., 192       S.C. 156, 161, 5 S.E.2d 862, 864 (1939) (“[I]t is not presumed that the Legislature intended to abrogate or modify a rule of the common-law by the enactment of a statute upon the same subject; that it is rather to be presumed that no change in the common-law was intended unless the language employed clearly indicates such an intention . . . .”).

Accordingly, we conclude that family courts presented with arbitration agreements and awards must proceed, as any other court, in accordance with the terms of the Arbitration Act. Thus, an agreement to arbitrate may be set aside by the family court only upon proof of “grounds as exist at law or in equity for the revocation of any contract.” S.C. Code Ann. § 15-48-10(a) (Supp. 1998). The court may correct or modify an arbitration award only in accordance with the provisions section 15-48-140, and the court may vacate the award only upon the establishment of one of the grounds set forth in section 15-48-130, or the rarely applied non-statutory ground of “manifest disregard or perverse misconstruction of the law.” Trident, 286 S.C. at 108, 333 S.E.2d at 787. Otherwise, the family court must confirm the arbitration award. See S.C. Code Ann. § 15-48-120 (Supp. 1998) (“Upon application of a party, the court shall confirm an award, unless within the time limits hereinafter imposed grounds are urged for vacating or modifying or correcting the award, in which case the court shall proceed as provided in §§ 15-48-130 and 15-48-140.”). [6. Our holding, of course, is limited to arbitration agreements resolving issues of property or alimony, and does not apply to agreements involving child support or custody. See Moseley, 279 S.C. at 351, 306 S.E.2d at 626 ("[F]amily courts have continuing jurisdiction to do whatever is in the best interests of the child regardless of what the separation agreement specifies.”).

 The only reason a skilled and talented family court trial lawyer would not consider binding arbitration is that constant, age old, often unspoken, “professional Mount Everest” known as “the right to appeal”—the proverbial “second bite at the apple.”  That “concern” works perfectly if: (1) your client can afford to pay for the appeal, or you choose not to charge your client for handling it, and (2) your client prefers to have his or her life on hold for another two years while the case winds through the appellate process.

In consideration of all the above, it would seem to me that in this 21^st century, modern-day practice of family law in South Carolina, there is no logical reason for a family law attorney’s failure or refusal to consider the “binding arbitration” option in every single case.

And if we accept, without blithely ignoring, the difficult and stressful realities inherent in our profession, but with a newfound understanding that we family law attorneys have the opportunity to expand our options for bringing about a final resolution to so many of our pending cases, while controlling so many variables in bringing about that final resolution – in “building that bigger boat” – isn’t it time to embrace these opportunities?

 -Barry W. Knobel, Knobel Mediation Services, LLC

Biographical submission:

Mr. Knobel is a retired South Carolina family court judge and a certified family court mediator with a statewide ADR practice (mediations and arbitrations) limited to family law cases.  He has also created “Family Court Litigation Support Services”. Mr. Knobel can be visited at his website – www.knobelmediationservices.com.

Introduction & Summary

This article discusses the Greensboro Landlord Tenant Dispute Program, a partnership between the Program in Conflict and Peace Studies at the University of North Carolina at Greensboro and the City of Greensboro’s Human Relations Department.  The program was developed through consultation with a wide range of local stakeholders to help landlords and tenants address and resolve disputes not falling under City and/or Federal Fair Housing guidelines. Launched in April 2010 and primarily using graduate students, the program has met the informational needs of residents and provided a forum for addressing disputes. The program has been responsive to the changing needs of the partners through data collection, analysis, and developed groundwork for a long-term partnership.

The Greensboro Landlord Tenant Dispute Program (GLTDP) is a conflict management program created through a partnership between the Program in Conflict and Peace Studies at the University of North Carolina at Greensboro and the City of Greensboro’s Human Relations Department. Although initially designed as a program to mediate disputes between landlords and tenants, the GLTDP has grown into a responsive, community-based partnership that pulls together resources from students and faculty at UNCG, staff and programs within the City of Greensboro, and a range of non-profit agencies in the Greensboro community. While the program is only into its third year, the successes thus far demonstrate best practices in community-engaged research[ii]  through the deliberate application of the planning-evaluation cycle;[iii]  an understanding of the range of dispute resolution interventions;[iv]  and dispute systems design.[v] At each stage of the program, partners have been challenged to think systemically about program development by incorporating human and technological resources, reflect on the results of formative and summative evaluation research, and to design a system responsive to the clients and stakeholders.

The development of the GLTDP program has progressed through several definable stages: phase one – consultation and development; phase two – funding and evaluation; phase three – developing sustainability. These three phases have been accompanied by active discussions with the major stakeholders about program development informed by the embedded data collection processes.

Assuming most readers of this article will be interested in how the program developed and demonstrated success, the article will follow the development of the program and share quantitative and qualitative data. The authors will also provide information related to the major stakeholders from field notes, quantitative data from the program databases, stakeholder surveys, unstructured interviews, written reports by students, and forms and training materials developed for the program. The article will conclude with some lessons learned for those planning similar programs and thoughts about the future of the program partnership.

Phase One – Consultation and Development (2008-2009)

The City of Greensboro’s Human Relations Department (HRD) was the first to identify the need for a new program to address disputes between landlords and tenants. In early 2008, Robert Nunn, HRD division manager, and Cheryl Gant, HRD fair housing specialist, noticed an increase in the volume of telephone calls received by the HRD’s Fair Housing Division (as many as 80 per month). Their analysis revealed while the majority of these calls did not fulfill the criteria for investigation of discrimination complaints under fair housing guidelines; the focus of many of these calls was around issues like repairs and security deposits that could benefit from additional assistance and intervention. The HRD has a work-sharing agreement with the U.S. Department of Housing and Urban Development (HUD) to investigate complainants of discrimination in housing related to the following protected classes; race, color, sex, disability, religion, national origin, and familial status. Gant is well known in the City for issues related to fair housing because of her investigative role, conducting education, and conducting outreach on fair housing laws. Residents were simply at a loss of where to turn for assistance with their issues and believed the City should help them. There were housing related resources and a community mediation center in Greensboro; however, no formal dispute resolution program focused on housing existed. The Greensboro Housing Coalition (GHC), a nonprofit agency, typically tried to assist residents with safety-related issues such as mold, repairs, and pest infestation; however, due to staff and budget constraints, GHC was unable to serve the majority of the residents requesting assistance. Nunn was familiar with mediation as he once worked for a nonprofit agency that provided mediation services to residents of Guilford County (which encompasses the City of Greensboro).  Through his knowledge of mediation and conflict resolution, he knew that this type of model would be well suited for disputes between landlords and tenants.  An organization that could focus on interest-based disputes instead of investing only in power or rights-based solutions could provide an opportunity to save money, find better solutions, and better engage stakeholders.[vi]  Additionally, Nunn was familiar with the (then) Conflict Resolution Program at the University of North Carolina at Greensboro, since he was an alumnus of the University, and believed this could provide an excellent opportunity to form a partnership.  After exchanging emails and telephone calls with Dr. Cathie Witty, the program director at UNCG, they determined this was an opportunity to offer a needed service to the residents of Greensboro using graduate students and volunteers trained in conflict resolution.

Process of developing the program

A program development team formed; which initially included Witty and Hayes from UNCG and Nunn and Gant from the HRD. This working team sought advice and background information from city/county government in North Carolina with similar programs in both Charlotte (Charlotte-Mecklenburg Community Relations Committee) and Winston-Salem (Winston-Salem Human Relations Department). A key outcome from discussions with representatives of the other programs was the importance of engaging the potential community stakeholders, especially landlords, as well as housing-related and tenant advocacy organizations. In 2008 and 2009, the program development team convened several meetings of key stakeholders, including two representatives from the Greensboro Landlords’ Association, GHC, several attorneys from Legal Aid of Central North Carolina, property management personnel from several large apartment complexes, representatives from Triad Real Estate and Building Industry Coalition (TREBIC), and an attorney who mostly represented landlords. These meetings allowed stakeholders to provide input into the program, ask questions about the process, and provide some initial awareness for the future program. In addition, the team then held several additional meetings with representatives from legal aid, the local magistrates, and the chief district court judge to discuss the potential implications and feasibility of the program to reduce caseloads in magistrate’s (small claims) courts. Typically, cases are resolved between landlords and tenants including summary ejectment in these courts. [vii]

HRD staff created marketing materials such as GLTDP brochures which continue to be used for outreach. Brochures were distributed to six of the most highly used city recreation centers and public library branches, ones with the most traffic and located in various sections of the City in an effort to ensure that all socio-economic classes are aware and being served by the program.  The HRD Strengthening Communities brochure includes a narrative about the GLTDP along with other work the HRD is doing in the community. Press releases were developed and distributed to various media outlets resulting in newspaper, television, and website promotion. In addition, awareness meetings were held across city departments.

The GLTDP team developed program forms and evaluation materials including the agreement to mediate, intake forms, participant evaluation forms, and the data collection methodology. The program-specific forms and processes were developed through an examination of forms from other mediation programs such as those operated by the Mediation Network of North Carolina,^[viii] North Carolina Agricultural Mediation Program,^[ix] and national examples of best practices in mediation program development.[x]  Faculty also agreed to integrate practicing in the program into their graduate level service learning and the capstone practicum course, which meant that students serving in the program could receive academic credit and additional professional supervision. It also meant that some additional program outreach could be done by students working on professional projects in other parts of the community.

Initial design of the program

The GLTDP was designed as an impartial, voluntary program to provide a mediation forum for landlords and tenants to eliminate communication barriers and work together on interest-based disputes. The primary referral sources for clients were also stakeholders in the original planning, including legal aid, HRD Fair Housing Division, self-referrals from tenants and/or landlords, and magistrate’s court. The program would be administered from the City by division manager Nunn, and staffed by a program coordinator from UNCG Conflict and Peace Studies. The program coordinator would also be a trained mediator; most likely a UNCG staff member or graduate assistant. Program intake workers and mediators would be trained volunteers supervised by UNCG faculty.

The initial plan for the program (see Figure 1) was that calls would be received through a dedicated phone line in the HRD. The initial call to the program telephone line would be screened by the coordinator and s/he would conduct a brief telephone intake. For a mediation to be scheduled, both parties must agree to come together and discuss the issues. The mediator’s role then would be to assist both parties in: (1) defining and clarifying issues; (2) reducing obstacles and facilitating more positive communication; (3) exploring possible solutions; and (4) reaching a mutually satisfactory agreement. If parties agreed on substantive issues, a memorandum of understanding would be created to document a resolution to the current issues and manage any future issues. A copy of the agreement would be shared with both parties and kept on file in the HRD.

Figure 1 – Initial Design of the Program Phase One:

Based on feedback during the consultation period, program developers determined that cases that were clear matters of law and procedure (e.g. eviction, matters already filed and/or adjudicated in magistrate’s court, alleged fair housing violations) would not be suitable for the program. Instead, the program would focus on communication issues or problems in the landlord and tenant relationship (e.g. unreturned phone calls, repairs, pest infestation, etc.).

Summary of Phase One

As with any partnership, negotiation of roles, responsibilities, and expectations is a crucial part of development. The key issues from the planning phase were:

1. Initial contact and establishment of need for the program,
2. Identifying individual and joint strengths of the partners and partnership opportunity,
3. Deliberate consultation involving major stakeholders from across the community, including landlord and tenants organizations, the legal community, and researchers, and
4. A review of best practice literature, especially program forms and evaluation instruments
5. The establishment of a Program Coordinator role, who serves as a point person between the University and the City.

Although the program development phase took almost one year longer than initially expected, the partners would come to understand that the extra time spent in the planning set the program up for further successes in the short and longer terms.

Phase Two – Funding and Evaluation (2010-2011)

During phase one both partners had examined possibilities for acquiring funding for the startup of this project.  The City’s HRD had already communicated to UNCG faculty during initial discussions about the partnership that there were no funds available to operate the program besides Nunn’s time to administer. The GLTDP was fortunate to receive one-time funding from the Graduate School at UNCG for the Spring semester 2010 for a graduate assistant (GA) who assisted with the development of forms, initial administration, and recruiting and training volunteers for the program during its startup[xi].

The program partners were fortunate to receive a grant from the Community Grants Program administered by the Community Foundation of Greater Greensboro (CFGG) to initiate the program. The grant was written to provide funding for the development of the program, especially for initial operating expenses, funding for extending the position of the program coordinator, training of volunteer conciliators and mediators, and an initial evaluation of the program after one year. The program team had anticipated being able to fund the program coordinator position for at least most of the fiscal/academic year 2010-2011. Unfortunately, the grant amount requested was not fully funded and it only covered partial pay for Summer 2010, some operational expenses for the program through the first part of 2011, and the evaluation of the program.

Two factors made the initial design of the program (See Figure 2) difficult to maintain. First, the difference in the requested and received amount of funding made fully staffing the program difficult since the coordinator was responsible for doing the intake work. Second, initial data collected in the first few months of the program indicated that the coordinator was spending, in some cases, hours rather than minutes, as anticipated, working with clients on the phone. This meant that a 20-hour position was inadequate to serve the number of callers if s/he was to continue doing all the intake work.

These changes meant that the team had to consider redesigning the process of the GLTDP to better utilize existing resources.[xii] They determined that the most effective way to provide continuity and consistency was to hand over the duties of the program coordinator to an individual who would occupy the existing graduate assistantship for the UNCG Program in Conflict and Peace Studies[xiii].

The funding and personnel changes also meant that the expectations for the program coordinator role had to change, since it was not possible for the coordinator to be located in the City and UNCG during his/her 20-hour graduate assistantship. The program partners agreed on a phone in system, in which the program coordinator and intake workers would choose a day of the week and phone in to check the voice mail messages on the dedicated phone line (see Figure 2). Any cases on these days would be handled by the intake worker.  The intake workers then completed their case reports based on the intake form and sent them to the program coordinator via email so that the data could be entered into a spreadsheet or database program. The program coordinator remained responsible to, and was responsible for, providing monthly data reports to the City and UNCG. Results from that data in phase two are presented below.

Figure 2 – Phase Two Program Design:

Phase Two program evaluation data

In June 2011, the program evaluation team undertook an overall review as part of the grant report to the Community Foundation of Greater Greensboro. This review included data collected from the intake forms by volunteers and mediators (n = 214 cases as of June 30, 2011). The data from these forms was entered into a spreadsheet program by the program coordinator, and monthly reports were provided to the City and the University. Also, a twelve question open-ended survey was provided to a list of eighteen stakeholders who had been involved in the project (e.g. City of Greensboro staff, UNCG faculty, students, and alumni, and volunteer mediators from the community) and twelve responses were received. The data analysis below uses data from each of these sources throughout. UNCG faculty post-coded and developed themes in consultation with City staff during the creation of the grant report.

Results from Phase Two

Tenants were the primary initiators of the calls to the program (99%). Tenants were described by program staff as primarily coming from low income and minority communities, with many calls coming from residents in Section 8 housing. Most of the tenants were looking for the resolution of a key issue. The key issues during phase two are reported in Table 1 below.

Table 1 –Categorized issues from callers Phase Two

While the numbers portray one picture of the issues, the volunteer intake workers provided insights into their experiences with clients:

Many of the clients were public housing/Section 8 residents frustrated by policies for those programs.  Some number of callers are residents in substandard housing; the callers were sometimes frustrated by the conditions but were unwilling to pursue enforcement through the inspections department or unwilling to engage in discussion with their landlord because they did not feel they were able to afford anything else.  The housing might be substandard, but their landlord might have “special” arrangements with them where they did not have to pay a deposit, paid lower rent or whatever. Some number of the clients were of more moderate to upper income with a variety of issues.

Program staff and volunteer intake workers reported that irrespective of the issue, tenants were glad to have someone to speak with about their issue and appreciated a listening ear. The outcomes of the program (see Table 2) indicate that over half of the calls (58%) resulted in the program staff being able to assist the callers with the issues through differing levels of involvement with the program.

Table 2 – Summarized Case Record Data Phase Two

These numbers tell some of the story as to the outcomes the program was able to achieve for clients, both tenant and landlords during phase two. It seemed for most of the volunteers and staff involved, that these results were directly attributable to the impartial third-party perspective that the program offered.

… we are given a framework to work with that is non-threatening to both parties and listening seems to accelerate progress on both sides.  I think listening and getting resources when you are in a difficult situation seems to really help some of the tenants.  I think the landlords at times are used to being the ‘heavy’ in the situation.  When they are treated with respect they seem to be willing to concede some points.  In this sense, fairness is projected toward both sides and people respond to this.  They respond to being heard…

An example of an often expressed student volunteer sentiment was, “Every time I speak to a tenant or landlord and they express their appreciation to me for assisting them, it is confirmation to me that I am providing a valuable service.”

Summary of Phase Two

Building on the plan developed in phase one and managing a series of unexpected issues, the GLTDP team developed a new plan that led to some changes in phase two. Ultimately, phase two data demonstrated success in addressing the issues clients were facing, albeit with very little use of mediation. The phase two results pointed to an apparent preference among the clients for resolving their issues over the telephone (29%), simply being provided additional information/resources (18%), resolving the problems on their own with little assistance from the intake worker (15%), with only a small proportion seeking the direct assistance of a mediator (5%). This was in contrast to the unexpectedly small proportion (20%) of people who simply refused any assistance from the program staff at all. Put in perspective, during the first year, half of the people who program staff spoke to were able to reach some form of resolution to their issue and a further one-third were provided some form of information or referral. Although the program staff and team saw positively assisting 80% of the callers a success, it was not in the way the program was originally designed. This interesting situation created the need for additional discussion and reflection about the true nature of the program and how it may need to be again redesigned to better address the population being served. It was important to consider the meaning of the results since they were different than initially expected. Further analyses and conversations with program volunteers were the only ways to determine how best to move forward.

Phase Three – Developing Sustainability

The thinking that began phase three occurred during a meeting in Spring 2011 when the role of the telephone intake worker was reframed as conciliator and an online data entry system were introduced. The monthly data reports and ongoing program evaluation demonstrated that intake workers were doing more than gathering information for an infrequent mediation process. Although the initial design of the program was to conduct face–to-face mediation of disputes–reflection and discussion among the partners recognized that the process was operating effectively as a telephone-based conciliation program that included a range of other options. In GLTDP’s application of the community engagement model and dispute system design, it was crucial that the process be fluid, adaptable, and open to change[xiv]

Conciliation

The conciliation process is one with a long history in dispute resolution theory and practice. Conciliation is defined as a process in which an impartial person acts as an intermediary to open communication between parties to resolve their dispute.[xv] Conciliation is used as a standard part of the dispute resolution process by organizations like the Better Business Bureau (BBB)[xvi], Federal Mediation and Conciliation Service (FMCS) in the U.S., and the Advisory, Conciliation, and Arbitration Service (ACAS) in the U.K.  Although typically used in labor, business, and complex multiparty international disputes, the conciliation process is utilized as an interim step before direct negotiations take place; in cases where parties may be more comfortable or are required to address the other party indirectly; or as a way of opening a dialogue that may lead to additional dispute resolution methods such as mediation

The use of conciliation in the GLTDP did not represent a significant change in how calls were handled, but it did alter the thinking about the role of the conciliator. Calls are placed to each individual so that the parties are not required to address their disputant directly (see Figure 3). Parties can speak freely with a conciliator to achieve a mutually acceptable resolution or gain power through information and resources provided by the GLTDP to resolve the conflict on their own.[xvii]

Online data collection and information sharing

The GLTD program coordinator role was beginning to operate effectively when added to the existing job description of the UNCG Program in Conflict and Peace Studies G.A. in 2010-11; however, the coordinator continued to struggle with the amount of time it took to communicate with the conciliators and interpret and input the data they provided from the intake forms. The main issues were ensuring all the conciliators had access to the forms and resources they needed, making sense out of sometimes lengthy narratives about cases from the intake forms, and coding these forms into format for the database that was useful to both the City and the University.

