Hi, everyone. My name is Erin Gleason Alvarez, and your host for today's program on Dispute Resolution Clauses That Make Sense. So, quickly by way of background, I am an arbitrator and a mediator. But before my neutral days, I worked as a litigator and as in-house counsel. And so, I've lived on all sides of disputes, and this really informs the way that I think about dispute resolution clauses. A dispute resolution clause is something that no one really wants to use, right? But if the need arises, you want that language to make sense. Now, I have seen plenty of clauses that were probably drafted with the best of intentions, but in the end could not be acted upon in a reality that any of us live in. So, the purpose of my presentation today is to provide you with the basics of dispute resolution clause drafting, along with some ideas for tailoring the process to suit the needs of a particular agreement and the parties to that agreement. Our objectives for today are the following. So, first to understand the differences amongst mediation, arbitration, and other ADR tools, along with considerations for when each is appropriate. We'll also get the chance to appreciate the options that are available to parties in drafting dispute resolution clauses, and then review some cutting edge approaches to dispute resolution that address party's common reservations when it comes to particularly arbitration. Lastly, pardon me, we'll consider expectations for mediator and arbitrator qualifications. Now, I included this last point because I think it's crucial to choose the right supports for the clause that you've crafted. The parties often complain that arbitration, for example, takes too long and costs too much money, or that mediators act more like carrier pigeons than skilled negotiators. So, these issues can often be pretty easily addressed when counsel makes better and more informed choices, and how the dispute resolution clause is crafted, and then who's selected to act on that clause. Let's start with a review of the different dispute resolution tools that are available to you. So, we'll briefly review the respective pros and cons amongst negotiation, mediation, and arbitration, along with some considerations for when each of these is appropriate. When considering dispute resolution tools, I think of it on the spectrum with litigation on one side and then negotiation at the other. So, while litigation is bound by rules and often engenders a more combative environment, negotiation is at the opposite end, right? So, there aren't really any rules to follow. And from my perspective, it simply works best when it's more of a collaborative nature. Mediation, mediation that can be combined with arbitration, and arbitration ultimately fall within these two pillars. So, as we move from left to the right from mediation and on over towards arbitration, the tools here get progressively less collaborative, generally speaking, and more bound by formality. Now, thinking of your options in this way can help to sort out the goals that you have for a dispute resolution process. Based on the type of dispute and the people involved, what do you need from ADR? Formal rules and structure or collaboration and creativity? On the collaborative side, negotiation is something we all do every day, whether at work or at home. Now, I don't think there's any art or science involved in this, it's really a way of communicating, and you likely have your own style and approach to these conversations already. Of all the dispute resolution mechanisms available to you, this one's probably the most accessible, the most efficient, and it has the potential to offer the most cost savings certainly. Negotiation can occur in the traditional sense, person-to-person discussions, and it can happen with or without the assistance of counsel. The benefits of relying on negotiation are many and perhaps a longer list than we have time to cover today. For now, the ability to identify a negotiation strategy and implement it early in the life of a dispute by involving as few people as possible, perhaps provides the greatest opportunity for cost control and efficiency on the dispute resolution spectrum. It also offers its constituents with the added bonus of crafting your own solution, right? There are no hard and fast rules here for what needs to happen, which can allow for all of the negotiators involved to feel more bought in or vested in the solution. And then lastly, it's most likely a confidential discussion, right, which may be a particularly important factor for the parties as well. Now, on the flip side, intransigent people, who are everywhere, can be hard to deal with. Impasse happens and can limit the potential for success in negotiations. Now, access to information, or rather lack of access to information can also impede these kinds of discussions. So, you can't properly value a dispute without access to more information and your counterparty is not readily offering that to you, you can get stuck. Finally, time can be an issue. It may be physically impossible given your caseload to spend the quality time needed to conduct direct negotiations yourself. Enter the mediation. Now, the difference here is that while mediation is also a negotiation process, it's a facilitated negotiation, right? So, here we have a neutral third party, the mediator, who's hired to help you sort through your dispute, right? So, to act as a devil's advocate, as a negotiation partner who's removed from the dispute and can serve as an advisor to you. A mediator is hopefully able to help you think through strategies for resolving the problem that was too difficult to get to in direct negotiations. So, while the mediator is present to help guide you, it's important to remember that they are not the decision maker, right? The mediator works for you and your counterparty, not the opposite. You make the decisions, they provide suggestions and guidance. At the end of the day, mediation is the party's process, not the mediators, so tell the mediators what you need, ask for help, and listen to their advice. Traditionally, most mediations occur in-person with the disputing parties and the mediator initially perhaps gathered around the same