If you haven’t had enough of the AIG bonuses controversy, here is a post by Andis Kaulins from the LawPundit discussing the legal theory of unconscionability applied to the AIG employment contracts. We were surprised to learn that the standard AIG Employee Retention Plan (Bonus Contract) posted here by The New York Times contains no arbitration clauses. Also, here is a recent post from the ABA Law Journal. And here is yet another article from the American Lawyer about AIG’s counsel advise on the bonus legal obligations. It took us a while to blog on this story because at Disputing, like President Obama, we like to know what we are talking about before we speak… Technorati Tags: Arbitration, ADR, Law, AIG Bonus Contract,

This week, the Fifth Circuit decided Woodmen of the World Life Insurance Society/ Omaha Woodmen Life Insurance Society v. JRY, No. 08-30405 (5th Cir. Mar. 23, 2009). The defendant-appellees (“JRY” and “TSY”) are parents suing on behalf of the Estate of their minor son (“BMY”) and the plaintiff-appellant Woodmen of the World (the “Society”) is a non-profit fraternal society that provides life insurance and other benefits, including access to a Woodmen Youth Camp via a Certificate of Insurance. This certificate incorporates the Woodmen Constitution, which provides that disputes between members and the Society should be resolved by arbitration. The parents of BMY sued the Society in Louisiana state court claiming that BMY was sexually assaulted by fellow campers while attending the Woodmen camp and alleging that the camp staff were negligent in failing to properly supervise the campers. The Society filed a motion to compel arbitration. The district court held that the dispute fell outside of the arbitration agreement and the Society appealed. The Fifth Circuit set out a two-step analysis that a court should follow to decide whether to compel arbitration under the FAA: Whether the parties agreed to arbitrate the dispute in question. Whether legal constraints external to the parties’ agreement foreclose the arbitration of those claims by deciding: (a) whether there is a valid agreement to arbitrate between the parties and (b) whether the dispute falls within the scope of the arbitration agreement. Since the parties did not dispute the validity of the arbitration agreement, the court only considered the issue of whether their tort claims were encompassed by the arbitration agreement. The court cited the federal policy of favoring arbitration and stated that “ambiguities in the language of the agreement should be resolved in favor of arbitration.” The court concluded that the arbitration clause was “at minimum susceptible of an interpretation that covers the asserted dispute” and remanded with instructions to grant the Society’s motion to compel arbitration. Technorati Tags: Arbitration, ADR, Law, Arbitration of Tort Claims

So much has been said lately about the “evils” of arbitration, but so little attention has been given to studies regarding arbitration. In this article, from the Vol. 18, No. 1 of the Alternative Resolutions newsletter, John Allen Chalk, Sr. summarizes recent studies on the subject of arbitration, including studies on arbitration participants, attorney surveys, employment arbitration, and consumer arbitration. The article concludes that the findings do not support the current criticisms of the arbitration process. Similarly, this ABA Journal post, this Wall Street Journal post, and this National Arbitration Forum Blog post comment on an arbitration study by the Northwestern Law School. The study concluded that consumers won more than half of the arbitrations. The full report is here. Interestingly, some critics have questioned the forum partiality and methodology of these studies. For example, the Northwestern School of Law study refers to only one arbitration firm. Technorati Tags: arbitration, ADR, law, studies on arbitration

Following is a list of recent bills related to Alternative Dispute Resolution filed during the 81st Texas Legislature. H.B. 2256. Relating to mediation of out-of-network health benefit claim disputes concerning enrollees, facility-based physicians, and certain health benefit plans; imposing an administrative penalty. The bills history is here. H.B. 2095. Filed by Rep. Farrar, relating to the regulation of claims against residential home builders. This bill would, among other things, prohibit charging homeowners with fees in connection with a state-sponsored inspection or dispute resolution process and arbitration required under the same title. Status: referred to subcommittee on 03/16/2009. H.B. 2896. Filed by Rep. Leibowitz, relating to forms to be used by builders in contracts for the sale or construction of a new home. This bill provides that a contract form requiring the parties to submit to binding arbitration can not be adopted. Status: referred to the Committee on Business & Industry on 03/17/2009. H.B. 3426. Filed by Rep. Hernandez, relating to the notice required by certain mortgage servicers before foreclosing on real property. This bill provides mediation rules for foreclosure disputes. Status: referred to the Committee on Pensions, Investments & Financial Services on 03/19/2009. H.B. 3482. Filed by Rep. Coleman, relating to the notice required by mortgage servicers before foreclosing on real property. This bill is similar to H.B. 3426. Status: referred to the Committee on Business and Industry on 03/19/2009. S.B. 1475. Filed by Senators Ellis, Van de Putte, and Watson, relating to the notice required by mortgage servicers before foreclosing on real property. This bill is identical to H.B. 3426 and similar to H.B. 3482. Status: referred to the Committee on Business & Commerce on 03/17/2009. Technorati Tags: arbitration, ADR, law,