As a remedy to this situation, the program team decided to pilot an online web portal system. The team created a password-restricted website through Google sites that allowed the conciliators to have access to the needed forms, community resources, training materials, and a form for entering their own case data directly into the database. Although the online form was similar to the print intake form already in use, the direct entry by conciliators and application of numerical codes developed in phase two allowed for more efficient and standard data entry that could be compiled quickly and shared among the partners. Initially, the program implemented a Qualtrics database because of an existing site license through UNCG, but in January 2012 changed to Google forms. The Qualtrics system did not allow HRD staff direct access to the data, relying on UNCG to produce monthly reports for the City. The move to Google forms provided a way of allowing protected access to the data for staff. 

Figure 3 – Phase Three Model of the Program:

 Some Initial Results from Phase Three

Although phase three started less than one year ago, some interesting results have emerged. As in phase two, the key issues for callers were housing (12.93%), a drop of 18.45 % since phase two; financial issues (28.45%) an increase of 5.86%; health/safety issues (49.14%), an 18.82% increase the highest of any issue; and interpersonal issues (9.48%), a drop of 2.22%. For more information see Table 3 below. 

Table 3 – Issues from callers by categories Phase Three

The outcomes of the program in phase three (see Table 4 below) indicate that over two-thirds of cases (68.9%) resulted in the program staff being able to assist the callers with the issues through differing levels of involvement with the program.

Table 4 – Summarized Case Record Data Phase Three

(n = 116) Percentage of calls which could be addressed by program staff of all calls

(n = 95)Average time directly dedicated to issue

The data in Table 4 indicates some changes in proportion of issues resolved through conciliation efforts of the program from phase two to phase three. Changes to self-resolved or resolved through a formal mediation process were small, but larger for the proportion of referrals to other agencies and informational calls. It was interesting that in cases where no further contact was made, conciliators still averaged twenty-six (26) minutes of work attempting to contact either party in the dispute. In cases where the issue was inappropriate for the program, it was most often because the caller was outside of the city limits of Greensboro. Anecdotal evidence from conciliators suggests that in these cases, they still attempt to provide information for callers about where they reside, although time serving these cases has yet to be recorded consistently.

Summary of Phase Three

The program changes made in phase three seem to be building the GLTDP towards a more sustainable model of continuation. The centralization of case distribution in the program coordinator position has ensured that cases are evenly distributed among the conciliators and the integration of cloud-based technology has made data capture and sharing more seamless than before. The costs of the program have been kept lower, mostly out of necessity, but seem to have increased the buy-in of all the partners and the capacity to fulfill student learning goals, research, and service provision goals. The Program in Peace and Conflict Studies has been able to continue staffing of the GLTDP by incorporating a clinical conflict intervention course into a newly revised curriculum, mentored by faculty and organized by the program coordinator, hopefully ensuring a continued partnership.

Although data analyses across the phases are still in progress, the changes in case outcomes shifting to housing and health/safety issues could indicate the overall growth in awareness of the program. Conciliators often refer housing issue callers to rights-based agencies for solutions (advocacy and legal), and it is possible that conciliators have therefore become more adept at working with health/safety issues and collaborating on interest-based solutions with both parties. These data from phase three also reflects the program’s evolution from a mediation program into a wider dispute resolution program. Conciliators have learned to fit the dispute to the proper forum and with that knowledge are better equipped to help callers. Reflecting on these changes for GLTDP and the clients it serves, partners will need to consider whether the program has been improving at serving the needs of the community or it is simply that the practitioners are getting better at retaining clients in the program.

Impacts on Partners:

Contributions to City of Greensboro

Anecdotal and empirical evidence pointed to strong satisfaction with the Greensboro Landlord Tenant Dispute Program (GLTDP) among the City of Greensboro employees. Human Relations director, Dr. Anthony Wade, says that he often discusses the program as a “model of University and City partnerships.” The GLTDP program was also recognized in the city manager’s report in 2011. Some quotes from program volunteers demonstrate some of the impact the program has had and may be able to have in the future.  According to Nunn, the City of Greensboro created a Management Accountability Performance (MAP) plan that was instituted by former city manager Rashad Young during fiscal year 2010-11.  Interim city manager Denise Turner Roth continues to use this effective management and planning tool. MAP measures various result areas in city departments including the Human Relations Department.  As part of this process, volunteer hours and dollar amount of volunteer time is included in the plan.  The City’s Human Relations Department assigns a dollar amount of $80 per skilled volunteer hour, which includes the time spent in the program by conciliators and mediators.  In the initial startup phase of the program (fiscal year 2009-10), these variables were not measured.  With the advent of MAP, the variables have been included and tracked to more accurately measure some of the outcomes of the GLTDP.  Since the program began tracking this data (fiscal year 2010-11) through January 2012, conciliators and/or mediators have provided the GLTDP and Human Relations Department with 336.25 skilled volunteer hours equating to $26,900 in dollar value to the City of Greensboro.

When stakeholders were asked to outline the strengths of the program, City staff were mentioned by name and the relationship with the City was prominently mentioned by many participants in the phase two evaluation. When asked to discuss the obstacles in the program, funding and staffing were mentioned by more than half of the stakeholders. It seems that finding adequate funding, some of which may be able to come from City budget or leveraging existing relationships between the City and other funding sources, could present a solution.

The partnership has also resulted in several opportunities for media outreach. In addition to several local news segments when the program initially launched,[xviii] Hayes, Witty, and volunteer conciliators and mediators working in the GLTDP program staffed a landlord tenant phone bank during the Good Morning Show on WFMY 2,[xix] a local television station;  Nunn appeared on the Good Morning Show on WFMY 2 and a local talk show with WLXI Channel 61.

Contributions to student learning and professional development

UNCG’s Master’s program in Conflict and Peace Studies is committed to providing students opportunities to apply theory to practice by engaging in community based learning. The students involved in the GLTDP have been the most significant asset to the development of the Greensboro Landlord Tenant Dispute Program. In addition to ensuring its very existence through their work as volunteer conciliators and in the program coordinator position, the phase two program evaluation data demonstrated a high level of tangible benefits for students involved in the program.  One student clearly articulated the importance of the connections among students, faculty, City staff, and clients.

I like the experience I am getting by working with the landlords and tenants and the professors and students involved in the program…the support and the debriefing I receive from everyone involved has been valuable for me as a student who will be mediating in the future.

The previous quote also refers to several developments by UNCG Conflict and Peace Studies faculty that have occurred as a response to the need to recruit and better train student volunteers including: (1) co-creating GLTDP training materials; (2) the development of a mentorship scheme; (3) the creation of two credit-bearing graduate courses; and (4) a concentration in the master’s degree program focused on conflict practice.  Each of these developments recognized the importance of additional academic and professional development incentives for students and volunteers since it has not been possible to provide monetary compensation.

Attending and developing trainings and creating training materials are important professional skills for graduate level conflict resolution professionals.  Involvement in this program has allowed students the opportunity to undertake additional training from experienced landlord tenant attorneys and Fair Housing professionals. They have also taken the knowledge learned as conciliators and created the materials the GLTDP uses to train future conciliators. Likewise, the mentorship scheme paired new conciliators with experienced conciliators. This mentorship system allows new conciliators access to an experienced student, alumni, or community volunteer to ask questions and guide them through the process of their first few cases.

In response to the opportunities in GLTDP, UNCG faculty created two new courses in which students’ work in the program receiving academic credit towards their degree (CPS 605 – Skills and Techniques of Conflict Resolution; CPS 650 – Conflict Practice), in addition to existing courses that integrate practical skills into academic learning (CPS 690 – Integrated Colloquium). These opportunities provide more direct faculty-student contact, active reflection, and integration with course readings. The credit-bearing courses (CPS 605 & 650) are both focused on practice designed to allow students to gain supervised practice experience working in the program.

The students’ response to working in the program has demonstrated both commitment and positive learning.

It is very rewarding for me to be able to assist tenants and landlords work out their differences. As a graduate student in UNCG’s Conflict and Peace Studies program, LTDP has enabled me to gain practical experience and apply the theoretical knowledge that I am learning in the program.

Integrating student learning and professional development into this program will continue to be critical to its success.

Connections to dispute resolution theory and research

The entire program creation and evaluation process was designed within a paradigm of community engaged research and practice in conflict and peace studies[xx]  that intentionally included the planning-evaluation cycle[xxi], community based research, and academic service learning[xxii]. The community engaged design (See Figure 4)  was intended to allow for the program to remain responsive to the needs and goals of the multiple stakeholders in the process, which included: (1) developing and maintain a responsive program to  resolve disputes between tenants and landlords; (2) demonstrating the impact of the HRD on human relations in Greensboro; (3) providing hands-on professional training for graduate students in Conflict and Peace Studies; and (4) creating opportunities to share research on best practices in the development and maintenance of dispute resolution programs within the field of conflict and peace studies.

Figure 4 – Community Engagement in Peace and Conflict Studies [xxiii]

The mechanism for making this engaged system work was the early development of the responsive data collection system. The student and community volunteers were the first to report the low uptake of mediation in favor of telephone conciliation, which was then easily supported by the aggregate data. This “discovery” then resulted in some additional meetings, trainings, and a project-wide revision. Understanding these developments had implications for recruiting and training volunteer mediators and students to operate in the program.

The process also demonstrated that looking at dispute resolution more broadly than just the mediation process can have an important impact on the real issues. Telephone conciliation’s asynchronous nature supports working conciliators, conciliators and landlords who may live outside of Greensboro, and also speeds up the dispute resolution process. Setting up a face-to-face mediation can take five to six weeks to arrange, court hearings can take thirteen to fourteen weeks to schedule, but GLTDP’s longest telephone conciliation took only six hours over a month long period to resolve.[xxiv]

Further investigation discovered that GLTDP was not the only program using such a model and similar telephone conciliation programs have been created around the world. The Marquette Foreclosure Mediation Program in Milwaukee, Wisconsin and others like it have been launched in over fifteen states since 2007 [xxv] Swift, the New Zealand Government’s dedicated telephone mediation service for landlords and tenants[xxvi] launched in 2006. As the GLTDP continues to develop, the team will continue to integrate other forms of dispute resolution as possible avenues for working with clients, disseminating results in academic and professional circles, and develop trainings and workshops to share this model with colleagues in the field.

Lessons Learned

A key element behind the success of this program so far has been the dedication of the individuals involved. Start-up dispute resolution programs, especially those that rely on volunteers, tend to have significant initial difficulties and steep learning curves. However, similar dispute resolution and mediation programs seem to go through similar stages of development and encounter similar road blocks.[xxvii] Knowing this information then anticipating, normalizing, and working through situations by carefully selecting, training, and supporting/coaching all the team members was crucial. This was done and will continue to be an important part of the future of the program. It cannot be stated strongly enough that if it were not for the dedication of the graduate student volunteers, this program would not have the successes it has already demonstrated.

The GLTDP team has learned a few important lessons during the process of developing and evaluating the program, which may benefit students, practitioners, researchers, and program developers. These are shared below.

1. Partners are allies – Partnership programs work best when everyone is engaged and fully participating at each stage in the process. If questions or concerns arise, it is better to work together since everyone is interested in the success of the program.
2. Invite the stakeholders early – Inviting stakeholders to help contribute with ideas, comments, and questions in the initial stages of the process may save time later. Nothing is more likely to derail a program than a key community stakeholder feeling slighted. A surprised conciliator noted, “at least half of the ‘landlords’ that I speak to are property managers.” This was not news to the program, and provisions had already been made to allow property managers to negotiate as full participants in the conciliation or mediation process.
3. Know community resources – Related to the point above, meetings and discussions with the stakeholders early was key to clarifying the goals of the new program, and listening to the existing concerns in the community. Since many calls ultimately involve information about referrals, hearing these resources and developing a list was important. Non-profit and government agencies have been essential. This also helped clarify the boundaries of the program. While GLTDP extends only to residents in the city limits, knowing something about resources in the county or neighboring areas is also helpful.
4. Anticipate community needs – As the third largest city in North Carolina and a designated refugee resettlement city, the City of Greensboro is home to many nationalities, languages, and cultural backgrounds. GLTDP ensured that a Spanish-speaking translator would be available, has added a French-speaking conciliator, and encourages students with multiple languages to consider volunteering. Having these individuals as resources early on prevents further complications when a non-English-speaking caller reaches out to GLTDP.
5. Careful selection, training, and ongoing communication with volunteers – Using the graduate students who already had some knowledge of dispute resolution strategies, techniques, and interventions was intentional. Their basic knowledge and ability to be self-reflective allowed them to function more independently and encouraged them to be innovative in the work. As noted above, listening to conciliator feedback and suggestions led to several positive changes in the program. In addition, several conciliators in GLTDP developed their own script/outline for calls as an aide memoiré. This script was shared among the conciliators, which they peer reviewed and edited, and has become an integral training resource. Many past student conciliators continued to be involved in the program as alumni volunteer conciliators, mentors, and trainers.
6. Integrate technology appropriately – The use of the telephone and cloud-based technology has allowed a great deal of both flexibility and accountability for volunteer conciliators. Conciliators have the flexibility to return calls on their own time rather than sitting in a cubicle waiting for a phone to ring during business hours. This flexibility means that a wider range of individuals can be involved as active members of the program than in traditional clinic settings, including working parents, distance students, and even a former conciliator who moved to another state. It is important to monitor the level of client access to program staff via technology. With the intention of giving callers the greatest access possible to services, GLTDP conciliators have at times opened so many lines of communication (voicemail, direct line to coordinator, direct line to City of Greensboro Human Relations, and direct line to conciliators) that it has occasionally caused communication overlap and required disentangling all these lines. Technology has also allowed (a) conciliators to look up addresses to confirm city residency; (b) faster delivery of information brochures, community resources, and more follow up options if clients can provide email addresses; (3) instantaneous data entry and analysis for UNCG faculty and HRD staff.

Conclusions and Implications

The Greensboro Landlord Tenant Dispute Program (GLTDP) was designed through a multi-party stakeholder process two years in planning before the launch. The primary goals of creating the program were to impartially resolve disputes and improve the relationship between tenants and landlords contacting the program. The larger goals have been to serve as a first point of contact for clients for referrals to community based resources, which ultimately would better educate the public about housing and their rights under North Carolina Landlord-Tenant Laws.

Results from the first two years of the program have been encouraging and illustrate the potential for effective community engagement and collaboration between university programs and local communities in identifying local needs and interests, strengthening community outreach, local government responsiveness and involvement on the part of local governments, active contributions by faculty and students in community issues, and joint civic initiatives and programs than foster greater citizen participation and input into local government. GLTDP has permeated into the organizational fabric of both UNCG and the City of Greensboro. Volunteers are staying on after graduation from UNCG, which works to transcend the traditional divide between University and community building stronger ties between conciliators and their community. The program may ultimately also raise questions and open new dialogue with the city government about the nature of governance and effective responsiveness to citizens in relation to city policy, responsibilities, and the need for more open forums.

Irrespective of the future directions, resolutions are being reached by providing clients with access to knowledgeable, listening individuals, who are focused on managing and resolving disputes, and willing to use a full range of strategies and techniques including information and community resource networks. While this work may not be recognizable as a mediation program, it is certainly serving a purpose in resolving disputes between tenants and landlords in Greensboro and expanding the openness of city government.

- Sherrill W. Hayes, Ph.D., Jessica Roberts, Robert Nunn, MPA., Cathie Witty, Ph.D.[i]

This Article is available in PDF form here for downloading.

“There must be some kind of way out of here,

 Said the Joker to the Thief;

 There’s too much confusion.

  I can’t get no relief.” [ii]

Jimi Hendrix’s rock classic, “All Along the Watchtower” serves as an apropo prelude to examining the efficacy of S.C. Code Section 15-79-125, a section designed to provide relief through early resolution of medical negligence actions, but which actually has been ineffective and has contributed additional complexity, confusion, and expense to the litigation process in the majority of cases.

Approved in April 2005 and effective for claims arising on or after July 1, 2005, the South Carolina Noneconomic Damages Awards Act of 2005 contains provisions limiting jury awards for pain-and-suffering and other non-economic damages in professional negligence cases.[iii] The Act governs not only awards for non-economic damages but also the procedures by which actions for professional negligence are pursued. Section 15-36-100 provides the procedure, generally, for negligence actions against professionals arising out of the provision of their services. “Professionals” as defined by this section include healthcare providers, such as physicians, osteopaths, nurses, physical therapists, and the like, as well as other professionals such as attorneys, architects, certified public accountants, engineers, and land surveyors.[iv] When pursuing an action against one of these professionals, a plaintiff must file, along with the summons and complaint, an affidavit of an expert in the same field as the professional defendant, which specifies at least one deviation on the part of the defendant from the standard of care employed by reasonable professionals in the same field.[v]

Section 15-36-100 provides that its requirements apply to all cases “except as provided by Section 15-79-125.”[vi] This latter section carves out actions against medical professionals and adds to the requirements of Section 15-36-100. In cases against medical professionals, a prospective plaintiff must, prior to filing a summons and complaint, file with the clerk of court in a county in which venue would be appropriate for the underlying negligence action, a Notice of Intent to File Suit, which sets forth: (1) a concise factual background of the claim; (2) responses to S.C.R.C.P. 33 interrogatories; and (3) the expert witness affidavit required by Section 15-36-100.[vii] The section also permits the plaintiff’s medical records to be subpoenaed and reviewed by defendants.

