There were no cases of particular interest in the last couple of days. So, today “Highlights” takes a look at some recent literature.
During the COVID pandemic, remote proceedings were the only practical way to move dispute resolution forward. As we move back to an in-person world, legal scholars are evaluating the effectiveness of ODR. The Spring 2023 issue of the Stetson Law Review takes a valuable look at that process.
Two data-driven articles focus on FINRA as a model. Both are richly footnoted and are valuable, not only to scholars and arbitration nerds, but to practicing counsel who have to make decisions regarding remote arbitration.
In one¸Professor Jill Gross of Haub School of Law at Pace University does a deep dive into FINRA customer arbitrations from March 2020 through mid-2022, Gross, Article: Post-Pandemic FINRA Arbitration: To Zoom or Not to Zoom, 52 Stetson L. Rev. 363 (Spring 2023). The article provides a useful set of charts showing the differences among “wins” for claimants annually from 2016 through 2022, along one showing the discrepancy in “win” rates when the process was totally in person versus those involving at least one Zoom hearing. The article cites to another study by Professor David Horton, who analyzed four different forums and concluded that “’forced remote arbitration’ results in what he terms the ‘remote penalty’ statistically significant worse outcomes for plaintiffs arbitrating the merits hearing via videoconference as opposed to in-person.” (Quotation from Gross article) While she concludes that the “actual data is inconclusive,” Professor Gross lays out potential reasons for the difference in results. Regardless of whether counsel represents a claimant or respondent, the data and analysis in the article is an important read before deciding whether to agree to on-line arbitration. The article is available on LEXIS at ARTICLE: POST-PANDEMIC FINRA ARBITRATION: TO ZOOM OR NOT TO ZOOM? (lexis.com)
A second article in the symposium issue looks at FINRA remote arbitrations from a different slant, Iannarone, Article: A Model for Post-pandemic Remote Arbitration?, 52 Stetson L. Rev. 393 (Spring, 2023). Rather than focusing on the results of the hearings, Professor Nicole Iannarone of Kline School of Law at Drexel University looks more at the extent to which the structure of FINRA remote hearings results in party satisfaction with the process. She reports, for example, that 74% of respondents to a FINRA survey, including 91% of arbitrators, “reported a positive experience in the forum. . . .” In addition to concerns with COVID exposure, which may now be behind us, parties and arbitrators appreciated reductions in the cost and “issues” arising from travel to the arbitration site. The article describes in depth the process in which FINRA engaged in developing remote arbitration. Extrapolating from her findings and the survey results, Professor Iannarone suggests that, “in order to ensure that remote justice is still justice,” arbitration forums considering “changes to arbitration rules” provide transparency, seek stakeholder feedback, and engage representative stakeholders in the process. The focus of the article is on the development of formal systems of remote arbitration; however, for arbitrators and practitioners who are trying to put together an ad hoc remote arbitration, Professor Iannarone’s discussion of a variety of important considerations is valuable. You can find link to it at ARTICLE: A MODEL FOR POST-PANDEMIC REMOTE ARBITRATION? (lexis.com)
Professor Sarah Cole, the Chair in Alternative Dispute Resolution, Moritz College of Law at Ohio State, and Amanda Spangler, a 3rd year student there, consider the pros and cons of virtual mediation, Cole and Spangler, Article: Virtual Mediation: The Only Door Needed in the Multi-Door Courthouse?, 52 Stetson L. Rev. 477 (Spring 2023). They report significant advantages to on-line dispute resolution (“ODR”). Scheduling is far easier; breakout rooms allow effective caucusing; there are obvious savings in the cost of travel; and a potential exists to reduce intrusive power dynamics. Balanced against these benefits, they report the discomfort that some individuals may have with internet confidentiality; equal access issues that are created by a need for technology; difficulties in evaluating non-verbal communications; and, in the words of a case which the authors cite, “being present at the negotiation table facilitates mediation because the parties are physically confined with each other . . . and invest a significant amount of energy to attend mediation,” see Genreis, Inc. v. Brown, 2022 U.S. Dist. LEXIS 126930 (D. Neb. July 18, 2022). The authors provide the results of a survey by the National Academy of Distinguished Neutrals which found that 74% of the litigators surveyed “expressed a desire to attend at least 50% of future mediations and arbitrations on-line.” Weighing all these factors, the authors conclude, not only that is ODR beneficial, but that “virtual mediation should be the presumptive choice for parties seeking an alternative to litigation for dispute resolution.” For anyone interested in ODR, this article is not only thoughtful in its own right, but is a valuable resource for finding other literature; the footnotes cite approximately one hundred references. It’s available at ARTICLE: VIRTUAL MEDIATION: THE ONLY DOOR NEEDED IN THE MULTI-DOOR COURTHOUSE?, 52 Stetson L. Rev. 477 (lexis.com)
