What went wrong with mediation?

This article by Christian-Radu Chereji and Constantin-Adi Gavrilă points to the need for Alternative Dispute Resolution (ADR) providers to become better providers of a preferred method of dispute resolution, rather than just an alternative method, because alternative qua alternative dispute resolution hasn’t been selling very well worldwide:

Presenting recently the results of the study on ‘Rebooting’ the Mediation Directive [PDF], Giuseppe de Palo talked about the “European Union mediation paradox” – the existence of a “highly acclaimed, efficient, effective process that very few people use”, in his own words – and the need of “rebooting” the implementation of mediation process in the EU in the light of the limited effects of current legislation upon the number of civil cases mediated.

The same situation can be seen on the other side of the Atlantic, in the US, where a number of prominent experts have pointed to the fact that, after almost half a century of mediation programs implemented by courts, organizations and policy-makers, mediation is still a [marginal] method of dispute resolution, in spite of its obvious advantages.

Continue reading . . .

Petition for Review of Burlage vs. Superior Court Denied

On January 21, 2010, the California Supreme Court declined to review the Second District’s upholding of a trial court’s vacation of an arbitrator’s award under Code of Civil Procedure 1286.2.  Arbitration decisions, indeed, may have become more appealable in California for reasons discussed earlier on this site.

Arbitration decisions may have become more appealable

Private arbitration decisions are not typically appealable in California, except in cases where:

1. The agreement to arbitrate specifically provides a right of appeal.

2. Our Courts of Appeal effectively provide a right of appeal.

The recent decision of the California Second District Court of Appeal, entitled Burlage v. Superior Court (August 31, 2009) (PDF) 177 Cal.App.4th 166, may open the door a bit wider to appeals of private arbitration decisions.

The California rule on private arbitrations is described this way by the California Supreme Court in Cable Connection, Inc. v. DIRECTV, Inc.:

“’Because the decision to arbitrate grievances evinces the parties’ intent to bypass the judicial system and thus avoid potential delays at the trial and appellate levels, arbitral finality is a core component of the parties’ agreement to submit to arbitration. Thus, an arbitration decision is final and conclusive because the parties have agreed that it be so. By ensuring that an arbitrator’s decision is final and binding, courts simply assure that the parties receive the benefit of their bargain.’” Cable Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334 at 1355, quoting Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1 at 10.

The Cable Connection court emphasized “that parties seeking to allow judicial review of the merits, and to avoid an additional dispute over the scope of review, would be well advised to provide for that review explicitly and unambiguously.”  Cable Connection at 1361, emphasis added.

The agreement to arbitrate in Burlage did not provide a right of appeal.

 

What happened in Burlage v. Superior Court:pool

The Burlage dispute involved an actual encroachment of a house’s pool and fence on adjoining property owned by a country club, which encroachment was allegedly known by the seller, but not disclosed to the buyer at time of sale.  Before the arbitration, where the purchasers sought damages for the diminution in value of “their property and for the cost of moving the pool and fence that were on the encroaching land they now owned”, the purchasers moved to exclude evidence of the fact that a title company had, subsequent to the sale, purchased a lot-line adjustment from the adjoining country club for the sum of $10,950, thereby curing the encroachment.

The arbitrator granted this motion to exclude evidence of the “fix” and, after 12 days of testimony, awarded the purchasers $552,750 in compensatory damages, $250,000 in punitive damages, and $732,570 in attorney’s fees and costs.  The sellers moved to vacate this award under Code of Civil Procedure section 1286.2(a)(5) on the ground that the sellers were “substantially prejudiced” by the arbitrator’s refused to hear “evidence material to the controversy.”  Both the trial court and the Burlage court of appeal, with one justice dissenting, agreed.