Section 15-79-125 goes on to require the following:

Within 90 days, and no later than 120 days from the filing of the Notice of Intent, the parties shall participate in a mediation conference . . . . Unless inconsistent with this section, the Circuit Court Alternative Dispute Resolution Rules in effect at the time of the mediation conference for all or a part of the State shall govern the mediation process.[viii]

S.C. Alternative Dispute Resolution Rule 6(b) prescribes who must attend mediation conferences. The conference must be attended by the mediator, the individual parties, an officer, director, or employee of a corporate party who has full authority to settle the case, a representative of any governmental entity having authority to negotiate for the entity, the attorneys for the parties, and a representative of any insured party against whom a claim is asserted.[ix]

The rules make clear that in cases involving claims against doctors and other medical professionals, the medical professional, as well as any representative of any professional malpractice insurer, must be present at the conference along with the claimant, claimant’s attorney, and the mediator.[x]

Since 2005, parties to medical negligence cases have been subject to mandatory pre-suit disclosures of plaintiffs’ witnesses, expert testimony, and medical histories, and a mandatory mediation conference to be attended by all decision-makers involved in the case, including the doctors and medical professionals.[xi] Presumably, if the effect of this statute were as intended, a number of medical negligence claims should be getting resolved prior to the filing of a summons and complaint. In reality, a sampling of filings from clerk of court offices for a larger and a smaller county as well as extensive anecdotal information from members of the plaintiff bar, defense bar, and mediators reflects that with the exception of claims against nursing home facilities, the pre-suit mediation process has been largely ineffective in resolving disputes but, in conjunction with the broader provisions of the Noneconomic Damages Awards Act requirements, has contributed additional expense, time, and confusion to medical negligence litigation.

Clerk Filings

In the twenty-four month (24) period between January 1, 2010 and December 31, 2011, seventy-six (76) prospective plaintiffs in Greenville County filed Notices-of-Intent pursuant to Section 15-79-125. During that same period of time, sixty-seven (67) lawsuits were filed against medical providers.

In the final analysis, the legal system should foster the efficient and just resolution of disputes. Anything less contributes to a loss of confidence in the system. Legislation in the medical negligence area must take into account the competing interests of access to justice on the part of plaintiffs in medical negligence cases on the one hand, and the public interest in having capable and affordable health care on the other. Effective mediation that empowers the parties to determine the outcome of their dispute serves both of these laudable goals. However, ineffective mediation that creates expense, wastes time, and causes frustration serves neither.

The law governing mediation in medical negligence cases needs to be reformed so that, unlike the joker and thief in Jimi Hendrix’s rock ballad, litigants, courts, and the public can have confidence that our system of justice provides sensible, efficient relief from conflict, rather than consternation and confusion.

- L. Lee Plumblee, J.D.[i]

Introduction

Since the first algebra course was taught, algebra teachers have told their students to “show your work.” Heeding algebra teachers’ instruction would solve an issue currently the subject of a 4-2 split in the United States Circuit Court of Appeals. The Circuits are split over whether a district court should stay proceedings on the merits pending an appeal of the district court’s denial to compel arbitration under the Federal Arbitration Act (“FAA”).[i]

The FAA allows litigants seeking to enforce written arbitration agreements to file a motion to compel arbitration.[ii] Section 16 allows litigants to seek interlocutory appeal of denials to compel arbitration.[iii] The point of contention is apparent when a party seeks appeal from such a denial, because Congress failed to include a provision instructing the district court whether to continue with or stay the proceedings on the merits.[iv]

When handling the issue, the circuits have struggled to find the answer in existing law.[v] The circuits’ struggle is due to a failure to perform every step of the analysis.[vi] Four circuits held the district court is divested of jurisdiction upon the filing of a non-frivolous appeal and must stay the proceedings on the merits.[vii] However, Supreme Court precedent makes clear the district court is not divested of jurisdiction.[viii] Two circuits held the district court has discretion regarding whether to stay the proceedings pending appeal.[ix] However, the two circuits failed to show all their work in reaching the conclusion by neglecting to guide the district court’s stay analysis.[x] If the circuits analyzed the history of the FAA and Supreme Court precedent, the circuits would discover the law requires the district courts to assess whether to grant a stay on a case by case basis.[xi] Although two Circuits and many commentators have stated the district courts must determine whether to grant a stay on a case by case basis[xii], neither the Circuits nor the commentators have based their conclusion in existing law.[xiii] Additionally, the stay analysis required under existing law accounts for all the policy concerns raised by courts and commentators.[xiv]

The goal of this article is to provide the Fourth Circuit with the information needed to render an opinion which reflects existing law and provide district courts with guidance regarding the proper stay analysis. By implementing the analysis suggested in this article, the Fourth Circuit will render an opinion applying the existing law governing stays pending § 16 appeals, rather than engaging in judicial activism.[xv] Additionally, the proper analysis of the issue will guide the district courts to the stay analysis which appropriately addresses each of the policy concerns expressed by the Circuits and commentators.[xvi]

To show all their work, the court must begin the analysis by discerning the current state of the law. Then, the current version of the FAA should be analyzed. In analyzing the FAA, however, the courts and commentators have recognized the text of the FAA does not provide the answer.[xvii] Therefore, the history of the FAA and relevant Supreme Court precedent should be analyzed to discern Congressional intent on the matter. After looking back to the enactment of the FAA in 1925, the court will find Congress did not intend to divest the district court of jurisdiction when a litigant files a 9 U.S.C. § 16 appeal.[xviii] Furthermore, the court will find Congress intended courts to assess whether to grant a stay pending § 16 appeals pursuant to the Supreme Court’s holding in Landis v. North American Co.[xix]

Current State of the Law

To date, six circuits have attempted to answer this question.[xx] The six Circuits are split. Two circuits held the district court has discretion to grant a stay and four circuits held a stay of the district court’s proceedings is presumptively granted.[xxi] The Second Circuit in Motorola Credit Corp. v. Uzan[xxii] and Ninth Circuit in Britton v. Co Op Banking Group[xxiii] held the district court had authority to determine whether the proceedings should be stayed.[xxiv]  In Britton, the Ninth Circuit held the district court has discretion regarding whether to grant a stay pending appeal.[xxv]

However, four circuits have held that a stay of the district court proceedings should be presumptively granted upon appeal because the appeal divests the district court of jurisdiction.[xxvi] The first circuit to hold the district court was divested of jurisdiction upon appeal was the Seventh Circuit in Bradford-Scott Data Corp., Inc. v. Physicians Computer Network, Inc.[xxvii] The Third, Tenth, and Eleventh Circuits followed the Bradford-Scott approach in Ehleiter v. Grapetree Shores, Inc.[xxviii], McCauley v. Halliburton Energy Services, Inc.[xxix], and Blinco v. Green Tree Servicing, LLC[xxx], respectively.

1. The Approach of Circuits Holding Whether to Grant a Stay is within the Discretion of the District Court.

Although the Second and Ninth Circuits were presented with the argument the district court was divested upon appeal,[xxxi] the courts held the district courts had discretion to determine whether to grant a stay of the proceedings.[xxxii] While both circuits were correct, neither based its conclusion in existing law, nor did they provide guidance for the district courts’ exercise of the discretion. The Second and Ninth Circuits were unable to base the conclusion in the law and provide adequate instruction to the district court because the courts failed to “show all the work.”

In Britton, the court relied solely on secondary resources to support its conclusion.[xxxiii] To rebut the defendant’s reliance on Griggs v. Provident Consumer Discount Co.[xxxiv] for the argument that the district court is divested of jurisdiction, the court relied on Moore’s Federal Practice and the Manual for Complex Litigation.[xxxv] The court relegated the only citation of case law to a footnote.[xxxvi] In the footnote, the court cited Moses H. Cone Memorial Hospitial v. Mecury Construction Corp.[xxxvii] The Supreme Court in Moses stated, the issue of arbitrability “is easily severable from the merits of the underlying disputes.”[xxxviii] Instead of relegating Moses to a footnote,[xxxix] the court should have based its conclusion in existing law by relying on the Supreme Court’s precedent in Moses. In addition to failing to base its conclusion in the law, the Ninth Circuit failed to review the history of the FAA and § 16.

Furthermore, the Ninth Circuit failed to provide adequate instruction for the district courts when the courts are determining whether to grant a stay. One commentator contends the Ninth Circuit suggested the “district courts may decide to stay litigation pending a § 16 appeal if the claim for arbitration . . . ‘presents a substantial question.’”[xl] However, the court did not suggest that this standard should be the exclusive test, nor did the court require the district court to apply the standard.[xli]

The court simply suggested that whether the motion to compel presents a substantial question may be a factor the district court should consider.[xlii] For this proposition, the court cited two cases.[xliii] The first was Pearce v. E.F. Hutton Group, Inc.[xliv] where the district court granted a stay because the movant’s claim of arbitrability raised issues of first impression and the movant would suffer substantial harm if the proceedings were not stayed.[xlv] The second case was C.B.S. Employees Federal Credit Union v. Donaldson.[xlvi] In Donaldson, the district court concluded a stay of the proceedings pending appeal was warranted by applying the four factor test delineated in Hilton v. Braunskill.[xlvii] The district court in Donaldson reasoned that since the FAA provided no direction for whether a stay of the litigation pending a § 16 appeal should be granted, “general standards governing stays of proceedings under Rule 62 of the Federal Rules of Civil Procedure apply.”[xlviii] The four factors delineated in Hilton are:

(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits, (2) whether the applicant will be irreparably injured absent a stay, (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding, and (4) where the public interest lies.[xlix]

District courts should certainly apply the Hilton factors in substance;[l] however, to state the law directs district courts to apply the Hilton factors exclusively is misplaced. Application of the Hilton factors addresses the main policy concern expressed by the Ninth Circuit. The Ninth Circuit placed emphasis on not providing incentives for litigants to file frivolous appeals.[li] The court expressed concerned that a presumptive or automatic stay would incentivize litigants, attempting to unduly delay trial, to file frivolous appeals.[lii] Factor (1) allows the district court to assess whether the appeal is frivolous. If the movant does not show that he is likely to succeed on appeal, the district court likely will not stay the proceedings. By not staying the proceedings, litigants are not incentivized to file frivolous appeals.[liii]

Nevertheless, the law does not direct district courts to apply the Hilton factors when the district courts are considering whether to stay proceedings pending appeal.[liv] The Court in Hilton interpreted the application of Fed. R. Civ. P. 62.[lv] Rule 62 provides the standards by which district courts may stay the enforcement of judgments.[lvi] A district court has not rendered a judgment when a party appeals a district court’s denial of a motion to compel arbitration. At the moment a motion to compel arbitration is appealed, the district court has not rendered a judgment, because the district court has not adjudicated the merits of the case. Therefore, Rule 62 does not apply when a district court is deciding whether to stay the proceedings pending appeal. Consequently, the law does not direct district courts to apply the Hilton factors.

The Second Circuit’s decision in Motorola suffers the same flaws as the Ninth Circuit’s Britton decision. The Second Circuit simply adopted the reasoning from Britton.[lvii] Although the court did briefly review the current state of the law, the only support the Second Circuit provided was agreement with the approach in Britton and a previously decided Second Circuit case in which the court refused to stay district court proceedings pending appeal.[lviii]

Despite the Ninth and Second Circuits’ failure to base their holdings in existing law and properly guide district courts, the courts set out the principles governing whether the district court should stay the proceedings pending appeal.[lix] Although the Ninth Circuit primarily cited non-binding authority, the court recognized the issue of arbitrability is severable from the merits of the underlying disputes.[lx] Moreover, the court referred the district courts to many of the considerations the courts should consider when determining whether to grant a stay.[lxi] However, the court merely cited cases to direct the district court rather than providing instruction to clarify the stay analysis.[lxii]

The Ninth and Second Circuits’ deficiencies are attributable to the courts’ failure to “show the courts’ work.” The Ninth Circuit skipped several steps in the analysis. The court failed to discern the current state of the law. The court’s failure to discern the current state of the law is attributable to the court’s failure to analyze the history of the FAA and the relevant Supreme Court precedent. The Ninth Circuit’s failure to analyze the history of the FAA and the Supreme Court’s precedent fatally hindered the court’s ability to discern Congressional intent on the matter. The Second Circuit adopted the flaws of the Ninth Circuits reasoning when the Second Circuit expressed approval of the Britton approach.

2.  The Approach of Circuits Holding a Stay Should Be Presumptively Granted

The approach of the Circuits holding a stay should be presumptively granted is based on the common law doctrine of divestiture.[lxiii] The divestiture doctrine was announced in Griggs.[lxiv] Griggs stated, “[t]he filing of a notice of appeal is an event of jurisdictional significance- it confers jurisdiction on the court of appeals and divests the district court of its control over the aspects of the case involved in the appeal.”[lxv] Principally, the Circuits holding a stay should be presumptively granted have focused on the phrase “aspects of the case involved in the appeal.”[lxvi] The Circuits concluded the issue of whether a district court may proceed on the merits “is the mirror image of the question [of arbitrability] on appeal.”[lxvii] Because the issue of continued litigation is the mirror image of the question on appeal, as the Circuits asserted, proceeding on the merits is necessarily an aspect of the case involved in the appeal and the district court is divested of jurisdiction.[lxviii] The presumption a stay will be granted may be overcome by establishing the appeal is frivolous.[lxix]

However, the presumptive stay approach ignores additional Supreme Court precedent on the issue. While courts should follow the Griggs decision where applicable, the Supreme Court in Moses explicitly removed appeals of arbitrability from the scope of the Griggs decision.[lxx] In Moses, the court stated the issue of arbitrability is not involved in the merits of the underlying dispute.[lxxi] Therefore, the Third, Seventh, Tenth, and Eleventh’s contention the district court is divested of jurisdiction upon the filing of an appeal is misplaced.

In addition to the Circuits’ reliance on the divestiture doctrine, the courts stated two prudential concerns warranted a presumptive stay.[lxxii] First, the Circuits stated the interest in protecting the right of parties to an arbitration agreement not to be subjected to litigation warrants staying the district court proceedings pending appeal.[lxxiii] In Bradford-Scott, the Seventh Circuit stated “arbitration clauses reflect the parties’ preference for non-judicial dispute resolution, which may be faster and cheaper.”[lxxiv] The Seventh Circuit further stated, the benefits of arbitration are “eroded” and “may be lost entirely” if parties are forced “to proceed in both judicial and arbitral forums.”[lxxv] However, as one commentator noted, this position presupposes the parties have agreed to arbitrate.[lxxvi] At the point the issue of arbitrability is appealed, whether the parties have agreed to arbitrate is not clear.[lxxvii] The issue of arbitrability will be decided by the court of appeals. Additionally, presupposing the parties agreed to arbitrate lacks statistical support. Statistics show nearly 50% of appeals of denials to compel arbitration were reversed.[lxxviii] Thus, presupposing the parties have agreed to arbitrate is an overly narrow approach.

Second, the Circuits expressed a general concern for ensuring efficient proceedings in the judicial system.[lxxix] The Seventh Circuit in Bradford-Scott reasoned that allowing the proceedings to go forward in the district court would combine the costs of litigation with arbitration resulting in unnecessary duplicative proceedings.[lxxx] Again, the Seventh Circuit presupposed the parties had agreed to arbitrate[lxxxi], and the Court of Appeals would order the parties to submit to arbitration. The presupposition ignores the possibility the court of appeals will require the parties to proceed on the merits in the district court. The approach incentivizes parties to file frivolous appeals to stall proceeding on the merits. The Circuits requiring a presumptive stay reasoned the district court or the court of appeals may review the appeal and dismiss it as frivolous.[lxxxii] The Tenth Circuit explicitly requires district courts to hold a hearing to determine if the appeal is frivolous.[lxxxiii]  However, to require the district court to take additional steps in determining the frivolity of an appeal seems antithetical in light of the Third, Seventh, Tenth, and Eleventh Circuits prudential concern for efficiency.

The Third, Seventh, Tenth, and Eleventh Circuits failed to delineate an approach that respects valid Supreme Court precedent and properly addresses all the policy concerns relevant to assessing whether the district court’s proceedings should be stayed pending appeal. The Circuits’ failure to give credence to the Supreme Court’s statement in Moses doomed the Circuits’ analysis from the outset. Failing to heed the statement in Moses led the Circuits to reach a conclusion not based in existing law. Furthermore, the Circuits’ reliance on analysis of the prudential concerns is overly narrow. The overly narrow approach neglects to consider the possibility the court of appeals will affirm the lower court, requiring the parties to proceed on the merits in the district court and forces district courts to take additional steps that result in inefficiencies.

The six Circuits which opined on the issue need to analyze the history of the FAA and the relevant Supreme Court precedent to discover the law on the issue. Analyzing the FAA and Supreme Court precedent will manifest Congressional and Supreme Court intent to allow district courts to determine whether to stay proceedings pending appeal and provide district courts with instruction for making the decision.[lxxxiv]

The Federal Arbitration Act

Analyzing the plain meaning of the statute yields the conclusion Congress did not address whether the district court proceedings should be stayed pending appeal.[lxxxv] The application of one canon of statutory interpretation seems to yield the conclusion that Congress did not intend for district courts to presumptively stay proceedings pending appeal.[lxxxvi] Conversely, courts are allowed to look to the purposes and policy concerns underlying the statute to determine what Congress intended.[lxxxvii] The purposes and policy concerns underlying the FAA seem to lead to the conclusion the district court should grant an automatic stay regardless of the divesture principle.[lxxxviii] Additionally, an attempt to discern Congressional intent solely from legislative enactments leads to contradictory signals from Congress.[lxxxix]

1. Interpreting the Text of the FAA

As the Fourth Circuit stated, “we turn first to the plain language of the statute to determine its meaning.”[xc] Under the FAA, a party to a written arbitration agreement may file a motion to compel arbitration in any federal district court[xci] for another party’s alleged “failure, neglect, or refusal” to arbitrate in accordance with the written agreement.[xcii] If the motion to compel arbitration is granted, 9 U.S.C. § 3 requires the court to stay the proceedings in the district court.[xciii] However, Congress did not provide a provision ordering a stay of proceedings in the district court when a motion to compel arbitration is denied.[xciv] Yet, Congress gave parties the right to an interlocutory appeal from a denial of a motion to compel arbitration. [xcv] When Congress granted interlocutory appeal status, Congress indicated the arbitrability of the case needs to be decided before the conclusion of the district court proceedings. Thus, courts are left with Congress giving indication in both directions without direct instruction as to whether a stay should be granted.

Despite Congress’s double talk on the issue, courts should attempt to find resolution within the framework Congress has given. Courts are often able to discern answers to questions of law through application of canons of statutory interpretation. However, even application of canons of statutory interpretation to the FAA fail to render a definitive answer. Section 3 requires the district court to grant a stay after granting a motion to compel arbitration;[xcvi] however, a dependent clause[xcvii] confines the court’s obligation to when the court grants a motion to compel arbitration.[xcviii] Notably, the language does not prohibit granting a stay in the alternative, which, under an expressio unius interpretation, indicates that Congress intended for current procedures for determining whether to stay proceedings pending an interlocutory appeal to apply.[xcix]

An expressio unius interpretation of the FAA indicates Congress did not intend to grant a stay automatically when a party appeals a denial of a motion to compel arbitration. The expressio unius canon of statutory interpretation declares, “to express or include one thing implies the exclusion of the other, or of the alternative.”[c] Under this approach, when Congress included § 3 granting a stay when the district court grants a motion to compel arbitration, it impliedly legislated that courts are not required to grant a stay of proceedings when the denial of a motion to compel arbitration is on appeal. Therefore, application of the expresio unius canon leads to the conclusion that Congress did not see fit to legislate specially for this issue and approved of the existing procedures.

