Arbitration Agency Offers New Administered Rules
For businesses looking to resolve high-value, complex legal disputes outside the courtroom, there’s a new approach for using arbitration. In response to users’ requests, the International Institute for Conflict Prevention and Resolution (CPR) announced it will offer Administered Arbitration Rules for conflicts in which the users have agreed to go through an institution for arbitration. The rules are effective today.
CPR has offered non-administered rules for about 30 years, but members of the organization were increasingly pushing for administered rules, said Kathleen Scanlon, special counsel to the organization and an attorney who represents companies in arbitration and mediation in her own practice.
The CPR administered process will be more hands-off than its counterparts at the American Arbitration Association and Judicial Arbitration and Mediation Services, said Robert Smit, the chair of the subcommittee of CPR’s Arbitration Committee, which drafted the new rules. Smit is a partner at Simpson, Thacher & Bartlett, a member firm of CPR, where he specializes in international arbitration.
He says CPR won’t intervene in cases unless absolutely necessary—a move that cuts costs to arbitration users. “The administrative cost compares favorably,” he said. “Because you’re using them for discrete tasks, you’re paying them less.”
According to Scanlon, another key feature of the institution’s rules is the number of available avenues available to companies to select an arbitrator. Companies that choose CPR to administer their arbitration can opt for a screened process, in which each company chooses an arbitrator, but CPR contacts the arbitrators so they don’t know which company chose them, and are less likely to be biased accordingly, Scanlon said.
CPR will calculate a fee 12 months after the initial pre-hearing conference, and levy additional nominal fees for each six-month period thereafter. Scanlon said this is to promote efficiency among a company’s in-house counsel and arbitrators.
Scanlon said that CPR won’t see how many companies take this new route for several months, as it will take time for conflicts arise from contracts with the new CPR administered-arbitration clause in them. But she said she thinks companies that do turn to them will have positive experiences.
“It’s a wonderful process, a wonderful alternative to litigation for the right dispute,” she said.