Standing in International Arbitration
When a sovereign is a party to an international arbitration, how should the arbitrators decide whether counsel really represents the nation? Fritz Kainz, a Judicial Trainee at the European Court of Human Rights, addresses the issue in Note: A New Approach to Status Determination in International Arbitration? A Comparison of Larsen v. Hawaiian Kingdom and the Disputes Concerning Venezuela’s Representation before ICSID Tribunals, 63 Va. J. Int’l L. 289 (Winter, 2023) https://static1.squarespace.com/static/5f0a3654a47d231c00ccd14f/t/642215995b3b441969425c17/1679955354174/63.2_Kainz_Note.pdf
The article is a complex analysis of two cases and addresses in depth their alternative approaches to deciding whether a party is properly before the tribunal. In one case, the Claimant was the “Hawaiian Republic,” and the panel was asked to determine whether the Republic really represented the islands, which are normally considered to be a U.S. state. In the other matter, Venezuela was involved in a dispute over whether Juan Guaido or Nicolas Maduro was the duly elected President of Venezuela. Maduro had defeated then-President Guaido in a disputed general election, but the National Assembly refused to seat him and Guaido claimed to retain the Presidency. Venezuela’s Supreme Court, in turn, invalidated the National Assembly’s actions. Sixty states and several intergovernmental organizations continued to recognize Guaido. In a series of cases before ICSID, attorneys appointed by Guaido’s government claimed the right to represent Venezuela, replacing those appointed by the Maduro regime. Therefore, the arbitrators were faced with the issue of who actually could serve as Venezuelan counsel in a “dual government” context. After analyzing the cases in depth, Kainz concludes that the ICSID model for resolving such issues provides an appropriate guide. Under that format, which was applied in the Venezuela cases, the panel determines jurisdiction before deciding whether to admit the case for consideration; views effective territorial control as a relevant consideration; and avoids “long-winded proceedings in which the status of the parties is in continual limbo. . .” Conversely, Kainz argues, in the Hawaiian Republic case, the panel “went through legal contortions to avoid facing the Hawaiian Kingdom’s statehood claim,” postponing that question until the merits stage. The ICSID framework, he concludes, is “not only procedurally and legally sounder, but also preferable on a policy basis.”
The audience for the article may be limited. But for those working in international arbitration, Kainz’s work is a valuable weekend read, and, as governments rise and fall and the stakes in investor state arbitrations get greater, those counsel should be sure that they can find this article when they need it. They probably will.
After all the deep and heavily footnoted literature above, Michael Balmages’s article on the mediator’s development of rapport with the parties is a great break. Even the title sets the tone, Balmages, Feature: Wimpy Mediators Versus Kick-Butt Mediators, 65 Orange County Lawyer 46 (April 2023). The author describes a mediation in which one party, from the get-go, wanted him to “immediate[ly] inform plaintiff how evil he and his lawyers are and how bad his case is. . . “ Rather, Balmages spent eleven hours working with the parties, and the case settled. The article is a reminder that mediation takes time and persistence. It is witty analysis of what neutrals do at our best. Link to the article at FEATURE: WIMPY MEDIATORS VERSUS KICK-BUTT MEDIATORS (lexis.com)
Registration is still open for the Spring Meeting of the ABA’s Dispute Resolution Section, the largest annual gathering in the U.S. of neutrals and those who appear before them. It runs from May 10th to May 13th in Las Vegas. In addition to networking with colleagues, you get continuing education from top practitioners. Register at https://web.cvent.com/event/210c8b81-b923-4888-9cf6-4645447830ba/summary
Have a good week. Here in Connecticut, we’re celebrating Quinnipiac University’s championship win in the Frozen Four. Go, Bobcats.
David Reif, FCIArb
 I have provided links to the articles, but LEXIS is behind a paywall. Stetson Law Review has some issues on-line https://www2.stetson.edu/law-review/ ; however, these articles have not yet been posted.