The law’s general disdain for granting stays pending appeal gives further credence to the proposition that Congress did not intend to require a presumptive stay.[ci]  For example, 11 U.S.C. § 362 grants a presumptive stay under particular circumstances enunciated in the statute. Clearly, Congress has the knowledge and ability to include a provision granting a presumptive stay if it intends too.

Thus, the conclusion that follows from the text alone is that Congress did not intend to grant a presumptive stay. Had Congress intended such a result, it would have included a stay provision in the FAA. However, the purposes of the FAA and public policy principles underlying the statute seem to lead the court to an interpretation under which a stay is presumptively granted.

2.   Interpreting the FAA in Light of the Statute’s Purposes and Public Policy

Courts frequently take into consideration the purposes of statutes and public policy considerations when deducing the meaning of a statute.[cii] Most notably, the Supreme Court stated in Holy Trinity that courts should consider the spirit of the statute when interpreting it.[ciii]

The purposes of the FAA are to place arbitration clauses on the same grounds with other contractual provisions and create a federal scheme favorable of the enforcement of arbitration clauses. [civ] A favorable scheme for enforcement of arbitration clauses allows the judicial system and parties to benefit from the advantages of arbitration.[cv] The primary advantage of arbitration is resource conservation in terms of time and money.[cvi] Initial consideration of these concerns indicates the court should presumptively grant a stay. Presumptively granting a stay is the only way to ensure the parties’ right to arbitrate is fully protected and seems to prevent the district court from wastefully moving forward with litigation.

However, even interpreting the FAA in light of these purposes and policies does not yield a clear result. At the outset of a case, a district court has no foundation to decide whether granting a stay will conserve or waste resources. To accurately predict whether resources will be conserved, the court must know the outcome of the appeal. For example, if the district court refuses to stay the proceedings pending appeal and the court of appeals requires the parties to submit to arbitration, time and money were wasted in the district court proceedings.[cvii] Alternatively, when the court of appeals upholds the district court’s refusal to compel arbitration, granting a stay pending appeal unnecessarily stalls the litigation and allows parties to file frivolous appeals. Unnecessarily stalling litigation and adjudicating frivolous appeals may be as costly as unnecessarily proceeding in the district court. Regardless, erosion of the benefits of arbitration is possible whether a stay is granted or the district court proceeds on the merits.

Arguably, the statute’s preference for arbitration instructs courts to stay the proceedings to preserve the parties’ right to determination by the arbitration panel. However, to read the preference into the statute would be to read in a principle that Congressionally enacted procedural law and Supreme Court precedent strongly disfavor.[cviii] Thus, neither an absolute rule granting a stay nor allowing the district court to proceed with adjudication of the merits appropriately addresses the purposes and policy concerns of the statute. Each case will require a factual determination regarding whether granting a stay will appropriately address the purposes and policy concerns of the FAA. Furthermore, whether the purposes and policy concerns were offended will not be conclusive until the court of appeals has ruled on the appeal.

Because the FAA itself gives no guidance regarding whether a stay of the district court proceedings should be granted, the courts must look at the relevant law regarding when a district may grant a stay pending appeal. Every Circuit rendering a decision on the issue has referenced law outside of the FAA.[cix] Although the Circuits seem to mention relevant principles, none of the Circuits have fully addressed all steps in the analysis. To show all the work necessary to reach a completely reasoned result, a court must continue the analysis by considering the legal history of the FAA. [cx]

History of the Relevant Law

When the FAA was enacted in 1925, it was reasonable to infer Congress believed interlocutory review of appeals from denials of motions to compel arbitration was not permitted. Although the seeds of the collateral order doctrine under 28 U.S.C. ­1292(b) were beginning to germinate,[cxi] it is unlikely the doctrine applied and doubtful Congress had knowledge of the budding doctrine.[cxii] Thus, the questions of whether the district court was divested of jurisdiction and whether the district court should stay the proceedings pending appeal did not exist. Whether the district court was divested of jurisdiction was not questioned primarily because parties could not seek appeal of the district court’s denial of a motion to compel arbitration until after final judgment was rendered. Furthermore, the Supreme Court did not recognize the district court’s inherent power to stay proceedings until the 1936 decision in Landis v. North American Co.[cxiii]

However, ten years after the enactment of the FAA, the Supreme Court, in Enelow v. New York Life Ins. Co., established a doctrine based on 28 U.S.C. § 1292(a)[cxiv] which allowed interlocutory review of denials of motions to compel arbitration.[cxv] The ability of such motions to receive interlocutory review was eliminated in 1988 when the Supreme Court overruled the Enelow-Ettleson doctrine.[cxvi] In reaction to the Supreme Court overruling the Enelow-Ettelson doctrine, Congress immediately enacted 9 U.S.C. § 16[cxvii] providing litigants the ability to receive interlocutory review of the district court’s denial. Throughout the evolution of the law regarding the ability of litigants to receive interlocutory review of appeals from denials of motions to compel arbitration, Congress never took action to express whether the district court is divested of jurisdiction or whether the district court should stay the proceedings pending appeal.[cxviii] Apparently, Congress was content with the method provided under the existing law for determining whether to stay the district court proceedings.[cxix]

1. Enactment of the Federal Arbitration Act

The original FAA did not include a provision allowing interlocutory review of any appeal.[cxx] Courts simply applied existing law to determine the procedures of the litigation. At the time the FAA was enacted, Title 28 and federal common law governed whether an appeal from a motion to compel arbitration was interlocutory. If the motion to compel arbitration was interlocutory under Title 28, Title 28 also governed whether the district court should stay the proceedings pending arbitration.[cxxi]

Originally, neither the FAA nor federal common law allowed interlocutory appeals from denials of motions to compel arbitration.[cxxii] Because 9 U.S.C. § 16 had not been enacted, the only potential methods of receiving interlocutory review of a district court’s denial of a motion to compel arbitration were under 28 U.S.C. §§ 1291 and 1292. Under § 1291, the court of appeals only has jurisdiction over final decisions of the district court.[cxxiii] “[A] decision is generally regarded as final when the decision of the district court ends the litigation on the merits and leaves nothing for the court to do but execute a judgment.” [cxxiv] Unless the only issue before the federal court is whether litigants must submit to arbitration pursuant to an arbitration agreement,[cxxv] the court’s denial of a motion to compel arbitration is not a decision that ends the litigation on the merits. The movant is simply seeking to have the merits decided in arbitration rather than trial in the district court. The merits of the case will be adjudicated only after the court determines whether the case is arbitriable. Therefore, litigants could not receive interlocutory review of denials of motions to compel under § 1291.

2.   Possible Applicability of the Budding Collateral Order Doctrine

Additionally, interlocutory appeal was unlikely under ­§ 1292. Under § 1292(b), interlocutory appeal from orders otherwise not final may be sought under what is now called the collateral order doctrine.[cxxvi] Although the Supreme Court allowed interlocutory appeals of some district court orders when the FAA was enacted, the case law was sparse and unclear as to applicability to appeals from denials of motions to compel arbitration.[cxxvii]The law regarding the applicability of the collateral order doctrine was so unclear when the FAA was enacted, it was not a doctrine at all.[cxxviii] Some scholars assert the principle of allowing interlocutory appeals under § 1292(b) did not exist until Cohen v. Beneficial Indus. Loan Corp.[cxxix] Furthermore, an independent analysis of the applicability of the collateral order doctrine Congress could reasonably assume the collateral order doctrine did not grant interlocutory review. Therefore, the courts may reasonably infer Congress assumed the collateral order doctrine did not apply to a district court’s denial of a motion to compel arbitration, and was unaware the collateral order doctrine even existed. Congress’s likely assumption was confirmed after the enactment of the FAA by many of the circuits’ interpretation of Cohen.

Although not called the collateral order doctrine, the Supreme Court allowed interlocutory review of orders otherwise not final as early as 1884.[cxxx] In 1884, the Supreme Court in Williams v. Morgan allowed interlocutory review of a decree issued by the district court.[cxxxi] The Court granted interlocutory appeal without sufficient reasoning to determine why the Court made an exception to the general rule of finality.[cxxxii] However, The Supreme Court announced the three part test for determining whether the collateral order doctrine granted interlocutory review in Cohen.[cxxxiii] The first element in the Cohen test is the district court’s order “must conclusively determine the disputed question.”[cxxxiv] Second, the order “must resolve an important issue separate from the merits of the underlying dispute.”[cxxxv] Lastly, the order “must be effectively unreviewable on appeal from a final judgment.”[cxxxvi]

The Supreme Court has not decided whether a district court’s denial of a motion to compel arbitration conclusively determines the matter. However, in Gulfstream, the Supreme Court held a district court’s denial of a motion to stay pending the outcome of state court proceedings did not conclusively determine the matter, thus the first requirement of the collateral order doctrine was not met.[cxxxvii] The Court reasoned that when the district court denies a motion to stay, the district court does not “necessarily contemplate” the decision will close the matter for all time.[cxxxviii] “In denying such a motion, the district court may well have determined only that it should await further developments before concluding that the balance of factors to be considered under [abstention] doctrine warrants a stay.”[cxxxix]

Gulfstream’s ruling is instructive because a denial of a motion to stay federal court proceedings pending the outcome of state court proceedings is synonymous to denials of motions to compel arbitration and accompanying motions to stay. In each situation, the federal court is refusing to yield its duty to adjudicate the issue before it, pending disposition in another locale. However, the federal court must consider many factors when the court refuses to stay its proceedings pending a state court determination.[cxl] The weight of the factors may change through the course of the litigation proceedings. Whereas, when a federal court refuses to yield its duty to adjudicate a case in lieu of arbitration, the federal district court is simply deciding whether the arbitration agreement exists and is applicable in the particular case. In the case where a district court is deciding whether to compel arbitration, the decision is a zero sum decision, meaning the contract either compels arbitration or it does not. The decision will not be altered through the course of the litigation. The only way the decision to compel or deny to compel may be altered is on appeal. Therefore, the conclusiveness requirement of the collateral order doctrine is likely met when a district court denies a party’s motion to compel arbitration.

The second requirement for immediate appeal of an interlocutory order is the order “must resolve an important issue completely separate from the merits.”[cxli] Whether the issue of arbitrability is completely separate from the merits is the point of focus for the circuits when assessing whether the district court is divested of jurisdiction upon the filing of an appeal.[cxlii] Most notably, the Supreme Court in Moses stated, the arbitrability dispute is “easily severable from the merits of underlying disputes.”[cxliii] The statement in Moses is debated in the circuits.[cxliv] However, the Supreme Court’s statement is unambiguous. The statement is further supported by Supreme Court precedent in Cohen. In Cohen, the Court stated, 28 U.S.C. § 1291[cxlv] does not permit interlocutory appeals, “even from fully consummated decisions, where they are but steps toward final judgment in which they merge.”[cxlvi] Therefore, the second requirement of the collateral order doctrine is likely met.

The final requirement that the order be effectively unreviewable on appeal from a final judgment is unclear. Some courts have stated the court of appeals could simply vacate the judgment rendered in the district court and order the parties to submit to arbitration. The courts assert the ability to vacate makes the interlocutory order reviewable after the disposition of the district court proceedings.[cxlvii] However, practically speaking, the court of appeals has no ability to “un-ring the bell.”[cxlviii] Thus, once the district court has rendered a decision, the parties now have a different view on the viability of their own case and their opponents’ cases. A change of view will cause the losing party to be more likely to settle the case. Allowing the district court to proceed essentially results in the district court deciding the case and deprives the parties of their right to arbitrate. Therefore, the third requirement of the collateral order doctrine may not be satisfied.

Although, the applicability to denials of motions to compel arbitration was unclear, the circuits confirmed the assumption that the collateral order doctrine did not allow for interlocutory appeal from denials of motions to compel arbitration.[cxlix] For example, the Fifth Circuit in Rauscher Pierce Refsnes, Inc. v. Birenbaum held that such a motion was not “unreviewable on appeal from a final judgment,” thus, the denial of the motion failed to invoke the collateral order doctrine.[cl]

Therefore, Congress could reasonably assume orders denying a motion to compel arbitration did not receive interlocutory review under the collateral order doctrine at the time Congress enacted the FAA.[cli] Because the collateral order doctrine likely did not apply, litigants were forced to wait until the conclusion of the adjudication of the merits to appeal the denial. Despite the many indications a district court’s denial of a motion to compel arbitration would not receive immediate appellate review, Congress did not include a provision allowing litigants to seek interlocutory appeal. Consequently, whether the district court was divested of jurisdiction or should grant a stay was irrelevant, because the district court did not have the opportunity to be divested or decide whether to grant a stay.

3.   Enelow-Ettelson Doctrine

Notably, for 10 years a denial of a motion to compel was not appealable until a final judgment was rendered in the case. However, the Supreme Court gave litigants the opportunity to seek interlocutory review of a denial of a motion to compel arbitration in 1935 with the Enelow decision.[clii] In Enelow, the court held certain orders that stay or refuse to stay judicial proceedings are considered injunctions, and therefore, are immediately appealable.[cliii] When Enelow was decided, the federal courts were still divided into law courts and equity courts.[cliv] The plaintiff in Enelow sued at law and the defendant answered with an equitable defense.[clv] The defendant subsequently moved to stay the trial at law pending the resolution of their equitable defense in the equity court.[clvi] The court of law granted the motion to stay and the plaintiff appealed seeking interlocutory review.[clvii]

The Court held the motion to stay proceedings in the court of law pending the resolution of the equitable defense was analogous to the equity court issuing an injunction upon the court of law’s proceedings.[clviii] Under this analogy, the order granting the motion to stay in the court of law was appealable immediately under § 1292(a)(1).[clix] The court distinguished a motion to stay proceedings in an action at law pending the resolution of matters at law and a motion to stay proceedings in an equitable action pending the resolution of equitable matters from orders that stay or refuse to stay judicial proceedings which are considered injunctions.[clx] In accordance with the distinction, the Court stated the former are not issuing injunctions, rather they are simply arranging matters on their own docket which they have the inherent power to perform.[clxi]

Litigants feared the holding in Enelow was repudiated by the enactment of the Federal Rules of Civil Procedure, because the Federal Rules of Civil Procedure eliminated the equity court-law court distinction.[clxii] However, the Supreme Court affirmed the Enelow principle in Ettleson v. Metropolitan Life Insurance, Co. and further clarified the two requirements for orders, not otherwise considered injunctions, to receive interlocutory review under § 1292(a)(1). [clxiii]  The two requirements of the Enelow-Ettelson doctrine were: 1) the action in which the order is entered must be an action that, before the merger of law and equity, was by its nature an action at law, and 2) the order must arise from or be based on some matter that would then have been considered an equitable defense or counterclaim.[clxiv]

Despite the new Enelow-Ettleson doctrine, it was still unclear that the doctrine would allow interlocutory appeal of a district court’s denial of a motion to compel arbitration. Under the first requirement, the claim to enforce an arbitration clause is a contractual dispute, because one party simply wants to enforce a provision of the contract. Additionally, the underlying disputes to be submitted to arbitration are typically based on the contract, thus the order determining the arbitrability and the action as a whole seems legal in nature.

Under the second requirement, litigants seeking invocation of the Enelow-Ettelson doctrine simply needed to cite the Supreme Court’s decision in Shanferoke Coal & Supply Corp. v. Westchester Serv. Corp.[clxv] In Shanferoke, the Court stated, “the special defense setting up the arbitration agreement is an equitable defense […] within the meaning of [§ 1292(a)(1)] and that the motion for a stay is an application for an interlocutory injunction based on the special defense.”[clxvi] Thus, the Supreme Court stated a motion to compel arbitration shall be treated as a motion for an injunction under § 1292(a)(1), because the FAA requires that a court’s grant of a motion to compel arbitration be accompanied, upon motion of a party, by a stay of the proceedings in the district court pending arbitration.

The Supreme Court gave Congress additional reason to believe the Enelow-Ettleson doctrine applied to motions to compel arbitration with its decision in Baltimore Contractors v. Bodinger.[clxvii] In Baltimore Contractors, the Court applied Enelow-Ettelson framework to a party’s motion to compel arbitration.[clxviii] The Court declared the underlying action was equitable because the action was for accounting; however, the analysis of the Court left the inference that had the underlying dispute been legal in nature, the order denying the party’s motion to compel arbitration would have received interlocutory review under § 1292(a)(1) by way of the Enelow-Ettleson doctrine.

Therefore, it is reasonable to believe that before the enactment of 9 U.S.C. § 16, Congress believed the Enelow-Ettleson doctrine applied. Regardless, Congress was content with the procedure by which courts were handling denials of motions to compel arbitration and their accompanying motions to stay pending appeal. The only changes to the procedure between the enactment of the FAA in 1925 and the enactment of § 16 in 1988 were made by the judiciary.

4.  Enelow-Ettelson Doctrine Overruled

The theory that Congress believed the Enelow-Ettelson doctrine applied to appeals from denials of motions to compel arbitration is more plausible when Congress’s action after the Supreme Court repudiated the doctrine in Gulfstream Aerospace Corp. v. Mayacamas Corp. is considered. The Gulfstream decision was released on March 22, 1988[clxix] and the § 16 grant of interlocutory appeal was enacted on November 19, 1988.[clxx] The assertion that the legislative process tends to be slow is so well known a citation to authority is unnecessary. Therefore, Congress’s quick action indicates § 16 was a reaction to the elimination of the Enelow-Ettleson doctrine.[clxxi] Such a reaction indicates Congress believed the doctrine should apply. Thus, Congress approved of the application of the Enelow-Ettleson doctrine, to include the procedure by which the district court determined whether to stay the proceedings pending interlocutory appeal. Additional credence is given to the theory Congress approved of the procedure which district courts determined whether to stay proceedings when § 16 was enacted by Congress’s exclusion of a provision instructing courts when to stay proceedings.

Therefore, the Supreme Court and Congress did not believe the district court was divested of jurisdiction upon appeal of a denial of a motion to compel arbitration. The method of determining whether to grant a stay pending appeal under the Enelow-Ettelson doctrine as established by Supreme Court precedent applied to the question of whether the district court should stay the proceedings pending appeal.

Basing the Fourth Circuit’s Conclusion in Existing Law

Congress, by omission, did not permit interlocutory appeals of denials of motions to compel arbitration for the first ten years of the FAA.[clxxii] Parties were only given the opportunity to receive interlocutory review of denials of motions to compel arbitration when the Supreme Court announced the Enelow-Ettleson doctrine.[clxxiii] When the Enelow-Ettleson doctrine was first announced, the nation’s district courts did not have express authority to stay their own proceedings.[clxxiv] Even after the Supreme Court recognized the district courts’ authority to stay their own proceedings, neither Congress nor the Supreme Court took action to establish a presumptive stay of district court proceedings.[clxxv]

Congress and the Supreme Court allowed the standard procedures for determining whether to stay the district courts’ proceedings pending appeal to govern appeals from denials of motions to compel arbitration.[clxxvi] The standard procedures for determining whether to stay the district court’s proceedings were announced in the Supreme Court’s decision in Landis v. North American Co.[clxxvii] The Court in Landis held the district court proceedings should presumptively not be stayed.[clxxviii] Under Landis, the district court is required to take into account the “hardship and inequity” suffered by the litigants;[clxxix] thus, the district court will be required to take into account the policies underlying the FAA and how those policies will best be served in the case before the court.[clxxx] Thus, to determine whether to stay proceedings, the Fourth Circuit should point district courts to the Supreme Court’s decision in Landis v. North American Co.

