In a post entitled “Who Will Guarantee the Safety of Off-shore Oil and Gas Facilities?” on Larry Susskind‘s blog, the Consensus Building Approach, he suggests the need for an off-shore oil and gas industry risk management system akin to the Institute for Nuclear Power Operations (INPO) created after the 1979 accident at Three Mile Island. Although licensing and a variety of other aspects of nuclear power plant operations are managed by federal and state agencies, the INPO is: a not-for-profit organization supported by the nuclear industry, but with an accountable board of directors. INPO conducts evaluations of all nuclear power plants every 18 – 24 months. Each evaluation generates a rating of 1 – 5. Any plant with 4 or 5 ratings has a relatively short time to make the necessary safety improvements, or it stands its liability insurance (without which it would have to shut down). INPO trains and accredits the managers of all licensed nuclear facilities in the United States. It undertakes independent evaluations of any “events” and makes sure that its findings are circulated quickly throughout the industry so that the same mistakes are not made again. INPO provides assistance to individual plant operators when they are not sure how to handle particular problems. An adverse INPO finding usually leads to a rapid turnover in corporate leadership. Susskind argues a similar risk management system would benefit the off-shore oil and gas industry: An INPO-like system for Off-shore Oil and Gas would make sure that appropriate[ly] trained people were managing each site, tough safety and risk management standards reflecting best practices were in place, constant surveillance of all facilities was always underway, complete transparency at site was assured, and serious penalties were in place that the whole industry rather than individual operators were obliged to enforce. A new risk management system like this would not infringe on the role of regulatory agencies that must still take the lead in licensing. According to Susskind, the implementation of such a system may also eliminate some of the political pressure placed upon federal regulators in states like Texas that depend on oil and gas revenue. The entire blog post may be viewed here. What do you think? What mechanisms would prevent another off-shore oil and gas disaster? Technorati Tags: mediation
Continue reading...Mike Wolgin of the Miami office of Jorden Burt, LLP has compiled a list of recent cases which address “manifest disregard” of the law in an arbitral context. They include: Paul Green School of Rock Music Franchising, LLC v. Smith, No. 09-2718 (3d Cir., Aug 2, 2010), affirmed a district court’s confirmation of an arbitration award and held that the award did not constitute a “manifest disregard” of the law. The Third Circuit declined to address whether “manifest disregard” is a valid ground for vacatur of an arbitral award under the Federal Arbitration Act (FAA). The case in not precedential, however. In The Burton Corp. v. Shanghai Viquest Precision Industries, Co., No. 10 Civ. 3163 (S.D.N.Y., August 3, 2010), the court denied a petition to vacate an arbitration award and granted a petition to confirm the award because it found the arbitrator did not exceed his authority and the award was not in “manifest disregard” of the law. The court cited a Second Circuit opinion which states “manifest disregard” of the law remains a valid ground for vacating an arbitration award. Kunz v. JHP Enterprises, LLC, No. 1:09CV115 (D. Utah, August 9, 2010), granted a motion to confirm a Financial Industry Regulatory Authority (FINRA) award and stated the panel did not exhibit “manifest disregard” of the law by concluding that Plaintiffs had a duty to disclose information. The court also noted that “the Tenth Circuit has acknowledged a judicially-created basis for vacating an arbitration award when the arbitrators acted in “manifest disregard” of the law.” In Ozormoor v. T-Mobile USA, Inc., No. 08-11717 (E.D. Mich., August 19, 2010), the court denied a motion to vacate an arbitral award and held the arbitrator did not exceed his authority. After noting that the Sixth Circuit has held that an arbitral “award maybe vacated if it was made in ‘manifest disregard of the law,’” the court declared the moving party failed to show that the arbitrator acted in “manifest disregard” of the law when he upheld a one-year limitation provision in the parties’ arbitration agreement. Westerlund v. Landmark Aviation, No. CV09-0686 (C.D. Cal., August 9, 2010), denied motions to vacate and modify an arbitral award and granted a motion to confirm the award. Additionally, because the award was not “completely irrational,” and nothing in the award demonstrated that the arbitrator engaged in “manifest disregard” of the law, the arbitrator did not exceed his powers. The court also stated even if “manifest disregard” of the law had taken place and vacatur were justified, “the appropriate remedy would be to remand the case to the