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New Arbitration News Article on CPR's Innovations (Oct. 4).

Arbitration News
the Newsletter of the International Bar Association Legal Practice Division, Vol 16 No 2
September 2011
Olivier P Andre
CPR Institute. New York

With litigation costing billions every year, the effective management of conflict continues to be critical for companies to lower costs, reduce risks and improve business relationships. Thus, it is key for today's practitioners to stay abreast of the latest trends in conflict management and to be capable of using the full spectrum of dispute resolution strategies to resolve business disputes in the most efficient way.

CPR: innovator of strategies and thought leader

In 1984, the International Institute for Conflict Prevention & Resolution (CPR)1 launched the CPR ADR Pledge (the 'Pledge')2 which committed signatories to first try to resolve their conflicts through alternative dispute resolution (ADR) before launching into costly litigation. The Pledge, which has been signed by more than 5,000 corporations and law firms, has turned out to be a very successful tool in promoting alternative dispute resolution of business conflicts. Over the past three decades, CPR has continued to be a thought leader in educating the legal and business communities about conflict prevention and resolution and in spearheading ground-breaking innovations in the field of public and private resolution of business-related disputes worldwide. These innovations include various non-administered arbitration and mediation rules, industry protocols and other dispute resolution tools.3

This past year, CPR has continued to innovate with new strategies and tools. For example, CPR's Arbitration Committee has released the CPR Protocol on the Determination of Damages in Arbitral Proceedings (the 'Protocol').4 The Protocol, which is the result of more than two years' work, provides guidelines to arbitrators, counsel and their clients for the efficient and fair presentation of damages. The Protocol also sets out a roadmap for the presentation by experts of their damage calculations.

Another innovation is the much talked about Economical Litigation Agreement (ELA), also known as the 'civil litigation prenup'. The ELA, which was spearheaded by Daniel B. Winslow of Proskauer Rose, is a hybrid of civil litigation and arbitration where the parties agree in their contract that any disputes will be settled by economical litigation before a judge, and that any discovery issues will be referred to an ELA arbitrator. The idea is that a knowledgeable ELA arbitrator will enable the parties to proceed more efficiently through litigation and significantly reduce the cost of discovery.5 Also standing out is the newly released CPR Master Guide to Mass Claims Resolution Facilities which was drafted by CPR's Commission on Facilities for the Resolution of Mass Claims co-chaired by Kenneth R Feinberg of Feinberg Rozen, and Deborah E Greenspan of Dickstein Shapiro. The Master Guide examines the use of ADR in various mass claim situations ranging from defective products to 9/1 I-type tragedies, and recommends best practices. CPR has developed many other tools, such as the CPR's Due Diligence Evaluation Tool for Selecting Arbitrators and Mediators and the revised version of CPR's Early Case Assessment Toolkit.

CPR's conferences, educational programmes and training

Over the past year, CPR has continued to offer sophisticated training, educational programs, and networking opportunities for ADR professionals.

In October 2010, the CPR 2010 Leadership Corporate Award Dinner honoured the General Counsel of Amgen and FMC Technologies. Each year, CPR honours corporations that have demonstrated leadership and commitment to the principles of conflict management and resolution and have institutionalised these principles into their corporate and industry culture. The award is presented at a black-tie event that draws approximately 500 attendees representing the top corporations, law firms, scholars and public institutions worldwide.

In January 2011, the 2011 CPR Annual Meeting gathered about 200 corporate counsel and ADR practitioners in New York to discuss new tools and solutions for global problem solving, including the ELA, third- party financing of arbitration and mass claims facilities.

CPR also provides customised ADR training to corporations and law firms, as well as arbitrator and mediator training, on a regular basis. This past year, CPR has also launched a new CLE Regional Events Series.

These regional events, which are organised in partnership with our members all around the world, give an opportunity to ADR experts to share innovative commercial ADR techniques. The first of these events was organised in Chicago in April 2011.

CPR's Y-ADR Group, a group of young ADR practitioners, has organised two Y-ADR events in London and Houston. The goal of these events, which are organised in partnership with member law firms, is to introduce young attorneys to in-house counsel in the international ADR practice area and to give them unique learning opportunities.

Finally, CPR participated in, organised or sponsored numerous conferences around the globe in 2011, including the 2nd ICC Mediation Conference, which took place in Paris in February, the DRI Conference in Chicago in April and the ABA's International Section meeting in Los Angeles in May.

CPR 'Panels of Distinguished Neutrals'

Because selecting a highly qualified neutral is critical to ensure successful dispute resolution and should not be left to chance, CPR maintains 'Panels of Distinguished Neutrals'6 composed exclusively of the industry elite retired judges, prominent attorneys, leading business executives, academics and ADR professionals from around the world. Our panelists have all been qualified through CPR's rigorous credentialing process and have been peer-reviewed and user-approved for quality. As a result, CPR's neutrals are the most sought-after in the field because of their ability to resolve complex business disputes, as well as their strong case management skills and solid ADR background. They are experienced in multinational corporate disputes or issues of public sensitivity and have achieved resolutions in thousands of cases, with billions of dollars at issue, worldwide. CPR members have exclusive access 24/7 to our proprietary 'Panels of Neutrals' which they can search, based on a variety of criteria, on our new website.7 We also provide non-vetted lists of neutrals for a small fee to non-members who are looking for highly-qualified neutrals meeting specific criteria.