Some may assert Congress simply forgot to add a stay provision in the statute and courts should simply read the presumptive stay requirement into the statute. However, Congress did not forget to add a stay provision, because Congress did not intend for courts to presumptively grant a stay. Congress recognized the inadequacies of both presumptively granting a stay and proceeding on the merits. Thus, Congress attempted to reach a middle ground approach that promotes efficiency, respects the parties’ right to arbitrate or litigate before the district court, and conserves resources. However, Congress did not have to provide for the approach through legislation, because the approach already exists in law.

Instructing District Courts Regarding How to Determine Whether to Grant a Stay Pending Appeal

Application of Landis allows district courts to determine whether a stay pending appeal will serve the purposes and policies of the FAA. Landis gives district courts discretion to determine whether an appeal is frivolous, whether a stay will properly advance the purposes and policies of the FAA, and whether a stay will harm the parties. The Fourth Circuit should provide guidance to district courts.

In Landis, the Supreme Court announced district courts have the power to stay their proceedings and outlined the limitations within which the district court may use the power.[clxxxi] The Court stated, “the power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.”[clxxxii] However, the Court did not give district courts this tremendous power without limitation.[clxxxiii] The Court restricted district courts’ power to grant a stay of their proceedings to situations where the movant “make[s] out a clear case of hardship or inequity in being required to go forward.”[clxxxiv] The Supreme Court did not limit the number of factors the district court could consider when determining whether a party has made “out a clear case of hardship or inequity in being required to go forward.”[clxxxv]

Although the Landis standard for determining whether to grant a stay applies, the Fourth Circuit should provide district courts with factors to assess when determining whether to grant a stay. The factors should not be binding on district courts; rather, the factors should provide district courts with guidance. District courts should assess the facts of each case and determine which factors are relevant. In this context, courts’ suggestion that the frivolous nature of the appeal must be assessed, commentators’ suggestions that the Hilton factors should be applied, and other factors should be weighed by the district court are relevant.

Embedded in the district court’s power to decide whether to stay the proceedings is the power to determine whether the movant is attempting to unnecessarily forestall the proceedings. Therefore, if the movant is filing a frivolous appeal or motion, the district court is required to weigh the frivolous nature when determining whether to grant the stay.[clxxxvi] Because a stay is not presumptive upon appeal and the frivolous nature of the appeal must be considered under Landis,[clxxxvii] litigants will not be incentivized to file frivolous motions to compel arbitration. Consequently, district courts will assess the frivolity of an appeal or motion as part of the stay analysis. Applying the stay analysis from Landis will eliminate the need to conduct a separate hearing on the frivolous nature of the appeal suggested in McCauley.

In addition to assessing the frivolity of the appeal, the district court should weigh the potential harms to the parties and the public interest in the appeal. The Ninth Circuit in Britton directed district courts to Donaldson which applied the Hilton factors.[clxxxviii] The Hilton factors require the district courts to assess the likelihood the movant will succeed on his appeal, the potential harms to the parties, and the public interests.[clxxxix] This article is not suggesting the Fourth Circuit adopt the Hilton factors as the applicable test. Adopting the Hilton factors as the applicable test is not supported by existing law.[cxc] However, the article is asserting the Fourth Circuit should instruct district courts to assess the likelihood the movant will succeed on his appeal, the potential harms to the parties, and the public interests because these factors fall within the Supreme Court’s instruction to consider the “economy of time and effort” in staying the proceedings.[cxci]

One commentator asserted application of the Hilton factors is largely unworkable.[cxcii] In regard to the first Hilton factor, the commentator asserted to contemplate a district court denying a motion to compel arbitration, then ruling the appealing party had a substantial likelihood of succeeding on the appeal is paradoxical.[cxciii] The commentator’s position ignores two possibilities. First, sometimes district judges must rule on motions they believe are close calls. Even if the decision is a close call, judges must issue a ruling. In light of the statistical fact that nearly 50% of denials of motions to compel arbitration between 2000 and 2008 were reversed[cxciv], many judges may find that ruling on a motion to compel arbitration is a close call and likely to be reversed. Second, the likelihood the moving party will succeed on appeal is merely one factor among a plethora of other factors that may be considered in deciding whether to stay the litigation. A district court may find the appeal is not likely to succeed and determine the potential economic harm to one of the parties is sufficient to warrant a stay of the proceedings.

Assessing the potential harms to the parties and the public interests will require a fact intensive inquiry by district courts. To assess potential harms, the district courts will need to assess facts such as the extra costs the parties may incur and the lost opportunities of the parties due to delayed litigation. For example, assume a general contractor and a property owner have contracted for the contractor to renovate a building. The contract includes an arbitration clause for any disputes arising under the contract. The contract contains a general provision addressing the procedure by which the parties will handle unanticipated work, but does not expressly address asbestos abatement. Neither party anticipates the need for asbestos abatement.

However, during the course of the renovation, the contractor discovers asbestos. Both parties contend the other party should pay for the abatement. As a result, the contractor files suit in district court. The property owner files a motion to compel arbitration asserting the disputes falls under the arbitration clause. When the district court denies the owner’s motion, the owner appeals the district court’s ruling. During the proceedings, the renovation is delayed.[cxcv] As most contracts of this nature, the contractor will receive a completion bonus for finishing the renovation by a particular date. The court will need to assess whether staying the proceedings pending appeal will unnecessarily delay the contractor’s work such that the contractor cannot collect the completion bonus.[cxcvi]

On the other side, the court will need to assess whether the moving party will be harmed by the litigation going forward. In the asbestos example, the district court will need to assess whether the property owner will be harmed if the district court continues with the proceedings. For example, the renovation may be state-of-the art-green technology. Although not proprietary, the property owner intended the design as a significant market advantage. The market advantage may be eroded if the public proceedings of the district court are carried forward. However, submitting the dispute to arbitration would protect the owner’s interest in keeping the information private.

To assess the public interest in the decision whether to grant a stay, district courts should determine whether the purposes and policies of the FAA encourage the court to stay the proceedings in the particular case. The main public interest implicated by a § 16 appeal is the precedent set which will affect future litigants. Therefore, the Fourth Circuit should instruct district courts to consider whether the stay motion or the motion to compel presents a “substantial question.” The Ninth Circuit used the “substantial question” test as an example of a factor the district may consider in determining whether to stay proceedings pending appeal.[cxcvii] The Ninth Circuit cited Pearce where the Court of Appeals for the District of Columbia stayed proceedings pending appeal because the motion to compel arbitration presented “issues of first impression.”[cxcviii] As in Pearce, district courts should assess whether a particular case presents an issue of first impression and whether the issue should be decided before the district court proceedings go forward.

Conclusion

By taking every step of the analysis suggested in this article, the answer to the divestiture question troubling the Circuits becomes apparent. Congress did not intend for the district court to be divested of jurisdiction upon a § 16 appeal.[cxcix] Additionally, the Supreme Court stated the issue of arbitrability and the merits of the underlying dispute are sufficiently severable for the trial proceedings to go forward.[cc] Therefore, if a litigant files a motion to stay the district court proceedings, the motion should be assessed by the district court under the Landis standard.

When Congress enacted the FAA, interlocutory review of a district court’s order denying motions to compel arbitration was not permitted.[cci] For the first ten years of the FAA’s existence, the district court was not divested of jurisdiction because denials of motions to compel arbitration were not appealable until the disposition of the district court proceedings.[ccii] The Supreme Court created the opportunity for litigants to receive interlocutory appeal with the Enelow-Ettelson doctrine.[cciii] However, the Court did not divest the district court of jurisdiction.[cciv] Late in the Enelow-Ettelson doctrine’s life, the Supreme Court stated the merits of the underlying dispute and the arbitrability issue are sufficiently severable for the district court proceedings to go forward.[ccv] Congress acquiesced in the Supreme Court’s application of the Enelow-Ettelson doctrine.[ccvi] Congress indicated a preference for the allowance of interlocutory appeal under the Enelow-Ettleson doctrine when Congress enacted §16 in reaction to the Court’s repudiation the Enelow-Ettleson doctrine.[ccvii] However, Congress did not enact a stay provision despite the law’s general disfavor for staying district court proceedings. Congress clearly did not contemplate a presumptive stay of the district court’s proceedings when Congress enacted § 16.

Additionally, the Supreme Court stated the district court is not divested of jurisdiction.[ccviii] The Supreme Court stated in Moses the issue of arbitrability and the merits of the underlying suit are easily severable.[ccix] The Fourth Circuit must heed the explicit statement in Moses, because the Circuits are bound by the Supreme Court’s precedent. The Third, Seventh, Eleventh, and Tenth Circuits’ attempts to distinguish Moses fail. The Bradford-Scott line of reasoning attacks the statement in Moses directly which results in a decision directly contrary to the Supreme Court precedent.[ccx] Until the Supreme Court renders a decision repudiating or narrowing the statement in Moses, Moses is binding on the Circuits. Therefore, the Fourth Circuit should not adopt the Bradford-Scott line of reasoning.

Insomuch as the Fourth Circuit should not adopt the Bradford-Scott line of reasoning, it should not adopt the Britton line of reasoning. Although, the Britton analysis properly recognizes the binding nature of Moses,[ccxi] the opinion fails in two aspects. First, Britton omits the historical analysis of the FAA which is relevant to show Congress did not intend an appeal from a motion to compel arbitration under the FAA to divest the district court of jurisdiction.[ccxii] Additionally, the history of the FAA shows Congress was content with the method announced in Landis. Under Landis, the district court will determine on a case by case basis whether to stay the proceedings pending appeal.[ccxiii] Second, the Britton analysis fails to instruct district courts with regard to the proper application of the Landis analysis. District courts must determine on a case by case basis which factors are relevant and weigh those factors to determine whether a stay is in the best interests of the parties and respects the purposes and policies of the FAA.[ccxiv]

The Fourth Circuit will inevitably have the opportunity to address this contentious issue. Adopting the reasoning suggested in this article will allow the Fourth Circuit to reach the correct result through the proper reasoning. By using the proper reasoning, the Fourth Circuit will respect binding Supreme Court precedent, Congressional intent in enacting the provisions of the FAA, and allow for the consideration of the policies underlying the FAA.

- Cody S. Wigington*

“I’m sorry.” These two small words possess the potential to eliminate the creation of conflict altogether or, at a minimum, to facilitate a conflict’s resolution. Why, then, are apologies not offered more frequently and more quickly within the context of an unexpected medical outcome? The purpose of this article is to identify the different types of apologies currently used within the medical malpractice context, discuss the advantages of full disclosure and apology, explore the obstacles to full apology in South Carolina, and provide a brief overview of medical malpractice mediation in South Carolina.

What Must a Healthcare Provider Disclose?

As an initial matter, one must consider whether physicians are obligated to offer apologies, and, if so, what constitutes an apology.[ii]  Numerous professional medical organizations have articulated ethical standards compelling physicians to disclose medical errors to patients. [iii] The American College of Physicians’ Ethics Manual provides that “physicians should disclose to patients information about procedural or judgment errors made in the course of care if such information is material to the patient’s well-being. Errors do not necessarily constitute improper, negligent, or unethical behavior, but failure to disclose them may.”[iv] Further, the American Medical Association (AMA) instructs physicians that when “a patient suffers significant medical complications that may have resulted from the physician’s mistake or judgment… the physician is ethically required to inform the patient of all the facts necessary to ensure understanding of what has occurred.” [v] The AMA counsels that “[c]oncern regarding the legal liability which might result following truthful disclosure should not affect the physician’s honesty with a patient.” [vi] While it is clear what disclosures are ethically required of a treating physician, it is less clear whether an apology is a necessary component of the disclosure or what components are necessary to effect an apology.

Authors define apology differently.[vii] Aviva Orenstein contends apologies should: (1) acknowledge the legitimacy of the grievance and express respect for the violated rule or moral norm; (2) indicate with specificity the nature of the violation; (3) demonstrate understanding of the harm done; (4) admit fault and responsibility for the violation; (5) express genuine regret and remorse for the injury; (6) express concern for future good relations; (7) give appropriate assurance that the act will not happen again; and, if possible, (8) compensate the injured party. [viii]

Hiroshi Wagatsuma and Arthur Rosett state that an apologizer must acknowledge five things to constitute a meaningful apology: (1) the harmful act happened, caused injury and was wrongful; (2) the apologizer was at fault and regrets participating in the act; (3) the apologizer will compensate the injured party; (4) the act will not happen again; and (5) the apologizer intends to work for future good relations. [ix]

Steven J. Scher and John M. Darley identify four components of an apology: (1) the admission of responsibility; (2) an expression of remorse; (3) a promise of forbearance; and (4) an offer of repair.[x] Jonathan R. Cohen identifies three elements: (1) admitting one’s fault; (2) expressing regret for the injurious action, and (3) expressing sympathy for the other’s injury.” [xi]

Michael Runnels defines a full apology as “an expression of regret that acknowledges fault and is coupled with compensation for the harmed party.” [xii] A partial apology is “an expression of remorse or regret without any admission of fault.”[xiii] In her comprehensive empirical analysis of the role of apology in settling disputes, Professor Robbennolt defines a “partial apology” or sympathy expression as one in which the offending party expresses sympathy and hope for a rapid recovery, but does not accept responsibility for the accident causing the injury.[xiv]

Healthcare providers have received varied advice about what they should disclose, whether they should apologize and, if so, what constitutes an effective apology. [xv] A survey of hospital risk managers revealed variation of disclosure practices among hospitals.[xvi] Most risk managers reported that they include an explanation (92%) and would initiate an investigation into the occurrence (87%) when making a disclosure; however, only 68% reported that they include an apology.[xvii] Fewer reported that they offer compensation (36%) and even fewer accept responsibility for the harm (33%).

The Advantages of Full Disclosure

Anecdotal evidence of the positive effects of full disclosure and apologies within the medical context has more recently been confirmed by empirical data and systemic adoption of full disclosure policies by healthcare institutions. The evidence “clearly supports that patients and families who are harmed by unanticipated outcomes have the same basic trio of needs: honesty and information in real time, close to the event rather than after a lengthy investigation; an acknowledgement of their pain and suffering and an apology if warranted; and an assurance that what happened to them won’t happen to someone else-the patient safety connection.”[xviii]

In one experiment, 149 patients were presented with hypothetical descriptions of medical errors that resulting in injuries of varying severity. [xix] 98% of the patients “desired or expected the physician’s active acknowledgment of an error.”[xx] Patients indicated they were more likely to change physicians, report the physician or file a lawsuit if the physician did not disclose the error than if they were advised of the error.[xxi]

Another experiment surveyed health care plan members’ responses to vignettes involving medication errors and varying physician responses. [xxii] In non-disclosure vignettes, the physician provided limited information about the error and did not acknowledge responsibility.[xxiii] In the full disclosure vignettes, the physician provided additional information, accepted responsibility for the error, apologized and detailed steps that would be taken to avoid recurrence. [xxiv] Patients who read the full disclosure vignettes were less likely to indicate they would seek legal advice regarding the incident or change physicians and reported more satisfaction, more trust in the physician and fewer negative emotions that those in the non-disclosure vignettes.[xxv] 88% of the participants agreed they would want their physician to apologize and 99% agreed they would want to know something was being done to prevent this from happening to others. [xxvi]

Another study presented videotapes to patients depicting a dispute between a patient and a physician regarding the patient’s wait time. [xxvii] Each version of the dispute displayed a different reaction by the physician, including several types of apology or explanation.[xxviii] Patients reported the greatest satisfaction with physician responses that involved an apology with an implied acceptance of responsibility and an apology that included an explanation for the wait.[xxix] Patients identified an apology as the most important statement that a physician can give, followed by an explanation.[xxx]

In another study with 145 respondents involving the non-medical scenario of a pedestrian-bicycle accident, the willingness of the respondent to settle hinged largely on the offer of a meaningful apology.

“When no apology was offered, 52% of respondents indicated that they would definitely or probably accept the offer, while 43% would definitely or probably reject the offer and 5% were unsure. When a partial apology was offered, only 35% of respondents were inclined to accept the offer, 25% were inclined to reject it, and 40% indicated that they were unsure. In contrast, when a full apology was offered, 73% of respondents were inclined to accept the offer, with only 13-14% each inclined to reject it or remaining unsure.” [xxxi]

According to this data, those who offer a full apology stand the best chance of reaching settlement or avoiding litigation altogether.[xxxii]

These studies confirm that health care providers who provide a meaningful apology to their patients enhance the relationship with the patient and instill greater confidence in the healthcare system as a whole. Additionally, systems which foster a culture of apology benefit as well.

In 1987, after losing two major medical malpractice cases, the Veteran Affairs Medical Center in Lexington, Kentucky (Lexington VA) instituted an extreme honesty policy of disclosing adverse events to patients, even when patients were unaware an adverse event occurred.[xxxiii] Representatives of Lexington VA promptly made disclosures to the patient, patient’s family, or representative verbally in a face to face meeting; admitted fault; and offered settlement where appropriate.[xxxiv] A written acknowledgement of fault was also offered, if desired by the patient, patient’s family, or representative.[xxxv] In addition to providing documentation of dealing with adverse events in case of future malpractice litigation, this process also afforded significant unanticipated financial benefits for Lexington VA.[xxxvi] Although the number of reported errors increased, the number of litigated claims dropped dramatically.[xxxvii]

In 2003, Kaiser Permanente, the nation’s largest not for profit Health Maintenance Organization, adopted a program based on the MedicOm model first implemented at the National Naval Medical Center in Bethesda, Maryland in 2001, to offer “more equitable and integrative solutions to injured patients and their families after an unanticipated outcome has occurred.” [xxxviii] In furtherance of Kaiser Permanente’s initiative, more than 11,000 physicians and other health professionals were trained in communication skills that encouraged honesty, empathy and sympathy, including how to acknowledge the effects that the adverse outcome might have on patients and families as well as to apologize personally when appropriate.[xxxix] The Ombuds/Mediators serve as go-betweens to ensure the needs of patients and families are taken care of appropriately, including providing answers to the difficult questions of what happened and why.[xl] As a result of the Ombuds/Mediator program, Kaiser Permanente is saving significant legal fees, although that was not the motivator for the program’s inception.[xli] Instead, Kaiser Permanente was motivated to ensure their members’ quality-of-care concerns are addressed in a timely, empathetic and honest manner while also providing a neutral, confidential resource to Kaiser Permanente’s providers for the fair resolution of conflicts.