table and then shifting back and forth between meeting together and in individual caucusing sessions with the mediator, which are reserved for confidential discussions. Now, keep in mind that all of this has been happening for the past two years virtually as well, and is proceeding online at a much higher rate than I'm aware of in any past years. Whether we are in the midst of sort of a global health crisis or not, online mediation offers parties with the opportunity to convene conveniently, right? There's no travel expense involved or timely travel, technology now offers various options for doing this with ease. And it's entirely possible to make the connections and to read the room, so to speak, when you're in these virtual rooms. In these types of processes, the mediator guides the negotiations tailored to communicating efficiently online. So, perhaps this isn't right for every case, but certainly something that should be considered more often than it used to be. Many of the benefits of negotiation overlap with mediation. Now, in terms of cost savings, the opportunity to spend a day or perhaps a few days in defining your solution, as opposed to a much longer span of time in court or an arbitration. Mediation is also a confidential process, right? What happens in mediation largely stays there. It also provides the added benefit of guidance and advice from the mediator, who's there to help you more easily navigate the negotiations. So, mediation isn't right for every case, right? So, to the extent that you're working with a counterparty who refuses to proceed in good faith, who refuses to provide information you need in order to make informed decision about settlement decisions, or who treats the mediation like some kind of a contrived form of trial, these are all things that can hinder the mediation as a successful tool. So, lastly, getting stuck with a bad mediator can do damage to the party's relationship or more plainly just waste your time. We'll talk about this at the end of class and how to avoid that. In the end, I really think that there are few mediations that don't offer some value to the parties. Even where settlement is not achieved during the mediation session, you most likely walk away with a better view of any potential exposure, an enhanced understanding of how the other side sees the case, and insights on next steps from the mediator. For now, we're gonna move a bit further to the right on our ADR spectrum and over towards arbitration. So, I've included a section in here on mediation that's sort of combined with arbitration, and we'll talk more about this towards the end of the presentation too. Parties often forget that when they're in the midst of a full-blown arbitration, there's still room to negotiate. Right, mediation is still available to you in the midst of an arbitration, and it can really be an effective tool for minimizing the issues that need to go forward to an arbitration panel for award. Now, keep in mind that it's important to retain a separate mediator to help with this. The arbitrators should not be transformed into the mediator for the most part. You know, there's some legal cultures that do encourage such a practice, but it's usually not something that's condoned in the US. Concurrent mediation and arbitration present parties with the opportunity to sort of streamline the dispute resolution process. So, here, mediation is actually being used as a tool to drive arbitration efficiency. Adding mediation to the mix can be avoided or should be avoided if this would overcomplicate matters. Right, so in balancing the potential risks or rewards of mediating during an arbitration, the goal here is promoting efficiency. If the introduction of a mediated dialogue would somehow overcomplicate the proceedings, that defeats the purpose, right? So, the cost of adding the mediation may raise some eyebrows initially. In my experience though, fees associated with mediation are usually de minimis as compared to the amount in dispute and the amount that is being spent on the arbitration process. Okay, so onto arbitration. Arbitration is mainly a creature of contract, and that you likely find yourself heading to arbitration because a provision in the underlying agreement requires you to. Here, either one arbitrator or a panel of three arbitrators are selected to help design the process for your particular dispute, accept evidence, hear arguments, and ultimately, render an award that's binding. When the process is crafted properly and tailored to the types of disputes that you'll likely see under a particular agreement over the particular business partner, you have a much better experience and outcome than sort of swapping language from another agreement or cutting and pasting from somewhere online. When properly set up, arbitration can offer significant cost savings to the parties. It can be created to encourage efficiency. You know, you get to choose the rules that you think will be best, you choose the best decision maker to assist you. It's a flexible and confidential process that's binding, right? So, when it's done, it's done. Reservations over arbitration's cons are pretty prevalent, and I'm not here to dismiss these concerns outright. It can be expensive. You know, arbitrators can lose sight of process efficiencies. And in arbitration, unlike mediation or negotiation, parties really have little control over the outcome as the award is written by the arbitrator. In addition, there's limited appellate rights for arbitral awards, and this is certainly cause for concern for many parties. Okay, so finally litigation. Now, not every case is going to be eligible for mediation or arbitration. We know this, and I'm not going to belabor it here. Sometimes you need precedent or you need judicial intervention, right? By litigating the concerns over a largely unchecked arbitrator or arbitration panel are also avoided, your appellate rights are preserved. And in some jurisdictions, the cost of litigating may be significantly lower than anything you would see in arbitration. However, it remains true that there's little flexibility in most litigation processes. The parties have no say in the judge who's being assigned, and the process can be