february/march 2016


EU Retail ODR Platform Goes Live

A long anticipated European Union (EU) initiative to offer Online Dispute Resolution (ODR) for commercial disputes across countries took a major step this month. On February 15, their Online Dispute Resolution platform, providing a venue for both consumers and merchants to submit complaints related to commercial disputes, went live. Authority for the platform comes from a 2013 piece of EU legislation, which notes that, “ODR offers a simple, efficient, fast and low-cost out-of-court solution to disputes arising from online transactions.” The EU has signaled that they are taking a gradual approach with the initiative: several member nations, including Spain and Germany, have not yet adopted the platform, and one attorney with expertise on the platform has stated, “At this stage, the European Commission is still interested in getting consumers and businesses to buy into the process.” 

Arbitration Clause Cannot Prevent Application of Federal or State Law, Rules 4th Circuit

In Hayes v. Delbert Services Corp., No. 15-1170 (9th Cir. Feb. 2, 2016), the Fourth Circuit Court of Appeals deemed unenforceable an arbitration clause that rendered the dispute “subject solely to the exclusive laws and jurisdiction of the Cheyenne River Sioux Tribe” and that “[n]either this Agreement nor Lender is subject to the laws of any state of the United States of America”. The arbitration clause in this case was inserted into payday loan agreements by a lender owned by a member of the Cheyenne River Sioux Tribe. While the Court recognized the Federal Arbitration Act’s authority and “strong federal policy in favor of enforcing arbitration agreements,” they ruled the agreements were unenforceable due to a lack of arbitrability. Key to the Court’s ruling were its findings that: the Sioux Tribe’s governing authority did not recognize arbitration; the Tribe lacked any appointed representatives who conducted arbitration under Sioux law; and the Tribe lacked a method to appoint such a representative. The defendant, the Court ruled, could not therefore circumvent applicable state and federal law through an illusory and invalid arbitration process.


Mediator Training Event Explains New Rules, Addresses Complicated Situations

On February 24, RSI hosted a training event in Waukegan, Illinois for our mediators in the Lake County Residential Mortgage Foreclosure Mediation Program. A dozen participants attended the half-day program, which included several presentations, mediation demonstrations and a panel portion. The goal for the day was to both acquaint mediators with recent changes to the program, and provide strategies for dealing with difficult situations that have come up repeatedly for mediators during the program’s two years of operation.
The day began with remarks and a presentation about new local rules and mediator standards from Nineteenth Circuit Court Judge Mitchell Hoffman. Those new rules, which went into effect January 4, were largely aimed at boosting program participation. While the program has had tremendous impact for those homeowners and their families that did complete it, the number of participants has been lower than what the court, RSI and their partners have wanted.
“Sixty-six families have stayed in their homes,” noted Judge Hoffman. “You have to realize how important it is for those families and those communities.” He went on to say, “We haven’t had enough mediations. We’re not satisfied, because we want to serve as many homeowners as we can.” It was precisely this motivation which led RSI to consider how to decrease barriers to entry.
In the end, the Nineteenth Circuit, on RSI’s recommendation, decided on a handful of measures to facilitate participation: requiring lenders’ attorneys to notify the program coordinator of filings more quickly; extending deadlines; allowing homeowners to complete an introductory screening via telephone rather than attend an informational session in person; and developing a checklist plaintiffs must submit to mediators to streamline proceedings.
Judge Hoffman praised RSI for its role in developing the rules. “RSI frankly has been critical. They can look at all the numbers, analyze the trends, and come back with suggestions on how to improve the program. And they’ve done that.”


Following Judge Hoffman’s presentation, Program Coordinator Olga Kordonskaya briefly went over procedural changes to the program. Then, RSI Executive Director Susan Yates led an interactive demonstration in which RSI staff members simulated portions of mediation sessions. Participants asked questions and provided feedback during the demonstration, allowing Yates and the RSI staff to provide detailed suggestions about best practices in specific situations.