Rules & dispute resolution services

Over the years, CPR's committees have developed a number of rules that can be used to resolve disputes effectively. In addition to the standard CPR Mediation Procedure, the CPR Non-Administered Arbitration Rules, and the CPR Rules for Non-Administered Arbitration of International Disputes, CPR offers many industry-specific rules,8 as well as the CPR Arbitration Appeal Procedure.9

The main distinguishing characteristic of these rules is that they provide for non-administered proceedings. Non-administered proceedings enable sophisticated parties to have total control over the process because they are free to completely customise the rules. In effect, the rules act as mere gap fillers. Thus, users often set their own timetables to control the pace of the proceedings and their own customised processes to exercise greater control over the selection of neutrals. The other key advantage of a non-administered process is that it enables the parties to significantly reduce dispute resolution costs. Once they are selected, the neutrals directly administer the proceedings and the parties do not have to file pleadings with CPR. As a result, parties do not have to pay an administrative fee to CPR.

Even though users of our rules are free to conduct totally non-administered proceedings, CPR provides a number of services to assist the parties. First and foremost, CPR regularly assists the parties in the selection of their neutrals.

Under the CPR Mediation Procedure, if the parties cannot agree promptly on a mediator, they notify CPR of their need for assistance in the selection of the mediator. CPR then works with the parties to develop a detailed profile of the qualifications and experience required for the neutral. CPR queries potential candidates for their availability, potential conflicts of interest, and rates. The neutrals' responses and biographies are submitted to the parties who then have a limited timeframe to agree on a candidate. If they fail to agree, the mediator is selected through a ranking process. Because the parties know the availability of the candidates, their rates and their disclosures, they are able to make informed decisions.

A similar 'vetting' process is used in arbitration proceedings. Under the
default CPR Rules for Non-Administered Arbitration, each party appoints a party-appointed arbitrator, and the two party-appointed arbitrators then appoint the chair. If the parties fail to appoint their party-appointed arbitrators or if the party-appointed arbitrators fail to appoint the chair, the arbitrators are appointed through CPR's vetting process described above. This process is also used when the parties have customised their clause to provide that one or more arbitrators shall be appointed by CPR or when the parties provide in their clause that the party-appointed arbitrators will be selected through CPR's screened selection process. With this process, the parties select their party-appointed arbitrators without their knowing which party-appointed them.10 This innovative process buttresses the impartiality of the panel and adds a layer of protection against challenges and risk of vacatur of awards down the line.

Acting as a widely-respected and independent organisation, CPR can also directly appoint an arbitrator or a mediator when the parties provide for a direct appointment in their contract or at the parties' request after the dispute has arisen. In that case, CPR will select a neutral who is fully qualified to resolve the dispute and who has been screened for availability and conflicts.

Finally, CPR remains ready to assist parties using non-administered rules if necessary. For instance, when requested, we assist parties in serving non-responding respondents, scheduling interviews for the selection of neutrals, reviewing challenges of arbitrators post selection and reviewing awards.

In this fiscal year, to date,11 we have seen a significant increase in our case load, that is, cases where CPR intervenes either in assisting the parties to select neutrals or in some other form. Fifty per cent of our cases were arbitration cases and 50 per cent concerned mediation or other dispute resolution mechanisms. In 2010, 27 per cent of our  cases pertained to technology/IP; 23 per cent banking/accounting/financial services; 18 per cent construction; 13 per cent insurance; nine per cent manufacturing; and five per cent food, drugs and cosmetics.

1 CPR is a non-profit educational corporation headquartered in New York. Its members are leading corporations and law firms worldwide dedicated to promoting innovation in the field of conflict management.
2 The CPR Pledge provides, inter alia, that' [I]n the event of a business dispute between our company and another company which has made or will then make a similar statement, we are prepared to explore with that other party resolution of the dispute through negotiation or ADR techniques before pursuing full-scale litigation. If either party believes that the dispute is not suitable for ADR techniques, or if such techniques do not produce results satisfactory to the disputants, either party may proceed with litigation.'
3 Most of CPR's think-tank work is accomplished through CPR's standing committees composed primarily of CPR's corporate and law firm members, as well as invited leading academics and industry experts.
4 See
5 The full text of the model con tract is available
6 CPR maintains more than 20 industry practice panels, including Banking, Accounting & Financial Services, BioTech, Construction, Cross-Border Disputes. Energy, Oil & Gas, Insurance, Taxation. Technology/IP and Trademark. For the full list of our Distinguished Panels and information on applying to be a CPR Panelist, please visit our website.
7 Our Employment and Franchise panels can be accessed by non-members at no cost.
8 See, for example, the CPR Rules for Expedited Arbitration of Construction Disputes, the CPR Global Rules for Accelerated Commercial Arbitration, the CPR Rules for Non-Administered Arbitration of Patent & Trade Secret Disputes, and the CPR Franchise Mediation Procedure.
9 CPR rules are available here.
10 See Rule 5.4 of the CPR Rules for Non-Administered Arbitration.
11 CPR's fiscal year ends on 30 June.

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