lengthy and pretty costly too. So, let's shift things over and look at a hypothetical dispute resolution clause, and then we'll dissect all of the many things that are wrong with it. So, here's our clause. In the unlikely event of a contract breach the problem will be addressed first by direct negotiations between Dr. Sam Owens and Dr. Martin Brenner. Now, if Owens and Brenner are unable to resolve the dispute via good faith negotiations, they'll submit their claim to a binding mediation process. The mediator must be from Hawkins, Indiana, admitted to practice law in Delaware, and have at least 57 years experience in the Space Force industry. The mediator must issue a mediator's proposal within 10 days. If either party disagrees with the mediator proposal, they may submit the dispute to arbitration. The parties agree that Jim Hopper will serve as the sole arbitrator. The Federal Rules of Civil Procedure regarding discovery shall apply, and the biting determination may be enforced in the state of New York. Right, so here's why I think this is a total nightmare. And mind you, I get that this clause is a little bit ridiculous, but elements of each of the problems that we're going to discuss, I've seen in other real life clauses, they're taken to a little bit of an extreme here in my attempts to provide some amusement to the audience. If you've watched the television show "Stranger Things", maybe this will be mildly more entertaining to you or maybe not. So, I did try to convince Quimbee actually that CLE credit could be dependent or should be dependent on you identifying my mildly amusing Netflix references here, but they didn't go for it. So, let's dig into this ridiculous thing. First, we'll talk about sort of wrong with this clause and then review the essential elements that need to be in an enforceable dispute resolution clause. Okay, so let's take this first sentence as a start, obviously. So, it begins with in the unlikely event. Now, while I understand that when a new relationship is forming, no one wants to talk about the possibility of a rift or, God forbid, a complete fallout and the need for an arbitration, but this language is just fluff, right? ADR clauses often end up being the lawyer's opportunity for a creative writing project and put in at the last moments of contract negotiations. Next element is in the unlikely event of a contract breach, so here highlighting the contract breach part. So, this is probably too limiting. You know, there may be plenty of other issues that arise under the contract in addition to the possibility for a breach of the agreement. So, by including this really specific language, you may have foreclosed your opportunity to pursue ADR for other types of disputes. So, generally, the language that should be included and I would advise being included is any controversy or claim arising out of or relating to this contract or the breach thereof. You know, this is a better way to ensure that you're getting the resolution process that you want. So, the sentence goes on to say, right, in the unlikely event of a contract breach, the problem will be addressed. So, will be addressed first by negotiations between Dr. Sam and Dr. Mountain, or Dr. Martin, excuse me. So, hopefully, you know by now that this Brenner guy is one scary dude, and I would never want to be across the negotiation table from him, let alone 500 miles radius from this guy. So, beyond that, what happens when Papa or Brenner, you know, gets killed in this stupid show, who's going to negotiate then? It is generally not a good idea to list specific people and instead list the roles that they play, right? People change jobs all the time or move on for many reasons and might be unable to perform the duties that you envisioned for them here. So, again, if Brenner is not there to handle the negotiations with Owens, you know, what happens to your resolution scheme? It's potentially jeopardized, and we don't want that. Okay, onward. So, if Owens and Brenner are unable to resolve the dispute via good faith negotiations, so good faith negotiations being the next sort of terms that I wanted to highlight here. And this, I have seen in a number of contracts and it's problematic because there's no real sense as to what a good faith negotiation would be. And one of the take aways that I would like to impress on everybody is that it's great to include a dispute resolution clause in your contract, but you want it to be very clear and the obligations contained within it very clear so that there's never any litigation around the dispute resolution clause. So, if party's negotiations fail, and there's a question as to whether there was good faith or not, you know, that's a possible hurdle that you're going to need to figure out how to jump in order to get to the next step in the process. So, putting this kind of language into a contract while well-intentioned can be kind of dangerous. Next is they will submit their claim to a binding mediation process. This I've also seen a number of times, and I don't know what it is. Mediation is at the end of the day, you can have a binding agreement, right, that results from the mediation, but a binding mediation in and of itself, you know, is not something that you should include in the contract, right? Because it makes it sound like the sort of the mediator has more power than they actually do. So, then onto our mediator, and again, this kind of language which relates to the specific requirements around the characteristics or the background of the mediator, I see often, and it also comes into play when enumerating what is required of arbitrators. So, our mediator here must be from Hawkins, Indiana, which I'm sure is a fine place if it actually exists, I don't know, but I get the sense that it's a pretty small place and I haven't seen a lot of lawyers there, so your pool has now been significantly diminished. In addition to that, your Hawkins, Indiana mediator must be admitted to practice in Delaware, right? So, there's a lot of admitted to practice in Delaware, particularly in commercial disputes. Again, that limits the number of people that you're gonna have to choose from when the dispute arises. And then lastly, has 57 years of