arbitrator for further proceedings.” Manifest Disregard and Overlapping Remedies Cases: Kaliroy Produce Co. v. Pacific Tomato Growers, Inc., No. Civ. 10-160 (D. Ariz., Aug. 4, 2010), denied a motion to vacate an arbitration award and granted a petition to confirm the award. The court held that the New York Convention’s remedies are not exclusive of remedies available under the FAA. Additionally, the court found the arbitral award did not “fail to draw its essence” from the arbitration agreement, violate public policy or demonstrate a “manifest disregard” of the law. The case is on Notice of Appeal to the Ninth Circuit. In F. Hoffmann-La Roche Ltd. v. Qiagen Gaithersburg, Inc., No. 09 Civ. 7326, 7396 (S.D.N.Y., Aug. 11, 2010), the court denied a motion to vacate an international arbitration award and granted a motion to confirm the award because the matter was “international” under the New York Convention although the FAA also applied. Additionally, the court found that the arbitrator did not exceed his authority and did not demonstrate a “manifest disregard” of the law. Disputing has discussed “manifest disregard” of the law many times since the United States Supreme Court decision in Hall Street Associates, LLC v. Mattel, Inc., 128 S.Ct. 1396 (2008). Blogs on the subject may be viewed here, here and here. Technorati Tags: law, ADR, arbitration, manifest disregard of the law
Continue reading...On October 12, 2010, the United States Supreme Court issued orders in Montana v. Wyoming (No. 137, Original). The original jurisdiction water rights case was filed before the Court in early 2007 and subsequently transferred to a Special Master prior to the Court’s review. The October 12th orders resulted from Montana’s objections to an interim report issued by the Special Master in February. First, the Court ordered oral argument regarding whether the Special Master was correct in concluding Wyoming did not violate the 1950 Yellowstone River Compact (65 Stat. 663) by drawing the same amount of water out of river tributaries but using it more efficiently and thus depriving downstream users (in this case, Montana) of more water as a result. Second, the Court recommitted to the Special Master a question regarding whether Montana’s state water laws require it to attempt to make up water shortages by prioritizing water usage so long as doing so does not violate anyone’s rights. Finally, the Court denied Wyoming’s motion to dismiss the lawsuit and awarded fees to the Special Master, to be paid in equal parts by both parties. It is interesting to note that the U.S. Solicitor General agreed with the Special Master in an amicus brief that Wyoming’s new efficiencies in irrigation do not violate Montana’s Compact rights and urged the Court to recommit the entire case back to the Special Master. Disputing will be watching this case for further developments. Tags: special masters
Continue reading...by Holly Hayes Modern Physician recently reported about a study by Harvard researchers that says the nation’s “medical liability system” accounted for approximately “$55.6 billion—or 2.4% of total healthcare spending in 2008—with almost $45.6 billion of that figure being spent on the practice of “defensive of medicine,” which includes ordering tests and procedures or avoiding high-risk patients in an effort to avoid being sued.” Purchase the full article here. The study indicates that states including Texas, California and more than a dozen others who have placed limits on noneconomic damages may “not be best for patients” and may not provide the solution to curbing defensive medicine. “Caps don’t seem to change behavior,” says Emily Carrier one of the lead authors of the study. She notes Texas limits noneconomic damages against physicians to $250,000. In an online survey of more than 3,000 physicians conducted last December by Jackson Healthcare, an Alpharetta, Ga.-based staffing and hospital management company, 92% of respondents said they practiced some form of defensive medicine. Pulling out the responses from Texas, Jackson reported that 80% of Lone Star State doctors said they still practice defensive medicine with 64% reporting no change in their behavior since caps went in effect in 2003, 31% reporting a decrease in defensive medicine practices and 5% reporting an increase. In Carrier’s study, physicians were not identified by individual states, but put in three groups consisting of the states with the highest and lowest risk of malpractice and those in the middle. When asked if they practice defensive medicine and are concerned or feel pressure by the threat of a malpractice suit, the study found that there was little difference in the level of concern among physicians practicing in the high-risk states and those in the lower-risk states. What frightens most physicians, Carrier says, is the arbitrary nature of malpractice lawsuits and how evidence suggests that the quality of care is not a good predictor of lawsuits. In fact, she says, “Many people actually injured