Other healthcare systems have advanced a culture of apology with beneficial results for both patient care and the providers. For example, the University of Michigan Health System (UMHS) began an active disclosure-with-offer program in the late 1990’s.[xlii] By 2001, UMHS began responding to all medical malpractice claims “by admitting fault and offering compensation when an internal investigation reveals medical error.”[xliii] Conversely, if the internal investigation reveals no medical error, the claim is vigorously defended, but an explanation is provided for its conclusion.[xliv] In 2002, UMHS began linking the investigation process with peer review and quality improvement efforts and later integrated the program with patient safety efforts.[xlv] After full operation for a few years, the program resulted in a dramatic decrease in the monthly rate of new claims, monthly rate of lawsuits, and time between claim reporting and resolution.[xlvi] Average monthly costs for total liability, patient compensation and non-compensation related legal fees also decreased.[xlvii] Additionally, the cost per lawsuit shrank from $405,921 to $228,308.[xlviii] Notably, these savings have been redirected into quality improvement projects. [xlix]

The empirical data indisputably establishes the benefits of a full disclosure system, but this concept continues to meet resistance within the healthcare industry.

Obstacles to Full Disclosure and Apology in South Carolina

The treatment of fault in the various definitions of apology suggests one of the greatest obstacles to the offer of a full apology: fear of civil liability. “Health care providers cite fear of litigation as a major barrier to disclosing and apologizing for medical error.”[l] The fear of impending litigation is then coupled with the fear that any apology offered may be used against the health care provider. “[I]t seems clear that part of the fear of litigation stems from concern about how jurors will react to a case in which a provider has disclosed error and apologized.” [li]

In 1986, Massachusetts became the first state to adopt an evidence rule designed to proscribe apologetic expressions of sympathy and benevolence from admissibility when used to prove liability in civil cases.[lii] In 2006, South Carolina enacted the South Carolina Unanticipated Medical Outcome Reconciliation Act, S.C. Code Ann. Section 19-1-190, (the Act). Specifically, the Act states that:

[C]onduct, statements, or activity constituting voluntary offers of assistance or expressions of benevolence, regret, mistake, error, sympathy, or apology between or among parties or potential parties to a civil action should be encouraged and should not be considered an admission of liability. The General Assembly further finds that such conduct, statements, or activity should be particularly encouraged between health care providers, health care institutions, and patients experiencing an unanticipated outcome resulting from their medical care. Regulatory and accreditation agencies are in some instances requiring health care providers and health care institutions to discuss the outcomes of their medical care and treatment with their patients, including unanticipated outcomes, and studies have shown such discussions foster improved communications and respect between provider and patient, promote quicker recovery by the patient, and reduce the incidence of claims and lawsuits arising out of such unanticipated outcomes. The General Assembly, therefore, concludes certain steps should be taken to promote such conduct, statements, or activity by limiting their admissibility in civil actions. S.C. Code Ann. Section 19-1-190(B).

In any claim or civil action brought by or on behalf of a patient allegedly experiencing an unanticipated outcome of medical care, any and all statements, affirmations, gestures, activities, or conduct expressing benevolence, regret, apology, sympathy, commiseration, condolence, compassion, mistake, error, or a general sense of benevolence which are made by a health care provider, an employee or agent of a health care provider, or by a health care institution to the patient, a relative of the patient, or a representative of the patient and which are made during a designated meeting to discuss the unanticipated outcome shall be inadmissible as evidence and shall not constitute an admission of liability or an admission against interest. S.C. Code Ann. Section 19-1-190(D).

The defendant in a medical malpractice action may waive the inadmissibility of the statements defined in subsection (D) of this section. S.C. Code Ann. Section 19-1-190(E).

Nothing in this section affects the South Carolina Rules of Evidence. S.C. Code Ann. Section 19-1-190(F).

Although this statute provides a shield for conduct, statement, or activity that occurs within a designated meeting[liii] as defined within the Act, it fails to fully insulate health care providers from any admissibility in a civil action. First, the Act fails to go as far as legislation enacted in other states, such as Colorado, which expressly protects an admission of liability from admissibility in a civil action. Second, the Act preserves the South Carolina Rules of Evidence, which may be interpreted to allow a non-hearsay statement to come into evidence if the statement was made outside the setting of a designated meeting.[liv] Rule 801(d)(2), SCRE, specifically excludes statements made by a party or a party’s authorized representative from the definition of hearsay in keeping with Rule 801(d)(2) of the Federal Rules of Evidence, rendering such statements likely admissible.^[lv] Finally, the Act anticipates that a health care provider may waive the protection against admissibility provided by the Act. If multiple health care providers are involved in the same case and one can waive the inadmissibility of “conduct, statement or activity” that may support the plaintiff’s cause of action, the protection of any non-waiving provider’s conduct, statement or activity may be unilaterally destroyed.

An additional obstacle to full disclosure and apology is the fear of stigma amongst colleagues. Health care providers are anxious that disclosing errors and offering apologies will compromise the respect and trust extended to them by peers and patients.[lvi]

Perhaps the largest barrier facing a physician is the fear of registration with the National Practitioner Data Bank (NPDB), which maintains a permanent record of adverse professional events for physicians, including payment made to resolve medical malpractice claims in any amount.[lvii] There is no minimal dollar threshold for medical malpractice reports.[lviii] Although there are ways to avoid mandatory reporting, as argued by Dr. Morreim, physicians still fear the possible adverse consequences of reports to the NPDB, even if such reports were made in error.[lix]

As noted by the Montana Supreme Court in the case of Doe v. Community Medical Center, Inc., 221 P.3d 651(Mont. 2009), “[A] ringing bell cannot be unrung. An erroneous report announcing to all interested parties that a physician is being investigated or suspended for unethical activity or impairment has the potential for immediate harm as well as permanent harm, even if later recanted.”[lx]

Accordingly, health care professionals’ path to a culture of apology remains riddled with obstacles, despite the potential benefits of early resolution arising from full disclosure and apology.

Mediation of Medical Malpractice Claims in South Carolina

2005 heralded significant tort reform in South Carolina. South Carolina now requires medical malpractice claims be mediated prior to filing a civil action. S.C. Code Ann. §15-79-125(C) mandates that the parties participate in a mediation within 90 days and no later than 120 days from the service of the Notice of Intent to File Suit, “unless an extension for no more than 60 days is granted by the court based upon a finding of good cause.” Additionally, once a lawsuit is commenced, S.C. Code Ann. § 15-79-120 requires that all medical malpractice actions be mediated before the matter is brought to trial. Accordingly, the parties to a medical malpractice action not resolved in an early resolution system like those outlined herein above must participate in two formal mediation conferences prior to trial.

All mediation conferences are governed by the South Carolina Court-Annexed Alternative Dispute Resolution (ADR) Rules. Rule (8)(a)(2) of the ADR Rules provides “[a]dmissions made in the course of the mediation proceeding by another party or any other person present” are confidential. Thus, the mediation conference provides confidentiality for any admissions or statements of apology when the Act and the South Carolina Rules of Evidence cannot guarantee the same protection for the same statement if offered outside the protection of a “designated meeting” or otherwise outside the mediation conference. The guarantee of confidentiality within the mediation proceeding does not resolve the physician’s concern about reporting malpractice settlements to the NPDB, but does offer a layer of protection otherwise unavailable that may motivate a practitioner to more readily admit a medical error and apologize.

CONCLUSION

A growing body of empirical data confirms that full disclosure and apology in the event of an adverse medical event is integral to the early resolution, and possible avoidance altogether, of medical malpractice claims. These studies demonstrate that even a partial apology significantly reduces the likelihood a patient or patient’s family will pursue a medical malpractice claim. More importantly, the data compiled from systems where full disclosure and apology policies have been adopted reflects an improvement in the quality of patient care, a marked decrease in the number of medical malpractice lawsuits filed and a decrease in overall costs to the providers. However, healthcare providers must overcome significant obstacles to embrace a culture of disclosure and apology, including, but not limited to, fear of litigation, potential stigmatization, possible admissibility of apologies or admissions in a civil action and registration with the National Practitioner Data Bank. South Carolina has moved to offer some protection to disclosures made by health care providers when an unanticipated adverse event occurs, but these protections do not guarantee confidentiality except in the context of either a designated meeting as defined by the South Carolina Unanticipated Medical Outcome Reconciliation Act or a mediation conference.

- Darra James Coleman [i] 

So there you sit, a newly minted young lawyer complete with a diploma on the wall, a bar card in your pocket, and years of training in the rules of evidence and procedure. However, long before you stand up and utter the words “ladies and gentlemen of the jury,” you will probably mediate dozens of cases. But, the skills you will need to competently represent your client in the mediation arena are not tested on the bar, and are only spottily covered in law school curriculums. Thus, your primary means of learning how to mediate is through trial and error, sometimes to the detriment of your client’s interests.

The problem becomes even more acute if you are starting out as a construction lawyer. Besides trying to obtain and apply the skills required for a successful mediated negotiation, you must learn a foreign language of RFIs, CCDs, COs, and AIA contract forms, while dealing with clients and opposing attorneys who can be a direct and profane group compared to a roomful of patent lawyers. Moreover, by their very nature construction disputes tend to include a complex and challenging mix of issues and players, yet offer opportunities for creative resolution that one rarely encounters in a personal injury case. The purpose of this article is to introduce the mediation process to young lawyers in the context of a construction dispute with a focus on the issues and considerations that differ from those one encounters in preparing a case for trial.

What Is Mediation?

Well, let’s start at the beginning:  Mediation is nothing more than a facilitated negotiation between two or more parties. If it is court-ordered, which is not always the case, it will be governed by the ADR rules and statutes in that particular jurisdiction. Depending on the circumstances, the mediator may or may not be certified to mediate a particular category of cases. But, regardless of certification, most jurisdictions allow the parties to select whomever they choose to be their mediator even if the mediation has been court-ordered.

Many construction contracts, particularly in large and complex projects, include standard American Institute of Architects dispute resolution language that may mandate mediation or arbitration in the event of a dispute. Think carefully about whether your claim falls within the ambit of those contractually mandated for mediation, taking into account both the nature of the claim and whether your client is either a signatory to the contract or a third-party beneficiary. The same contract may address the criteria for selection of a mediator, such as directing that he or she comes from the American Arbitration Association’s construction mediation panel.

Preparing Yourself for Mediation:

In some ways, preparing for mediation is much like preparing for trial. Once you receive a mediation notice informing you of the date, time and location of the mediation, as well as the name of the mediator, start by familiarizing yourself with the rules and statutes that govern mediation in your jurisdiction. There is wide variation regarding issues such as confidentiality that may become critical based on what transpires at the mediation conference. If the mediation is voluntary, do not assume that the rules and statutes governing court-ordered mediation apply; in this scenario, the best practice is to obtain an agreement from the other side in advance, ensuring that all will abide by your jurisdiction’s mediation rules.

You should evaluate your case much like you are getting ready for trial. Review the pleadings to make sure you understand what causes of action have been alleged, what defenses have been raised, and what elements of proof both sides face in presenting their respective cases. Your local standard jury instructions are also very helpful. Refer back to these elements of proof in reviewing the discovery to date with a critical eye toward factual disputes and potential evidentiary issues that might impact one side’s trial presentation. Make sure you can tie these pieces together in a way that will allow you to explain to the mediator and the opposing side why you think you will prevail if the case does not settle at mediation.

So far, all of this sounds a lot like what you learned of law school. However, a successful mediation requires more. Foremost, you must adequately understand your client’s goals, and those of the other side, such that you may evaluate settlement offers and demands in a way that allows you to identify value – adding opportunities that will facilitate settlement. For instance, if you represent a defendant in a personal injury case, it would be useful to know whether the plaintiff has an immediate financial need he or she hopes to address through the mediation settlement. If you are mediating in July, and you know that the plaintiff is sending a child to a private university in August, this may present an incentive for the plaintiff to take less money than the case might be worth if the plaintiff could wait until the conclusion of the litigation process.

Regarding case evaluation, you will need to calculate a reasonable settlement range, particularly if the dispute solely involves a monetary settlement. A reasonable settlement range can be calculated by analyzing the likely damages spectrum, and the variables that may affect the likelihood of a number at the higher or lower end of that range. This gets progressively easier as you grow grayer around the temples. But variables you might generally consider include verdicts or arbitration awards in similar cases in your state or your county, the identity and likability of the parties in your case, and the possibility that the facts of the case will strike an emotional chord with the finder of fact. Obviously, if liability and causation are hotly contested, you will need to take these issues into account as well.

These principles all apply in the context of construction mediation. In the course of evaluating your case, experts such as a professional engineer, estimator, or construction scheduler may play a critical role in helping you develop theories of liability, possible defenses, a litigation plan, and the facts you will need to negotiate effectively.  Consider whether to have these experts prepare a report for the mediator to review, and whether to share such a report with the other side in advance of the mediation because they can take this information into account in analyzing their settlement position. Also, it may make sense to bring the expert to the mediation to assist in addressing factual disputes.  If you choose to do so, make sure the expert understands the importance of mediation confidentiality, and the scope of his role in the negotiations.

Another consideration that typically arises in the context of construction mediation centers upon insurance. Large construction projects often include in their contractual documents obligations to provide payment or performance bonds. The entities behind these bonds, usually major insurers, may have obligations under the surety contracts that go well beyond what you might encounter in a commercial general liability policy.  For instance, a surety on a performance bond may be obligated not only to pay when a contractor abandons a job, but also to step in and arrange for the completion of the project. Besides surety bonds, most construction disputes include complex insurance coverage issues that lead liability insurers commonly to appear under a reservation of rights—in other words, they have agreed to pay for a defense, but not to indemnify their insured for a loss. As part of your preparation, it is time well spent to review the insurance contracts of all potentially responsible parties (these are generally available through discovery) so you are able to address coverage issues at mediation.

Once you have learned your case, analyzed the interests of the parties, and evaluated the spectrum of likely outcomes, you will usually write two very different letters. The first letter is directed to the mediator. This confidential assessment is meant to familiarize the mediator with the above analysis, and is primarily an advocacy piece. You want the mediator to understand the strengths of your case, but at the same time you must avoid overstating the merits and thereby losing credibility. Even though the mediator is not required to evaluate the case, mediators are people and cannot help but naturally develop a sense of rough justice that colors their perception of a fair settlement. The mediator will be your advocate in the other side’s room during the mediation unless you have lost the mediator’s trust, and the introductory letter carries that possibility.

The second letter should go to your client. The tone of this letter must be more neutral, and the substance must frankly advise your client of strengths, weaknesses, and likely verdict ranges if the case does not settle. It is imperative that your client understands that the letter to the mediator is meant to be persuasive, and not a neutral evaluation. If you fail to write this second letter, your client may arrive at mediation with unrealistic expectations; therefore, if things go awry at trial and your client seeks recourse from you, you will find yourself wishing you had written something to demonstrate that you advised your client of this possibility.

Finally, you may wish to create work product for the mediation session itself. Often visual aids and PowerPoint are used for a powerful effect in the mediation opening session, just as they would be used at trial. Once you are engaged in negotiations, it is useful to have a keep document binder, just like you might assemble for trial, as well as folders containing legal research on key issues in your case. Depending on where you are mediating, you may also wish to carry a wireless card to allow you to access the Internet using your laptop and a mobile phone connection, particularly if there are key documents that you did not bring to the mediation.

Preparing Your Client for Mediation

A successful mediation is almost always preceded by a meeting between lawyer and client to discuss what will transpire at the mediation conference. Make sure your client understands the rules governing your mediation, particularly confidentiality issues. In many jurisdictions, a breach of confidentiality can result in the striking of pleadings or the dismissal of one’s case. You should also explain the mediation process (which will be discussed in more detail below) and the role of the mediator. In particular, consider that at some point during the mediation, the client may be offered the opportunity to offer comments in front of the entire group. Think very carefully about whether you want your client to accept this invitation, and advise him or her accordingly beforehand regarding whether to speak. Although it may feel good for a client to vent about the person on the other side of the table, this kind of candor may result in a very short mediation conference.

More important than explaining the process is your discussion of your client’s goals at mediation. The client must understand that, in order to settle the case, he or she will likely face entering an agreement that is not necessarily a “win,” but not really a “loss” either. Over the years as a mediator, I have frequently commented to the parties that if both of them walked out of the mediation unhappy with the settlement they just reached, I probably did my job. Discussing your client’s goals will involve a certain amount of psychology: try to get them focused upon what they hope to accomplish, not just in terms of a monetary figure, but in terms of how their life will be different if the case is resolved. Have a candid discussion about the implications of failing to settle, including: payment of legal fees, the passage of time awaiting a judgment, and the uncertainty of outcome inherent in legal process. Although difficult, try to steer the parties away from focusing on what got them there, and that there is nothing you can accomplish at mediation that will undo the events, that brought the parties to this juncture. Finally, with an understanding of where your client wishes to arrive, give some thought to what your opening settlement offer and first series of counter offers should include. This latter consideration is not entirely under your control because it will be driven to some degree by the negotiating posture of the other side.

In the construction context, you will typically have more variables at your disposal to craft a settlement. These tend not to be distributive negotiations, simply selling a claim for a sum of money. Rather, you may address remediation if the issue is defective work or the extension of a warranty if the worry is that the defect may present a problem in the future. Money usually changes hands in a successful construction mediation, but it may come from a surety, a liability carrier, or a party such as an architect or developer. In the event a licensed professional such as a contractor or engineer is involved, explore whether your state’s licensing statutes provide a recovery fund for certain categories of construction disputes if the contractor becomes insolvent. The mere threat of an action against a contractor’s license, and thus his livelihood, may provide a strong incentive for settlement even if his former contracting company is long defunct by the time of the mediation.

The Mediation Process:

As an initial matter, make sure you have all of the requisite parties in attendance at the mediation. If there is insurance or a bond involved, you will almost certainly need to have the insurance adjuster available in person or by phone, and the named insured may not need to attend. If anyone is going to participate by phone, it should be cleared with the other side and with the mediator in advance. There is no surer way to scuttle negotiations in the first few minutes than for an attorney to arrive alone, carrying a dial-in number and looking for a speakerphone. If it is an out-of-town mediation that is scheduled to start in the morning, consider arriving the night before. Other than an uncoordinated attempt to participate by phone, arriving late is one of the quickest ways to anger all of the participants, and perhaps doom the mediation to failure.

Once you arrive for the mediation, you may be brought into a conference room with the other side and its attorneys present. Make sure your client is ready for this meeting if the mediator chooses to begin this way. Often the mediator will keep the parties apart until he or she is ready to begin the session, or may not have a joint session at all. Usually, the mediation will begin with a joint session during which the mediator will explain the process, and ask the attorneys to provide an overview of their case. Remember that the mediator already has your letter summarizing the dispute, and direct your comments to the parties on the other side of the table. Remind them that this is your one and only chance to speak to them directly, and if the case does not settle now, the next time you have a conversation with them they will be sitting on the witness stand.