experience in the Space Force industry. Well, sadly the Space Force industry hasn't been around for 57 years, and I'm being a bit facetious here, but this is another thing that parties put in this number of years experience that they want their mediators or arbitrators to have. I think that that raises significant issues, again, with limiting the number of people who are available to you for consideration. And secondly, I think I raises issues with regards to diversity, which we'll get in at the end of the program as well. So, next, our very unique mediator is ordered to issue a mediator's proposal within 10 days. So, must issue a mediator's proposal. I guess this goes back to sort of the binding nature of this mediation process if the output is a mediator's proposal. So, just quickly by way of background, a mediator's proposal is usually utilized where the parties have been in negotiations for a while and have reached an impasse, and may request of the mediator that they submit a proposal for the party's consideration as to how the mediator thinks the matter should be settled. Usually, again, this is done at the request of the parties, and it's not by any stretch a binding document. The other issue here is that the mediator's proposal must be issued within 10 days, but we don't know within 10 days of what, right? So, within 10 days of the mediator being appointed, within 10 days of the conclusion of the negotiation discussions of the proper mediation. This is another thing that I wanted to highlight because I think that oftentimes when we have these sort of tiered or step clauses, the length of time that is allowed for each step is not always thought out in a way that is practical, right? So, oftentimes we're thinking of efficiency, which is good, but it also has to be efficiency that's actually possible to be accomplished. And within this language, there's no trigger, so we don't know 10 days from what. Okay, so if either party agrees with the mediator's proposal, they may submit the dispute to arbitration. Well, obviously, somebody's not gonna like this proposal. I mean, you know, it could be a very artful Hawkins, Indiana mediator, who based upon their years of experience in the Space Force is able to put together a mediator's proposal that makes everybody happy. I've never seen such a thing, but then I've never seen a mediator like that either, so I suppose anything is possible. And then, they may submit the dispute to arbitration, so it's just this kind of language is so wishy-washy, you wanna make sure that there's no questions as to what the avenues are for resolving the dispute. Finally, the parties agree that Jim Hopper will serve as the sole arbitrator. Now, Mr. Hopper, actually Hopper, actually is in law enforcement, not a lawyer, and certainly not somebody that I would choose for arbitrator. That aside, this is another thing that comes up often. You know, the parties when contracting have an individual in mind who they both agree would serve as a good arbitrator. If this is a contract that is going to go on for the performance of the contract is going on for a number of years, it's sort of dangerous to list an individual in the role of arbitrator because they might not be doing that work anymore, something bad could happen to them. Personally, I think it's a big jinx, so please never do that to me. Okay, next also the Federal Rules of Civil Procedure regarding discovery shall apply. You know, from my perspective, this is not a sentence that belongs in any arbitration clause. We are in arbitration in order to avoid this, right? And there are plenty of ways to sort of look at the institutional rules or even to develop a very carefully crafted ad hoc process for discovery, but defaulting to the Federal Rules of Civil Procedure is not best practice. And then finally, the binding determination may be enforced in the state of New York. Well, usually you want the binding determination to be enforced in any state that has jurisdiction, right? So, to the extent that something happens, it is not possible for this award to be enforced in New York, I wanna make sure that there's somewhere else that you can go. So, here's a little more on what we want to avoid here and kind of the point of this discussion, right? You never want to have litigation over the dispute resolution clause. So, the Federal Arbitration Act, which was enacted 1925, many moons ago, but it represents really a broad public policy favoring arbitration and requiring the enforcement of arbitration agreements precisely as they are written, right? And the Supreme Court has consistently required that the Federal Court supply the FAA rigorously to enforce agreements to arbitrate. The FAA ensures that private arbitration agreements are enforced according to their terms. And parties may agree to limit issues subject to arbitration, or to arbitrate according to specific rules, or to limit who a party can arbitrate its disputes with, right? So, if these things are not clear, it can lead to significant problems. And if your focus in including a dispute resolution clause in the contract is for cost savings or efficiency, then that clause needs to be pretty clear so that you don't end up in court wondering what your obligations are. Now, before we get to the elements of an ADR provision, note that many of the elements that cause concern are already addressed in many arbitral rules, right? So, issues from arbitrator selection, the information exchange, emergency measures of protection, interim measures, all of this is covered in most of the institutional rules, right, so this is the AAA, the CPR Institute, the ICC, the ICDR, and so forth. So, if you agree with the rule provisions, you don't need to rephrase them in the clause, and it's much simpler if you don't. Most parties opt for administered arbitration, right? So, this is where it's guided by the rules of an arbitral institution, like those I just mentioned. Now, sometimes if the parties are particularly sophisticated, they may wish to contract for ad hoc arbitration. So, this is a process that's not administered by an institution and requires that parties make their own arrangements for rules, arbitrator selection, procedures, and administrative