After an intermission, participants came back and were treated to an engaging presentation by Professor Alan Boudreau of the Northern Illinois University College of Law on the proper role a mediator should play in providing information to parties without advising them. Boudreau began by noting the inherent difficulty many mediators face when they see an unrepresented homeowner across the table from a lender's representative and attorney: “For the lender, this is a business agreement. For the borrower, it’s about overcoming hardships and the personal impact of losing their home.” With this framework in mind, Boudreau delineated the boundaries of appropriate information mediators could provide without abandoning their position as neutrals.
The final event of the afternoon was a panel that brought together attorneys who represent homeowners and lenders with a housing counselor and Kordonskaya to discuss “things they wish mediators would do.” These speakers provided mediators with insight into the issues they as program stakeholders grapple with inside and outside of the mediation room, in hopes of better informing how they can address the parties’ needs.

Kordonskaya said the event was a great success. “It was wonderful to bring so many talented and knowledgeable individuals together to have great discussions with experienced mediators. I think it showed the importance and complexity of the work we’re doing here. It was very rewarding to get positive feedback from all the participants and hear that they got a lot of out of the training.” Building off this success, RSI will now look to develop similar trainings for other foreclosure mediation programs in Illinois.


Mediating Early Leads to Settlement

As the saying goes, timing is everything. While it might not be everything in mediation, it is an important factor in its effectiveness. Three empirical studies all found that mediating early is more likely to result in settlement than waiting to mediate later in the litigation process. Roselle Wissler found in her study of civil cases in Ohio that cases mediated sooner after filing were more likely to settle, and cases mediated late in the process were less likely to settle.
Heather Anderson and Ron Pi found a similar correlation in their evaluation of the early mediation pilot programs in California. They calculated that those cases that went through the pilot program in Los Angeles County were 30% more likely to settle than those cases that participated in an existing mediation program in the county in which mediation was typically later in the litigation process.
The most convincing evidence comes from a study of mediation in Slovenia. Peter Grajzl and Katarina Zajc found that cases mediated before the first court hearing were 170% more likely to settle before that hearing than similarly-situated cases that did not mediate, while those that were mediated more than 500 days after filing were only 70% more likely to settle before the next hearing. The trend toward lesser likelihood of settlement through mediation continued as the case progressed. Those cases that waited to mediate 800 days or more from filing were less likely to settle than those that did not mediate.
These results indicate that mediation may have its greatest impact on settlement early on. 

RSI Board Of Directors

Terry Moritz, President
Prof. James J. Alfini
Marc Becker
Hon. Morton Denlow (ret.)
Hon. Allen S. Goldberg (ret.)
Mitchell Marinello
Raven Moore
Hon. Stephen Pacey (ret.)
Brian Roche
Hon. James Sullivan (ret.)

RSI Staff

Susan M. Yates, Exec. Director
Bridget Crawford
Mariah Heinz
Hanna Kaufman
Olga Kordonskaya
Kevin Malone
Kristen Sanchez
Jennifer Shack
Eric Slepak, Editor


Mariah Heinz Joins RSI as Kane County Mediation Program Assistant

To support our expanding programs in Kane County, Illinois, Resolution Systems Institute is proud to announce that Mariah Heinz has join our organization as of March 1. In this part-time role, Ms. Heinz will support the administration of the mortgage foreclosure mediation program for the Sixteenth Circuit Court of Illinois, and the creation of its new Child Protection Mediation Program. Please join us in congratulating Mariah on her new role!

Child Protection Program Update

Our Child Protection Mediation Program for the Sixteenth Judicial Circuit Court of Illinois continues to come together. This month, RSI worked with the Court and various stakeholders to develop local rules for the program. RSI hopes to have the rules submitted for approval by mid-March.



In Mediation, As on Broadway, It’s All about the Room Where It Happens

Resource Center Director Eric Slepak examines the issue of participation in mediation, taking inspiration from hit Broadway musical Hamilton.



Wondering If Court ADR Really Is Effective?

A number of tremendous researchers have asked that very question. RSI has done its best to gather the myriad evaluations most helpful in assessing the outcomes of court ADR programs.



How Can We Help You? RSI offers a clearinghouse of information on CourtADR.org and also responds to requests for information. Do you have a question about court ADR?
 RSI Site

RSI thanks JAMS and the JAMS Foundation for their support of this publication.

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