Although some mediators keep the parties together the entire time, usually the plaintiffs and defendants will split into separate rooms for individual sessions called “caucuses.” The mediator will meet with one group at a time, learning more about the case and raising issues that may impact the desirability and the terms of the settlement. Sometimes these sessions are quite lengthy, particularly early in the mediation, so have your client bring something like a book to pass the time. To make matters worse in the construction context, it is not uncommon to have a dozen or more parties and their insurers in attendance, taking up an entire wing of hotel rooms waiting for the mediator to work his way through each room. This author recalls one construction mediation that began at 9 a.m., but the mediator did not arrive with his first settlement demand until after 3 p.m.!

During caucus, you may feel like the mediator is picking on you a little bit by playing devil’s advocate regarding potential problems with your case. However, a good mediator will perform this exercise with every party in an effort to move the litigants toward a set of settlement parameters where the case can be resolved. Sometimes this takes a short time, but often times it takes hours or even several days.  Once again, it is not uncommon for a mediation of a complex construction case to take more than one day, or to occur in mediation sessions separated by several weeks, attacking the dispute in phases.

At the end of the process, either the mediation will result in an impasse or the case will settle. Mediators are trained to press for a written mediation settlement agreement. As any good used car salesman will tell you, if a potential purchaser is allowed to go home and sleep on a purchase, after a substantial period of wrangling, that purchaser is far less likely to come back the next day and close the deal. Either with a pad and paper or huddled around a word processor, the mediator will walk the parties through the preparation of a written settlement agreement. The agreement will always be signed by the parties, sometimes by the attorneys, and occasionally by the mediator. Within the next day or so, the mediator will then file a report with the court, advising whether the case settled. You will also get a bill, often in the same envelope as the mediator’s report, for your share of the mediator’s fee. Realize that the mediator’s contract is with you and your law firm, not your client, so he expects to get paid regardless of whether your client pays you. Most good mediators are in demand and tough to schedule; if you make the mistake of stiffing one, you can rest assured you will probably never find your way back onto his or her schedule.

Conclusion

In this age of the vanishing trial, proficiency as a mediation participant and negotiator will have far more impact upon your success in furthering your client’s legal interests than the most polished set of trial advocacy skills. It may take years for you to develop the negotiation skills that are uniquely valuable in mediation, but a basic understanding of the process and what to expect at mediation is an important first step. At the same time, as a young construction lawyer you will simultaneously work toward learning the language and processes that make construction law perhaps the most complex and difficult area of civil litigation. Complex and difficult is not the same as insurmountable, however, and with a little preparation one can develop the skills necessary to thrive in this area of the law. Hopefully, the broad outline presented in this article will help guide you toward that goal.

-Michael P. Dickey, Esq., Certified Circuit Civil Mediator, Florida and South Carolina

I’d been asked to write an article on mediation for RESOLVED, the Dispute Resolution Society’s publication at the Charleston School of Law. Here’s a bit of that unfinished article I was working on before I found myself suddenly faced with having to mediate one of the more challenging cases of my career, involving a dispute which put my conflict resolution skills and reputation as an effective mediator to the test:

Court – annexed mediation has been flourishing since 1988, when the Florida Supreme Court and legislature vested its trial judges with the power to require parties’ litigant to attempt settlement of their case with the help of a trained mediator, engaged by the parties or appointed by the Court. Today, many jurisdictions in South Carolina and in virtually all other states, have one or more forms of court – ordered mediation in place (circuit civil, family, probate and others), and a number of different mediator styles and approaches to the process have evolved. Mediation is actually structured negotiation, and skilled mediators are adept at assisting the parties and their lawyers to reach their own settlement, if they choose to resolve their dispute, rather than imposing a resolution on the participants.

Although the enabling legislation, Court rules and ethical guidelines for mediation differ somewhat from state to state, virtually all court-ordered mediation systems adhere to the concept of party self-determination, defining mediation as a voluntary Alternative Dispute Resolution process in which the role of the mediator is limited to that of a neutral and impartial third-party facilitator instead of that as a decision-making adjudicator or arbitrator. Accordingly, something of an ethical bright line has emerged in most jurisdictions, restricting mediators from exerting undue influence over the parties’ decision to settle their disputes, and prohibiting mediators from coercion, intimidation, or rendering opinions and advice.

In jurisdictions where the use of mediation in litigated disputes has become commonplace, attorneys exercise the dominant role in the selection of the mediator in each of their cases. Some attorneys place great emphasis on a mediator’s knowledge and experience in the particular area of the law the case entails, while others emphasize mediator experience and proven mediation skills and techniques.

BACKGROUND AND CAST OF CHARACTERS: Here’s how the advent of sudden and serious conflict interrupted this article, but may have led to something a lot more interesting than the article I’d been writing: one of my great joys had been the peaceful walks my friend Karen and I regularly took with our dogs on the many woodland trails on her horse farm. There was Oscar, her 130 pound Bernese mountain dog; Osa, her aging 50 pound female black Labrador retriever; and my dog, Scout, a feisty formerly feral mixed-breed 35 pound female whom I’d rescued from the Humane Society’s death row some ten years before. Scout and Oscar had become very fond of each other over the past couple of years, with Osa assuming the role of wise chaperone. These three dogs had all gotten along with each other beautifully until Jasmine showed up. Fur flew and blood was drawn between Scout and Jasmine from their first meeting our tranquil walks had suddenly turned into a tumultuous canine conflict.

Jasmine, a beautiful and good-natured female golden Lab of about fifty pounds, belonged to a friend of ours who was traveling for six months. Karen had agreed to take care of Jasmine and we suddenly found ourselves struggling to keep these two warring spayed females apart. Scout was the more violent aggressor, determined to not only dominate but also to drive Jasmine, the “other woman,” out of the pack. Karen and I both thought Scout’s intense jealousy about Jasmine having come between Oscar and Scout was at the heart of their dispute.

“Aren’t you the famous mediator who’s helped resolve all those big multi-party cases?” Karen asked, following another scuffle between Scout and Jasmine. “And haven’t you trained as a crisis and hostage negotiator with that FBI agent who got Randall Weaver out of his cabin at Ruby Ridge alive? Harry, you’ve been teaching mediation and negotiation for years; why can’t you use some of those skills with these two scrapping dogs to bring some peace back into our fold?” She’d put me on the spot. Sure, I could mediate humans, but could I transfer those same skills to two dogs that were literally at each other’s throats? I was determined to find out. Perseverance and a belief in the mediation process were part of my DNA and, well, I wanted to look good for Karen, too.

PREPARATION: Preparation in mediation is important, so I set out formulating and deploying a plan to help Scout and Jasmine reach an accord and hopefully get along. I needed to design a process most likely to assist these dogs in choosing resolution over continued aggression and conflict. Using my mental mediator’s checklist, I reviewed what I thought I knew about their dispute and what I’d observed in their cantankerous interaction. One potential problem floated to the surface right away: could I be neutral and impartial in this doggy mediation? After all, those were ethical as well as mechanical prerequisites in my role as a mediator. If either dog viewed me as favoring one side over the other, it would not enhance the chance of a resolution. The truth was, I not only had a personal stake in the outcome, but my personal relationship with Scout was very different than with Jasmine.

In quiet, calm preliminary private meetings with each dog, I disclosed all of my potential conflicts and my concerns about my actual and perceived neutrality and impartiality. I explained the mediation process, what I was willing to do to help them resolve their conflict, and did a lot of petting and massaging of both dogs’ necks, muzzles and behind their ears. I also explained that I would do this mediation on a pro bono basis, but wanted them to assure me they would commit to doing their best in the process. Realizing I was getting each dog’s scent on my hands and clothes, I elected to have a second private meeting with each, and was pleased to see both Scout and Jasmine intensely sniffing each other’s scent on me. I took this as a signal of their assent to my acting as their mediator, and a commitment to proceed.

I chose Karen’s garage as a good neutral site for our mediation, put some towels down on the floor for me to sit on (permitting the three of us to be on the same level and allowing good eye-contact between the three of us). With both dogs on leashes, and not without some serious growling and snapping, I finally got them both lying down at arm’s length on either side of me and situated my only prop, a large water bowl equidistant, but slightly out of their reach, between them. Neither dog would look at each other; they acted just like so many combative lawyers and parties I had encountered at the outset of mediation over the years. I told Karen we would need an hour or so. Privacy and confidentiality are critical to the mediation process, and mediating in the garage with no time pressure would allow both Scout and Jasmine to focus on the job at hand without interruption or distraction.

MEDIATOR’S OPENING: The mediator’s opening remarks are vital to the process, helping to develop the participants’ trust in the mediator and the mediation process, to set a productive tone, and getting the participants comfortable and committed to exploration of resolution. I used my best calm and modulated voice to explain the process to Scout and Jasmine, explaining my role as a neutral facilitator and going over the advantages of their reaching some kind of agreement to get along voluntarily. I laid the predicate of some “settle-litigate analysis” with them, contrasting the joys of a “resolution” with their only alternative to a negotiated settlement: continued bickering, with the probability of their infliction of physical harm to each other, alienation of Karen’s and Oscar’s affection, and likely banishment from walks with the pack. During my opening remarks, I actively petted both dogs with a firm grip on their collars and leads to keep order, manage the process, and hopefully prevent them from lunging at each other. After all, containing and managing humans’ high emotion was my specialty; surely it would work with dogs.

My squabbling “parties” were still not making eye contact with each other, but they were at least looking at me and actively raising their ears as I talked with them both, extolling the virtues of mediation and setting what I hoped was a helpful atmosphere for them to consider the wisdom and advantages of resolution. I sensed it was time to change the dynamic a bit, and began gently shifting the responsibility of resolution to the two participants; after all, just as in human mediation, the final arbiters of risk (in the settle – litigate decision) are the parties. I couldn’t impose a resolution on them; they were going to have to reach one for themselves, maybe with a little help from me. There would be no settlement without their mutual agreement, and I knew that, for the four dogs and two humans involved in our extended pack, Jasmine and Scout needed to find a durable resolution if there were to be any lasting peace.

PARTIES’ OPENINGS: Party self-determination goes hand in hand (or paw in paw) with good mediation; the parties’ need to feel they “have their say,” are heard, and have the opportunity to actively participate in the process. They also need to feel they are involved in a “fair” and “balanced” process, whether a resolution occurs or not. In human mediation, I simply help participants use skills they already have, as I stimulate better communication, an enhanced analysis of their best interests, and (hopefully) some productive negotiation. I tried to do the same with Scout and Jasmine, using my best soothing voice and steady hands to ease them a bit closer to each other, still separated by the water bowl. I asked each dog to explain her understanding of the problem to the other, and “balanced the table” by giving each dog equal attention.

They both seemed to agree to my only ground rule: neither dog would interrupt the other with any snarling or barking until each had had the opportunity to say what she wished, allowing each dog to listen reflectively and carefully to the other. I used the water bowl as a means of giving each dog “the floor,” allowing each to lap some water while I talked and listened attentively to each. I noticed that Scout was finally looking at Jasmine as she noisily lapped water from the bowl, and then Jasmine did the same when it was Scout’s turn to drink. Progress, I thought, as I passed the bowl back and forth…was that a slight tail wag there? I was definitely sensing a relaxation of the tension between these previously pugnacious pooches. I even “restated” what I had sensed each dog’s “position” or view of the dispute was from what they’d demonstrated, affording each of my two participants some legitimacy with their feelings.

NEGOTIATION: Since I was feeling more confident about their ability to get along, I moved Scout and Jasmine a little closer; now the water bowl was close enough that either dog could stretch a bit and take a sip One by one they did, each watching the other carefully, but now without their ears pinned back quite as aggressively. I began asking them to think about how it would be if they decided they could get along. Did they both think it might be possible for them to share Oscar’s attention and companionship? Certainly there was enough ebullient love and joy on the part of Oscar for them both. Wouldn’t it be fine to resume our walks in the woods as a unified pack, watching together for deer, squirrels, wild turkey, and the occasional horsemen or other dogs? On these notes, both took another sip of water and, at one point, their noses almost touched.

In mediation with humans, I like to begin introducing consideration for the shape and preferred terms of a written settlement agreement early, and I did so with Jasmine and Scout, noticing some increasing eye contact between them. I explained that while a written and executed agreement would not be possible, they could ensure the durability of their accord through their continued demonstrated commitment to getting along, and in sharing Oscar’s affection and romping fun. They could do this, I suggested, through a cessation of growls and squabbles, and more mutually enthusiastic tail wagging and other friendly body language. Their ears were now up and attentive, for the most part, and I was thrilled when Jasmine sniffed Scouts paw and Scout wagged her bushy tail. Once again, it seemed that hope, the missing ingredient, was introduced and was expanding.

PRIVATE CAUCUS: While I often meet privately and confidentially with each side during mediation, in what is called a “caucus,” I was now averse to breaking the positive energy and progress I felt developing between Jasmine and Scout. I actually had private meetings with each dog in the preparation (“scent – exchange”) phase. I knew I could “trust the process,” and followed my own rule about not overusing caucus. Since I could not think of a good purpose for further caucus, and could certainly see some potential downside, I continued, keeping the parties energized and engaged together with me “at the table.” Each mediation is unique, I reminded myself, and I had always tried to shape and design the process to conform to the parties’ needs and the nature of the dispute: “fitting the forum to the fuss,” in other words. I could always resort to a brief caucus with each dog should it appear things were falling apart and if animosity started to reappear. Flexibility is a hallmark of mediation, permitting mid­course corrections in the dynamic if needed.

SETTLEMENT AGREEMENT: Back in the early days of mediation in Florida, my friend Jim Chaplin had taught me that one my most crucial mediator tasks is being “the guardian of the deal.” Now it was time to further facilitate and seal this developing resolution with the treats I’d kept in my pocket. I was careful in simultaneously giving both dogs these equally shared goodies, emblems of successful resolution, and praise for each from the mediator (whose fanny was getting cold on the concrete and needed to stretch his legs). I followed up with more congratulatory petting and assured each they were indeed good dogs. I had a flash of slipping up in a future human mediation by petting the participants on their heads and offering them treats. Well, I reflected, I’d mediated some cases where that technique might have been more effective than anything else I’d tried.

I was wondering how I was going to get up and get both dogs back over to Karen’s house without an incident, but they both stood up and acted as though there had never been a cross word between them. Osa and Karen, leading the way side by side to go find Oscar, both tails wagging. While neither dog “thanked” me, I had learned from many mediations that my reward was in knowing I’d been able to help warring factions find their own pathway to resolution, as it looked like these two had.

FOLLOW UP: While I had no Mediator’s Report to file with the Court, as I do in most cases I mediate, I did feel some formalization and further enhancement of Scout’s and Jasmine’s accord was in order, at least to give it the imprimatur of successful resolution and to add all I could to the durability of their deal. Accordingly, after a careful reuniting of Scout and Jasmine with Oscar, Osa, and Karen (during which only one brief snarl was noted), Karen and I elaborately praised both mediated dogs, extolling their virtues as good negotiators and wise resolvers of conflict. It really seemed that Jasmine and Scout were strutting a bit, proud of their hard-won resolution. All dogs had their dinner without incident and, as Karen and I finally sat down to enjoy our own repast, all four dogs were sprawled on the floor around us, somewhat exhausted, but seemingly filled with a new sense of unified well-earned peace.

LESSONS-LEARNED DEPARTMENT: Of course Karen was pleased, and I think a little astounded at the transformation in behavior between Scout and Jasmine, but I downplayed my role and tried to act as though it was nothing special, and commented that, once again, the mediation process had snatched settlement from the jaws of impasse. I was again reminded by this experience that I can trust the mediation process and, as some weeks have passed since the event, I am pleased to report Scout’s and Jasmine’s settlement seems to have been a durable one. Our pack is at peace, once more roaming the hills and trudging the path of happy destiny.

-Harry Good Heart, a former trial lawyer, a member of The Florida Bar and an Associate member of the South Carolina Bar, who lives in Tryon, NC, and is a certified mediator in North Carolina, South Carolina, and Florida. He has mediated many federal and state court cases throughout the eastern United States since 1988, and has taught mediator certification courses for South Carolina, North Carolina and Florida for over fifteen years. He and Mary Bryan teach upcoming courses on Negotiation and Conflict Resolution at the Charleston School of Law and the South Carolina Bar. You can reach Harry and Scout at harrygoodheart@windstream.net.

The surface of the Earth is almost three-quarters open ocean. [1] Mankind has plied her waters since the dawn of civilization for food, conquest, and trade; the earliest evidence of boats traces back four and a half millennia. [2] Early Mediterranean peoples relied heavily on seafaring for their livelihoods, and cultural expansion. [3] Where man goes, so goes conflict; civilization as we know it may be defined as a process of resolving those conflicts with minimal strife. As a society grows more complex, so do its coping mechanisms, which eventually evolve into normative behavioral patterns, a sense of duty, and both natural and codified laws.

As sea trading rapidly increased with the Age of Sail, multinational commercial concerns like the Dutch East India Company soon appeared. Over the intervening years this sea-trading emergence has developed into a system of international commerce, using the resources on, in, and under the seas to weave a tangled skein of money, products, and policy. [4] It is now rare for a commercial boat to ply any waters without multinational resources directly invested.

The basic concepts of littoral rights distinctions embodied in the United Nations Convention on the Law of the Sea (UNCLOS) have been acceded to by most nations, even those that are not signatories. [5] Starting from a baseline, usually defined as a tidal line with inclusions for bays and islands, there are the territorial seas, which were originally defined as the distance of a cannon shot from the shore, alternately, all that could be seen from the shore. [6] Given differences in metallurgy, chemistry, and manufacturing technology between the extant powers of the time, that definition ranged from three to twenty-four miles from the baseline. [7] Typically, conflicts arising in the territorial and contiguous areas are under the jurisdiction of the corresponding territorial State. While jurisdiction in the exclusive economic zone is less clear, there is still a strong tendency towards the territorial State. However, no State can lay claim to the high seas. The high seas are effectively lawless, except for treaties and customs that in many cases have applied for millennia, and of course, whatever laws the seafarers themselves enforce aboard their vessels.

The Origins of Arbitration

One thing is clear from all recorded histories: the original form of peaceful dispute resolution was arbitration by a neutral third party. [8] Before feudal lords, courts, and modern highbrow concepts such as individual rights, bringing a matter of discord to the tribal chief, village elders, or Greek fora for an enforceable, disinterested decision was a custom for those who did not wish to resort to stick, rock, or blade. Arbitration tapered off towards the end of the Greek era; the Romans did not develop arbitration, as they were not willing to submit to any other authority’s power to bind their actions. [9] In the High Middle Ages, arbitration reappeared as the Papacy treated equally European sovereigns of very different power bases. [10] This standard of acceptance became pervasive in all areas of law; its effectiveness was only extinguished by the conflicts marking the end of the Middle Ages. [11]

Most written histories agree that modern arbitration stems from the Jay Treaty between the United States and Great Britain at the end of the Revolutionary War. Since then, arbitration has continued to evolve along with the political and socioeconomic landscape.