support in terms of billing and scheduling, for example. So, with all of that in mind, let's review the basic elements of an arbitration clause. And after that, we'll review some nuances to consider before including negotiation or mediation steps to the just dispute resolution clause. First, arbitrability, this means the types of disputes that may be arbitrated right? So, in our hypothetical, this was limited to breach of contract claims, but more often you'll likely see language that's a bit broader as we discussed before. Right, so any controversy or claim arising out of, or relating to the contract, or the breach thereof. So, this type of language helps to ensure that any dispute relating to the agreement can be referred or will be referred to arbitration. Now, of course, there may be circumstances in which you wish to restrict the types of claims that may proceed to arbitration. My word of caution here is to be sure you are abundantly clear on this in the plain language of the agreement, and clear on your intention for segregating out different types of claims for different types of processes because it can get a little bit messy. So, next is binding. So, for avoidance of doubt, I have always added in that any controversy or claim arising out of, or relating to this agreement, or the breach thereof shall be resolved by binding arbitration. Right, so finality here is paramount. In an arbitration process, we don't want there to be any question. Next is the law. So, the law governing the arbitration is often lost in the clause, and then later the job of the arbitrator to define. So, your contract will likely have a choice of law provision, but you should also indicate the law that governs the arbitration process. So, whether that's state law, the Federal Arbitration Act, or an international jurisdiction. Now, to the extent diverse parties are involved, or the contract calls for international arbitration, language, or the proceedings, that also needs to be specified. In the US, state law approaches to arbitration practice do vary from jurisdiction to jurisdiction, and might impact any future applications that an award be voided, for example. So, as such, this is an element of the clause that certainly does require attention and specific mention. Next is the place, so where the arbitration will be held should be agreed to in advance. This is particularly important for international or even intrastate arbitration. Okay, next the arbitral rules. So, care should also be taken in specifically mentioning the rules you would like to guide your arbitration. Stipulating that arbitration will be administered by the AAA, for example, is not enough. The AAA maintains several sets of completely separate and distinct arbitration rules. You should specify the rules that you want the arbitration to proceed under in addition to the institution that you've selected. In referencing arbitral rules, you have the choice to opt for rules then in effect or in effect at the time of the dispute. So, the question here is whether you wish to opt into the rules before, right, so when you're creating the clause or whether you wish to arbitrate under a future updated version of those rules. Next is the arbitrators. So, there are a number of factors to consider here. Remember that most arbitration rules provide a default mechanism for selecting arbitrators. If you agree with it, you don't need to rephrase it in your clause, just keep it simple. Institutions likely ask you about the qualifications that you're looking for before the selection process begins. So, unless you're in some technical area or have a very specific need when it comes to arbitrator qualifications, think long and hard before you make a trap for your friends who will have to arbitrate this dispute, you know, probably years into the future. When it comes to arbitrators, you want options, so, again, picking one person is not best practice in my opinion. That person could buy a truckload of stock in one of the companies that are involved, become incapacitated, become too busy, and require you to delay the proceedings far past your comfort level, right? The list for not doing this could go on and on. So, how do you select an arbitrator, and do you need to sort of mention this in the clause? So, here are some standard processes, and most of these are already included in the arbitral rules. Strike lists is the first. So, many lists or, excuse me, many rules call for the institution to provide a list of candidates for the parties to consider for serving as arbitrator. So, here an identical list is sent to each side who then have the chance to strike the names of any objectionable arbitrators. And those arbitrators remaining on the list thereafter are ranked in order of preference by each side and then each side returns their selections to the institutions. If there's a match, we have a winner. If there is not a match, the exercise is either conducted again, or the arbitrator with the lowest cumulative number is appointed and sort of depends on the rules. Now, keep in mind, if you receive a list with no suitable candidates, you can usually appeal for a new list. In addition, most institutions promise that the list that they send to parties will meet some diversity requirements. So, for example, 30% of the individuals listed must be women of people of color. When I was in house and I received a list that was not diverse, I sent it back for this specific reason and I encourage others to do so as well. Onto confidentiality. So, many people assume that arbitration is necessarily confidential, and it's not. Some rules specify that all arbitrations administered are confidential, but not all of the rules do this. So, for avoidance of doubt if this is a concern to you, include that the process must be confidential in your clause. So, this discussion has mainly contemplated creation of a process at the outset of a contract. However, parties can contract to arbitrated dispute at any point in the relationship so long as everybody agrees. Now, let's talk about tiered dispute resolution clauses, or step clauses as I call them. The options here are having sort of a progression of different mechanisms for resolving the