by negligence don’t go on to sue.” “Physicians tend to view lawsuits as random events, unpredictable and uncontrollable, because they are not viewed as related to the quality of care provided,” the report concluded. “It is likely that physicians’ assessment of their risk is driven less by the true risk of malpractice claims or the cost of malpractice insurance, and more by the perceived arbitrary, unfair and adversarial aspects of the malpractice tort process—which most traditional state reforms do not address.” On Aug. 3, the American Medical Association released results of a survey of 5,825 physicians conducted in 2007 and 2008. Findings showed that 42.2% of the respondents said they’ve been sued at least once and more than 20% had been sued at least twice. Of respondents age 55 and older, 60.5% said they’ve been sued once and 39.2% had been sued at least twice. The federal government is backing pilot projects to test approaches that would ease the problem. HHS, through its Agency for Healthcare Research and Quality, awarded $25 million in grants for several patient safety and medical liability demonstration projects, with $2 million awarded to JBA/Rand to evaluate the findings from these projects and develop evidence to guide long-term solutions to current liability problems. “There will be a very strong focus on transparency, and disclosure to patients and families about harms,” AHRQ Director Carolyn Clancy says. “There will be a very strong focus on increasing the speed in which injured patients are compensated.” The interconnection between the twin problems of medical errors and medical liability can be hard to assess and lead to some misconceptions. “One myth might be that it’s an easy problem to fix,” she says. “This is a huge opportunity to make care safer, and that’s going to be a home run for everyone.” Similar demonstrations are authorized in the Patient Protection and Affordable Care Act, but AHRQ spokeswoman Karen Migdail says funds have yet to be appropriated to pay for them. The AMA, which has been bashed for supporting the healthcare reform law without getting any tort reform relief in return, is hoping to see tangible results. “The latest Harvard estimate of unnecessary costs generated by the nation’s flawed medical liability system affirms that real money can be saved with reforms,” states an e-mail from the AMA attributed to its president, Cecil Wilson of Florida. “The American Medical Association is committed to proven medical liability reforms that are already working in states such as California and Texas. As a result of AMA advocacy on the health reform law, for the first time the government has directed $25 million to further test promising proposals like health courts and safe harbors.” One of the AHRQ grant award winners is Eric Thomas, a professor of medicine at the University of Texas at Houston Medical School and director of the University of Texas at Houston-Memorial Hermann Center for Healthcare Quality and Safety. With his almost $1.8 million grant, Thomas will investigate UT’s disclosure and compensation program and identify and disseminate best practices for using disclosure to improve patient safety. A focus will be on involving patients or their families in the process. Thomas acknowledges that he and a colleague were sued during their residency by the family of a young woman who died from appendicitis complications several weeks after she came into the emergency room with abdominal pain and they diagnosed her with a urinary tract infection. He says that a jury found their original diagnosis to be correct and that her appendicitis condition developed independently from the problems that prompted the original emergency visit. The Harvard study published in Health Affairs concluded that the convergence of healthcare reform and tort reform “may have unexpected synergies in bending our cost curve down,” and Thomas notes how this may be happening in Texas. Thomas says “outstanding reimbursement reform from Washington or state Medicaid offices” may not solve malpractice problems and damage caps won’t stop doctors from practicing defensive medicine, but caps have saved money and the money […]
Continue reading...Disputing is published by Karl Bayer, a dispute resolution expert based in Austin, Texas. Articles published on Disputing aim to provide original insight and commentary around issues related to arbitration, mediation and the alternative dispute resolution industry.
To learn more about Karl and his team, or to schedule a mediation or arbitration with Karl’s live scheduling calendar, visit www.karlbayer.com.
Disputing is published by Karl Bayer, a dispute resolution expert based in Austin, Texas. Articles published on Disputing aim to provide original insight and commentary around issues related to arbitration, mediation and the alternative dispute resolution industry.
To learn more about Karl and his team, or to schedule a mediation or arbitration with Karl’s live scheduling calendar, visit www.karlbayer.com.