Arbitration as a legal process in the current era has been favored as court backlogs grow and the landscape of law has rapidly changed. More and more products, from commercially caught fish to the entire contents of a Wal-Mart arrive via ship into ports all over the world. Our oceans are becoming more and more crowded. With increased traffic comes the reality of accidents, conflicts and disputes, security risks, and the ensuing legal battles. International courts can take an exceedingly long time to resolve an issue as well as being expensive and very public. This is especially burdensome when dealing with perishable cargo, or a politically sensitive commodity. Therefore, alternative dispute resolution methods, with their tendency towards swift resolution, confidentiality, and economy have been favored methods of dealing with disputes where basic negotiation has failed. Arbitration lends itself well to application to the often pragmatic rather than statutory issues originating on the high seas. Traditionally, many disputes have been solved informally through diplomacy and other cooperative methods. [12] When neither side is willing to compromise in negotiation, arbitration becomes an attractive option. However, the problem with arbitrage, or any tribunal or formal justice system on the high seas, is one of two parts – jurisdiction and submission. As will be shown, many of the recorded international arbitration decisions concern these two subjects.

Treaties Promoting Arbitration

International arbitration is typically established through treaties between States. Treaties, agreements between nations, have existed as long as civilization has formed political divisions, with examples of such instruments dating back to the third century BC. [13] The Peace of Westphalia of 1648 is considered to be the first multilateral treaty, binding several States without any express links between them. [14]

The Jay Treaty in 1794 between the United States and Great Britain at the end of the Revolutionary War established three arbitral commissions: one concerning boundary lines between the United States and Canada, one addressing claims of British merchants against American citizens before the end of the war, and another dealing with claims of seizure of vessels and cargo of American citizens by the British. This treaty is the modern foundation of arbitration as a part of the diplomatic process, and produced “remarkable and fortuitous economic and diplomatic gains” [15] until the War of 1812 began.

The Treaty of Treaties, the Holy Grail of treaties, is the Vienna Convention on the Law of Treaties (VCLT) of 1969, which is an international agreement outlining how treaties will be completed. The VCLT defined treaty as “an international agreement concluded between States in written form and governed by international law, whether embodied in a single instrument or in two or more related instruments and whatever its particular designation.” [16] Prior to the implementation of the VCLT, customary international law guided the States in forming their agreements. The norm for customary international law, jus cogens, has been defined as “rules of law derived from the consistent conduct of States acting out of the belief that the law required them to act that way.” [17] Numerous treaties have granted arbitration rights and duties concerning Law of the Sea disputes.

The Hague Conventions for the Pacific Settlement of International Disputes of 1899 and 1907 established the Permanent Court of Arbitration at the Hague Peace Palace as an institution and set the procedure for submitting claims for arbitration “which it has not been possible to settle by diplomacy.” [18] It provided that the member States select half of the arbitration board, as opposed to sitting judges selecting the board as on the International Court of Justice. Notably, the board members enjoy diplomatic immunity and privileges in order to ensure neutrality. [19] As the Court of Arbitration developed, it saw such matters as territorial disputes between Eritrea and Yemen over certain islands, a dispute between Barbados and Trinidad and Tobago over maritime delimitations stemming from interpretation of the UNCLOS, and a similar dispute between Guyana and Suriname. [20]

In 1911, William H. Taft, 27^th President of the United States, promoted a series of treaties on arbitration that became known as the Taft Arbitration Treaties. Negotiated between the United States, the United Kingdom, and France, the treaties expanded jurisdiction of the Permanent Court of Arbitration to include matters of vital interests and national honor in addition to those matters conveyed in a prior set of 1908 treaties. [21] The Taft treaties explicitly authorized use of equitable principles as well as law, instituted a mechanism for deciding if a matter was subject to arbitration by the Permanent Court of Arbitration, and granted investigatory authority prior to a matter being submitted for arbitration. Unfortunately, the United States Senate did not accept the treaties; by the time the Senate amended and modified the legislation, the Treaties bore little resemblance to the originals and President Taft withdrew his support in disgust. [22] What the Treaties did accomplish is an acknowledgement that arbitration was the preferred method of dispute resolution, as an alternative to war. [23]

Another cornerstone treaty supporting international arbitration was set by the New York Convention, formally known as the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which was signed in 1958. This treaty required the signatory States to give effect to one another’s arbitration awards; otherwise, it is very difficult to collect on an award when the assets in dispute are not in the jurisdictional reach of the arbitration court. [24] Compare this treaty with the Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters of 1971, which governs court of law judgment reciprocity between its signatories with many broad exceptions. [25] Under the more modern treaty, informal arbitrative proceedings are not given any weight or enforceability, and having a judgment at law enforced in a foreign State is a much more complex and difficult process that is fraught with technicalities. Enforcing an award under the 1958 treaty requires little more than an authenticated copy of the arbitral decision. [26]

Additionally, the Inter-American Convention on International Commercial Arbitration gives full value and credit to arbitration agreements embedded in commercial transactions between signatory States. [27] In an advisory opinion strongly supporting this premise, the International Court of Justice, created by the establishment of the United Nations Charter in 1945, reiterated the obligation of a member State to submit to arbitration in a dispute involving the establishment of an office in the United States (as part of United Nations Headquarters) of the Palestine Liberation Organization, which was granted observer status by the United Nations. [28] Amongst others, these treaties serve as a foundation for modern international arbitration, some examples of which are discussed below.

Examples of Modern Arbitration

One of the major differences between a formal jurisprudential process and alternative dispute resolution, particularly mediation, arbitration, and diplomatic efforts, is record keeping. Traditionally, there is no formal requirement for keeping arbitrage records. Nowadays most arbitration agreements include a clause of confidentiality, which is beneficial to the process. Thus, public records of such resolutions are infrequent; however, there are some clear examples.

One of the first references to arbitration as a discrete dispute settlement process is in the Treaty of Medina from 622 AD, wherein dispute arbitration was reserved to the Prophet Muhammad. [29]  Shortly thereafter, one of the more spectacular failures in arbitration occurred; lack of acceptance of the mediation between Muawiya, the governor of Syria, and the Caliph Ali in 659 AD permanently split the Islamic world into Shi’ite and Sunni branches, a decision that still has worldwide impact thirteen centuries later. [30]

The seminal modern Law of the Sea arbitration example is the Alabama Arbitration of 1871. The Alabama was an infamous warship commissioned by the Confederated States at the start of the U.S. Civil War in 1861. She sunk or destroyed over 60 Union vessels before she was sunk in 1864. In 1861, the British government declared their neutrality and made it an offense to “equip or arm any vessel to be used by any foreign State in hostilities against a friendly foreign State”. [31] The result of the arbitration, aside from an enormous monetary award, was the “general recog[nition], following the earlier precedents, that, in the absence of any agreement to the contrary, an international tribunal has the right to decide as to its own jurisdiction and has the power to interpret for this purpose the instruments which govern that jurisdiction.” [32]

In 1872, the Delagoa Bay arbitration was submitted to French president Louis Adolphe Thiers. The issue involved ownership of colonial land and bay waters in what is now Mozambique. The Portuguese initially developed the land for trade in the early 1500s, Dutch East India Company used it in the first half of the 1700s, and in 1823 the indigenous peoples and a captain of the British Royal Navy signed a treaty of cessation. The contention of who possessed title to southern part of the bay was decided in Portugal’s favor in 1875. This subject matter is rarely visited in the modern era, as the decision only applies to terra nullius, that is, an area that belongs to no one. [33] Only new islands (through volcanic or tectonic activity, for example) would fit this category. Although not used any more as a precedent, this award resulted in an acknowledgement of a State’s rights to be curtailed by an international arbitration body. [34]

In January 1888, the British-flagged whaler Costa Rica Packet towed and boarded a derelict Maylayan prauw. [35] The remaining goods on the derelict were initially transferred to the Costa Rica Packet, but upon discovery of extensive water damage thrown overboard. The Dutch authorities arrested Captain John Bolton Carpenter at Ternate in the Netherlands Indies territory on a subsequent voyage in 1981 for theft under the Netherlands Indies penal code, which assumed the derelict was the property of and in the territorial seas of the Netherlands Indies. The British government made a claim against the Netherlands for injuries suffered by the detention of the ship’s captain, and arbitration concluded Netherlands was liable for these damages. This decision gave force to “the contested principle that States are responsible for acts of their judicial authorities, even though the judiciary holds an independent position within the internal order of States.” [36] Three decades later, the International Court of Justice cited this decision as proof of exclusive jurisdiction of the flag State in The Case of the SS Lotus, one of the landmark Law of the Sea cases.

In 1904, Great Britain and France submitted to arbitral a matter concerning the Muscat Dhows, ships owned by the Sultan of Muscat (modern day Oman) but flagged in France. [37] Prior to the incidents, Great Britain banned slavery and the slave trade, and signed several treaties with neighboring nations, including France, which were intended to halt human trafficking. France, however, never consented to le droit de visite, the Right of Visit, whereby ships suspected of transporting slaves could be boarded and briefly inspected by warships of another State. The arbitrage decided two issues; (1) the conditions upon which a sovereign State could grant authorization to a ship to carry that State’s flag; and (2) what powers that authorization granted. The decisions on these two issues led to their codification in the UNCLOS of 1982 Articles 91 and 110, and were eventually cited “leav[ing] to each State exclusive jurisdiction over the granting of its nationality to ships” in the M/V Saiga case, another cornerstone Law of the Sea case. [38], [39]

The Netherlands and Portugal submitted to the Permanent Court of Arbitration in 1913 a matter of mutual mistake on a boundary dispute stemming from colonization of the island of Timor starting in the 1500s. Timor is at the eastern end of the Indonesian region, a part of the Sunda Islands, and famously the destination of William Bligh and his followers after the Mutiny on the Bounty. [40] The boundaries of each State’s possession of different parts of Timor, the east to the Portuguese and the west to the Netherlands, had been negotiated several times in various treaties, but due to the unexplored nature of the interior of the island had never been definitively determined. The arbitrator, being short of codified rules of interpretation for international law, relied upon equity to reach a decision. This decision still stands, dividing the portion of the island which is part of Indonesia from the Democratic Republic of Timor-Leste. [41]

The Permanent Court of Arbitration heard a dispute in 1931 regarding two Swedish flagged ships, the Kronprins Gustaf Adolf and the Pacific, which were detained in U.S. ports during 1917 and 1918. [42] The ships were carrying goods that the U.S., subsequent to its involvement in World War I, had restricted from export (in this case, fuel or bunker oil). The questions submitted to the arbitrator were: did the United States detain the two ships in contravention of the Treaties of Friendship, Commerce, and Navigation of 1783; if so, whether the United States was liable for damages incurred as a result of the detention; and lastly what, if any, pecuniary award was due Sweden? The primary finding echoed the principles set forth in the Case of the SS Lotus (France v. Turkey) of unrestricted sovereign rights, but its precedent has been deprecated in post-war jurisprudence. [43] On the other hand, the arbitrator’s Statements regarding the jurisdiction of such tribunals have been cited in later cases such as those before the Iran-United States Claims Tribunal. [44]

In 1949, the Abu Dhabi Oil Arbitration was held in the United Kingdom to decide a more modern issue in the Law of the Sea, that of submerged lands mineral rights. In 1939, the Sheik of Abu Dhabi, then a protectorate of the United Kingdom, formed an agreement with Petroleum Development (Trucial Coast) Limited regarding oil drilling rights in Abu Dhabi. The Arbitrator was asked to determine whether that agreement transferred the right to extract oil from the seabed of the territorial sea of Abu Dhabi, and whether that concession also extended to include the subsoil of any submarine areas lying outside the territorial waters, specifically what was later to be known as the exclusive economic zone (“EEZ”). At the time of the agreement, the concept of continental shelf exclusivity zone was unknown. Of particular note in this arbitration was the choice of law implemented. The arbitrator decided that British law did not apply to the jurisdiction and rejected Abu Dhabi’s Sharia Law, stating: “The Sheikh (sic) administers a purely discretionary justice with the assistance of the Koran; and it would be fanciful to suggest that in this very primitive region there is any settled body of legal principals applicable to the construction of modern commercial instruments.” [45] After this decision, legislative bodies in Islamic States looked extremely unfavorably on international arbitration as a process, and passed adverse and even openly hostile legislative acts concerning such arbitration. In addition, courts in those States interfered with those arbitrations that were duly accepted. The ramifications of this decision have reverberated throughout the modern world, and today the acceptance of international arbitration is only very slowly being incorporated into the Islamic world, primarily due to economic forces and globalization. [46], [47]

In 1964, the subject of rights to the continental shelf between the United Kingdom and France arose again in terms of delimiting each State’s boundaries in the English Channel and surrounding waters. [48] The arbitration board decided it did not have jurisdiction to determine the limits of the territorial sea of either country (thus not deciding on the English Channel boundary) and decided only upon boundaries concerning the Channel Islands and the surrounding Bay of Granville. Each party objected to technicalities in Article 6, Convention on the Continental Shelf. The parties eventually agreed to a median boundary line in the Channel itself, with the approval of the arbitrator.  This decision ultimately set precedent for actual standards of delimitation, as contrasted with the North Sea Continental Shelf Cases in the International Court of Justice, which decided on the applicable principles and rules of international law. [49]

In 1983, another boundary line dispute was submitted to arbitration, between Guinea and Guinea-Bissau stemming from a colonial boundary agreement between Portugal and France in 1886. [50] The court faced three questions, none of which involved carrying capacity of swallows. First, did that agreement establish maritime boundaries between these two countries, and was it still effective? If so, what effect do the protocols and documents of the time have on modern interpretation of that agreement? Last, based on the answers to the two previous questions, what is the actual boundary between these two States? Interestingly, this arbitration’s panel of three judges was from the International Court of Justice. The difficulties faced resulted from the tidal range of up to five meters, and the resulting arising of land that joined islands to mainland or island to island. The tribunal referred to the VCLT Articles 31 and 32 for interpretation of modern international law. It held that the 1886 agreement did not actually set forth a maritime boundary between the two nations (at the time colonies of Portugal and France) and that the international standard, later embodied into UNCLOS 1986, [51] of equidistance would have the inequitable effect of restricting the middle of the three coastline countries from exercising its territorial rights up to the high seas as otherwise permitted in international law. [52] This decision is notable for its broad range of criteria used in interpreting the treaty provisions of the original agreement and for its total non-reliance on the accepted international laws of the time for a method of delimitation.

In 1985, Canada and France took fish to arbitration. The dispute involved interpretation of Article 4(b) of the Agreement between Canada and France on their Mutual Fishing Relations. [53], [54] In this dispute, Canada had restricted French fishing vessels in the Gulf of St. Lawrence to the gutting and beheading of fish caught in the Gulf; however, French fishermen practiced complete processing of the catch from poisson sauvage into filets de poisson, processed fillets. This resulted in significantly more organic waste that was subsequently reintroduced to the Gulf waters. In 1986, the panel decided that Canada did not have the right to regulate fish processing in its EEZ — it could not prevent France from processing the caught fish, and the Agreement above did not create that right. This decision has a significant impact on subsequent decisions of EEZ fishing rights. [55]

Also in 1985, a more television-friendly spectacle led to an international arbitration and mediation in the matter of the Rainbow Warrior. The Rainbow Warrior was a New Zealand-flagged ship owned by the non-governmental organization Greenpeace, which sent the vessel to Auckland, New Zealand to protest ongoing nuclear testing by France on the (relatively) nearby Mururoa Atoll. [56] On July 10, 1985, an explosion damaged the vessel and it sank at the harbor. That fall, France confirmed that the Direction Générale de la Sécurité Extérieure, the French equivalent to the United States’ Central Intelligence Agency, had been directed to sink the ship to prevent further protests of and interference with the nuclear tests. [57] After much wrangling and negotiations concerning force majeure acts of France regarding the two agents who actually sank the Warrior, the result set significant precedent in international law. Most importantly, the negotiations resulted in the differences between the Law of Treaties (VCLT, q.v.) and the law of States’ responsibility as codified by the International Court of Justice. In addition, this case enunciates the fundamental position that every State’s international wrongful act entails the international responsibility of that State. [58] The case distinguished between instantaneous breach and continuing breach of a treaty or agreement and the remedies associated with each, discussed various remedies for State responsibility for wrongful actions, and disregarded “superior orders” by a nation’s government as a defense for the wrongful acts of its agents, reaffirming the Nuremburg Tribunal findings following the conclusion of World War II. [59]

Maritime rights reemerged into the arbitration spotlight in 1989, this time concerning St. Pierre and Miquelon, small islands off the Canadian coast that France claimed. The countries asked the panel to draw a “single line of delimitation for the purposes of both the continental shelf and the exclusive economic zone between the Canadian coast and the French islands.” [60] The words of the decision describe the situation best: “[T]wo very small islands belonging to France and situated very close to the Canadian coast, tucked into the southern coast of Newfoundland… close to shore, and wholly surrounded by what would otherwise be the Canadian territorial sea, continental shelf, and exclusive economic zone.” [61] This is very similar to the aforementioned 1964 decision concerning the English Channel. Both adverse parties took radically different positions on what should and should not be incorporated into the maritime boundaries of these islands. As none of the established methods for determining boundary lines was applicable, the panel devised a novel approach where each island had a corridor to the open sea as wide as the island (approximately 10 miles in each case) and extending to the limits of the exclusive economic zone. This example is not cited as a strong example of delimitation reasoning, but it does deprecate several alternative theories of delimitation that previously had been “hotly contested.” [62]

Finally, in 1992, Ireland and the European Union brought the MOX Plant Arbitration and Cases to court against the United Kingdom and Ireland, respectively. Of note in this complex set of litigations is the Law of the Sea tribunal that, without a common means of settlement agreement between the United Kingdom and Ireland, proceeded in arbitration as specified in the Annex VII, Tribunal of the Law of the Sea. [63] In short, the facts at issue were a Mixed Oxide Fuel (“MOX”) production facility’s reprocessing of spent nuclear fuel, export by sea of the finished product, and the subsequent, substantial risk of extreme environmental consequences from leakage. The primary take-away from this decision is the use of provisional measures in treaties, as used by the International Tribunal for the Law of the Sea, as a conflict-reducing device. [64]

Conclusion

From the earliest days of recorded law to modern interpretations of law never contemplated in antiquity, arbitration has served States in settling disputes when mere diplomacy fails and recourse to arms is undesirable. Disputes arising under Law of the Sea principles lend themselves to arbitration even more, with the situation’s inherent flexibility that moves with the tides. While alternative dispute resolution in the area of maritime rights has come a long way in the past two millennia, progress remains to be had, Global economics has inexorably woven together the fortunes of our world’s nations, and in the growing international awareness as our small, isolated villages have grown to be a planet-encompassing global village of instant communication and massive data. In the end, however, subverting human nature towards conflict into pacifist resolutions is the greatest benefit — as Abraham Lincoln has said, “Am I not destroying my enemies when I make friends of them?”

-Michael W. Harrington, Esquire

Christie McDonnell, JD Candidate 2012

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