dispute. First, negotiation or mediation followed by arbitration. You could also have a little bit of a longer process, which is negotiation followed by mediation, and then ultimately arbitration, or we could have a simultaneous mediation and arbitration process. Here are the most important considerations in drafting a stepped ADR clause, right, one that proceeds from one stage to the next. As an initial step, you may wish to design the process that commences with a negotiation between stakeholders, or you can go straight to the mediation, right? So, in thinking about the negotiation element, indicate the roles of the people who should be involved in these negotiations, not the names. Right, so is it the CEOs, or the general counsel, or some other individuals responsible for the day-to-day functioning of the relationship who have similar responsibility levels that need to be involved in this discussion? And then, how much time do you wanna allow for this step? You have to specify it or this could go on forever, right? So, some negotiation processes or I'll see in some contracts, you know, negotiations may be ongoing for 60 days unless the parties mutually agree otherwise. You need to specify what triggers the next step, right? So, how will you know when the negotiation succeeds or fails? Often, this first stage in the process is concluded when the parties mutually reach a settlement of the dispute or when one or both of the parties request that they proceed to mediation. In the mediation step, you should also include a timeframe appropriate to the types of disputes likely coming under the agreement. Now, here you may wish to rely on an institution's mediation rules, which will outline the timeline for selecting a mediator, you know, the process for submitting briefs, the amount of time that's allowable for the whole mediation process, et cetera. Now, experts in the field have put a lot of thought into these processes. And I think makes a lot of sense to find the rules that are most appropriate for you and reference them in your contract instead of writing sort of five pages of a mediation clause, which is usually not helpful, however well-intended. The important things to remember here are the timeframe for selecting the mediator from the date the party gave notice of its request for mediation, the timeframe for mediating after the mediator is selected, and then the timeframe for determining whether arbitration will be necessary. Now, less frequently but growing in popularity is the possibility of contracting to mediate at the outset of the arbitration. So, instead of creating a stepped process, mediation and arbitration start at the same time. And the theory here is that the arbitration can proceed if needed as a backstop, but there's no delay in initiating settlement negotiations. Here are some additional considerations that you may want to consider in drafting a dispute resolution clause. So, first, the appellate process. You know, to the extent that the finality of arbitration is more a headache than a comfort, most arbitral institutions do provide appellate mechanisms. So, here a new panel of arbitrators would be constituted at the conclusion of the arbitration and at the request of one party. The appellate panel is the final stage in the arbitration. So, this practice is relatively rare, but if your clause includes an appellate option, you should probably plan for that to happen. Few arbitrations actually result in split babies, someone often loses, and that someone will likely ask for an appeal if they're unhappy with the award and the clause allows them to. Next is the purview of the arbitrator. Some contracts limit what an arbitrator is empowered to award. So, for example, the types of damages that they're permitted to award or motions they may or may not entertain. Approach to discovery is another thing that you might want to consider. You know, whether it's a limit on the number of depositions that are taken, limits on the documents that can be exchanged, or the time permitted for the discovery process or for the entire arbitration process. On costs and fees, parties may also wish to include fee shifting provisions in the clause. And then, again, with regards to time limits, you know, time limits can be placed on the time allowed for the arbitration process as a whole, the time allotted for hearing, or the time allowed for arbitrator to write the award after the close of the proceedings. A quick note on multiple contracts. So, if you have multiple contracts relating to, let's say, the same investment, or transaction, or something along those lines, you may wish to consolidate the related contracts dispute resolution provisions so that you don't have five simultaneous arbitrations relating to the same incident, but perhaps covered under separate contracts, right? So, under these circumstances, all of the dispute resolution provisions should mirror each other and make reference to all of the other agreements and the contracting parties that are involved. My final word of caution here in terms of tailoring the arbitration provision is to really be thoughtful and careful in drafting it. Now, while these enhancements can offer significant opportunities for efficiency and for cost savings, they have to be included in really clear language. You know, I have received 10-page arbitration clauses which no human could possibly act on. You need to tailor the clause as needed, but sparingly because most of the rules already address the concerns that you're trying to craft your dispute resolution provision around. So, with that caution in mind, let's talk a bit about some cutting-edge dispute resolution mechanisms that may be of interest and that you can also contract for. So, one of the greatest benefits of mediation, as we discussed, is the flexibility that it offers parties, right? There's flexibility in the mediator selection process, how the parties work with the mediator to pursue their productive negotiations, and creating a mutually agreeable solution. So, there's also flexibility relating to the timeframe within which the parties would like to mediate. And so, far as mediation could be initiated at a time most appropriate for this dispute and can proceed on a schedule that the parties agree on, right? But the problem is that the timing of mediation is often rendered somewhat inflexible, right? When the parties contract for these multi-step dispute resolution provisions, like we just talked about, where the timeframe within which the mediation must be initiated and finalized is prescribed well in advance of this dispute happening and outside of the context of the specific dispute. So, while the tiered dispute resolution clauses may achieve the objective of getting parties to the mediation table, these provisions don't always assist parties in actually achieving the goal of having a productive mediation at an ideal time in the life of their dispute. So further, requiring mediation as a prelude to arbitration can prolong the dispute resolution process if the mediation fails or if the parties believe that their only recourse is to pursue the arbitration to a final award. So, here we have the concurrent mediation and arbitration process, and this really reflects the realization that through disclosure processes the parties in arbitration inevitably gain additional information that can allow them to better assess the strengths and weaknesses of their respective cases. So, having a parallel and ongoing mediation means that parties always have an opportunity as they continue to reassess to their positions, you know, to explore mutually agreeable solutions with the assistance of a mediator and to avoid having this sort of imposed upon timeframe around them. So, the clause carries the additional advantage, the concurrent arbitration and mediation clause, that any settlement that's reached in mediation can be entered by the arbitration tribunal as a consent award. It's also important to know, I think, that the neutrals for the two processes are different, as we talked about earlier in the presentation. And important that there be no confusion around the roles that the arbitrator is playing and the mediator is playing, right? The mediator is almost serving as a quasi project manager and sort of checking in with the parties throughout the process to make sure progress is being achieved, the arbitrators remain on their own separate track. So, just quickly, this is how it works. So, following the commencement of an arbitration, if the parties have opted for this type of a process in their contract, then they would notify the institution that the contract, or excuse me, the concurrent mediation and arbitration clause had been triggered. After that, the mediator, and once the mediator and arbitral tribunal have been appointed, they can confer with each other with regards to scheduling only to facilitate timely and efficient mediation, right? But putting the mediator in this sort of non-traditional role of managing the process. The tribunal is not informed of any settlement offers or other statements being made during the settlement negotiations or the mediation between the parties, unless the parties consent for that to happen. So, by building mediation into the arbitration process here, there's no delay in exploring settlement options and no need for concern by either party the proposing mediation might be some showing of weakness. Instead, the party's contract to ensure that mediation is a necessary part at the process and will commence at the inception of the arbitration. So, if this process is of interest to you, then I would suggest going to the link that I have listed in the slides, cpradr.org, where they have model clause language and other sort of best practice materials to provide you with more information and context around this. Next is dispute boards or standing neutral. So, dispute boards, also known as standing neutrals or adjudicatory boards, are panels that are set up to accompany either the formation or the performance of a contract. They also assist in avoiding or overcoming disagreements and disputes. Now, a variety of dispute resolution institutions offer rules to inform how these systems can be set up in various different contexts. The existence of a pre-selected dispute board or neutral who's familiar with the business relationship between the parties and its progress, you know, avoids many of the initial problems and delays that are involved in selecting or appointing neutrals after the controversy has arisen. The ready availability of a standing neutral and the speed with which she or he can render the recommendations, and particularly the fact that this neutral will hear every dispute which occurs during the history of the relationship so long as their services remain effective, all of this provides really powerful incentives for the parties to deal with each other and the neutral in a timely and frank manner, and by discouraging any kind of game playing or dilatory tactics and taking extreme and unsupportable positions. In practice, the nature of this process is such that the mere existence really of the neutral almost always results in minimizing and often eliminating the number of disputes that have to be presented to the neutral ultimately. So, even though there's some expense involved in the process of selecting, and then appointing, and initially orienting, and periodically reporting to the neutral, you know, the costs are relatively minimal even when the neutral is called to resolve disputes. And dispute boards are perhaps most well known as an aid in construction projects. However, it's also used as a tool in ensuring that there's a member of a corporate board of directors who's attuned, attuned to anticipating and resolving conflicts within the board, or with shareholders, or even corporate officers. I've seen it used to address issues as they arise in structuring M&A agreements and in the management of supply chain contracts. The last set of options in thinking about ways to really streamline the arbitration process are listed here. So, first, only allow for specific issues to be arbitrated, keeping in mind the caveats that we talked about earlier, that this, if it isn't very clear, can become a bit of a messy process as to which types of dispute under the contract are arbitrable and which are not. You can also put caps on the information exchange, you can offer an expedited arbitration process. So, most arbitral institutions have a separate set of rules that provides for an expedited arbitration where the arbitration must be accomplished within a finite period of time. And so, if this is of interest, you would like to or you should look at the rules of the arbitral institution and then decide which best suits the contract at hand. Think about whether there is a need for appointing one arbitrator instead of three, which can significantly cut the costs involved in the arbitration process certainly. You can limit or forbid motion practice, limit the opportunity for extensions within the context of the arbitration, impose time limits, and most institutions offer model clause language on all of these issues. So, let's turn now to neutral selection because in order for any of the efficiencies that you've created in your contract to be realized, you need to select the right mediators and arbitrators. So, here are some considerations First with regards to mediators, you know, what do you know about the mediator's background. For this particular dispute, is it important for the mediator to be a lawyer, to be a lawyer within a specific practice area? Are you looking for someone who has a judicial background? And really when thinking about these things, I think it's not only important to sort of make a list of the qualifications that you think are important, but also to understand why each of those things is important. You know, are you able to research the mediator's reputation? And this is through a couple of different channels, you know, you can sort of certainly get references from people that you know, but also doing your research online. You know, how does this mediator put themselves out into the world? What are they talking about? What are they writing about? You know, where are the organizations that they spend their time? And what does that tell you about their sort of approach to their practice and their approach to their cases? You know, is it possible to get information about their negotiation style? Remember, that mediation also is an ex parte process. Whereas, it's a little bit trickier to have a pre-appointment interview with an arbitrator, not impossible, a little bit trickier. With a mediator, you can certainly call them in advance and ask them any questions that are important to you. I think it's also really important to consider the diversity of the candidates that you are considering. Having diverse perspectives in the room, and different people, and providing opportunities to people who are consistently left out of the practice is really important. Next, what do you know about the person's personality? And this can be taken from the telephone call as well. You know, some of these mediations, you can end up in a room with a mediator for many, many hours, so you want to like that person. Lastly, what are their fees? You know, if it's a $20,000 dispute, then you probably don't wanna spend $20,000 a day for the mediator, so it's important to know what their fees are as well Onto arbitrators. So, there's a little bit more data that's available when it comes to arbitrator selection. So, resources online like ArbitralWomen, the ERA Pledge, Arbitrator Intelligence, these are all places where you can go to find out information about arbitrator's background. Some of the institutions actually list anonymized awards, so you can get access to an arbitrator's writing and the manner in which they put together and sort of think through these issues. Conflicts certainly important in mediation and in arbitration, but easier to sort of wave in a mediation context where the mediator is not a decision maker. Conflicts on the arbitration side certainly become a much more onerous undertaking and should be considered by the parties at the outset. We talked about reviewing prior awards. And again, with regards to diversity of candidates, I think it's so important, and particularly for people who are listening and who are in house, you know, the greatest opportunity to drive change in the legal profession in terms of diversity and mediator and arbitrator candidates rests with you. I have sat in your seat, and so I know this well. You know, across the profession, I think that diversity remains an issue across the legal profession. In mediation and arbitration, it hasn't even started. So, what do you know about their personality? Again, this is a tricky one, you can't call an arbitrator for the most part. There are some rules around it, but it's a completely separate CLE. But there are ways to get to know people. You know, when I was in house, I saw it as part of my job to educate myself about all of the different mediator and arbitrator candidates who were out there. And so, when people were speaking at conferences, and giving presentations, and just attending social events, I always listened to how people presented themselves and sort of what was important to them because that gives you great insights and to how they perform and how they conduct themselves as an arbitrator. And then lastly, with regards to fees, the same concern here, you know, you wanna make sure that the fees of the arbitrator are in proportion to the dispute at hand. So, this concludes our presentation for today. Thank you very much for selecting this CLE to listen to, and I hope that it was helpful to you. I'm happy to answer questions if you have any. And really for me, the take away at the end of the day is that the dispute resolution clause in a contract is really such a critical element of the agreement negotiations. It's not something that needs to be saved for the end of the agreement for fear of raising the possibility that something could maybe go bad further on in the future. It's not a sign of weakness, it's really being practical. And so, thinking in advance with your counterparty about what type of process you would like to construct and being thorough about that and really clear, I think we'll put you on a much better path than sort of what many of us see in practice now, which are really either very lengthy clauses that are well-intended, but not necessarily well thought out, or clauses that don't give us enough direction. So, thanks again for listening.