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HarrisMartin Reinsurance Conference Postscript

September 28th, 2011 Events, Evident Partiality, Grounds for Vacatur, United States Court of Appeals for the Fifth Circuit, United States Court of Appeals for the Second Circuit Comments Off on HarrisMartin Reinsurance Conference Postscript

On September 22-23, 2011, a number of experienced reinsurance industry executives and  in-house counsel, and a small group of outside counsel (yours truly included), spoke at the HarrisMartin Publishing-sponsored reinsurance conference, “Reinsurance Summit:  Fresh Perspectives on the Reinsurance Front,” which took place at the Loews Philadelphia Hotel.  (Our pre-conference, August 22, 2011 post (here) sets forth the conference program agenda.)

As expected attendance was modest – no doubt the result of the cost-cutting mandated by economic conditions, coupled with reduced reinsurance-dispute frequency and severity — but the conference was nevertheless a great success.  The presentations were thoughtful, interesting and professionally useful, and the smaller group of attendees not only facilitated robust – and sometimes, spirited – discussions during the program, but also provided a relaxed atmosphere conducive to networking during the breaks.  I, for one, returned home with “fresh perspectives” on a number of reinsurance-related issues, and those perspectives have proved to be good fodder for brainstorming. Continue Reading »

HARRISMARTIN REINSURANCE SUMMIT: FRESH PERSPECTIVES ON THE REINSURANCE FRONT

August 22nd, 2011 Arbitration Practice and Procedure, Events, Reinsurance Arbitration, Reinsurance Claims, Reinsurance Mediation Comments Off on HARRISMARTIN REINSURANCE SUMMIT: FRESH PERSPECTIVES ON THE REINSURANCE FRONT

The frequency of reinsurance disputes, like most things in the insurance industry, is cyclical in nature, and over the last three or four years or so, the number of new disputes each year has declined fairly significantly compared to 1990 through 2005 levels.  I don’t have statistics to back that statement up, but it is informed by personal experience and numerous discussions with industry participants and their service providers.

Reduced dispute frequency is good news for the industry, but it doesn’t mean that industry executives should assume that reinsurance disputes are a thing of the past, ignore important developments that bear on their resolution, or become less proactive in their efforts to prevent them.  Keeping apprised of recent, pertinent reinsurance- and dispute-resolution-related legal, regulatory and economic developments is particularly important today, because there have been – and will likely continue to be – many that may bear on the nature and frequency of future reinsurance disputes.

To that end, a number of experienced industry executives and  in-house counsel, and a small group of outside counsel, have joined forces with HarrisMartin Publishing to put together a two-day conference designed to survey important, recent developments concerning reinsurance and reinsurance dispute resolution.  The conference — entitled “Reinsurance Summit:  Fresh Perspectives on the Reinsurance Front” — is scheduled to take place at the Lowes Philadelphia Hotel on September 22-23, 2011. Continue Reading »

New York Law Journal Article: “Arbitrator Evident Partiality Standard Under Scrutiny in ‘Scandinavian Re'”

May 20th, 2011 Appellate Practice, Arbitration Practice and Procedure, Ethics, Evident Partiality, Grounds for Vacatur, Practice and Procedure, Reinsurance Arbitration, United States Court of Appeals for the Second Circuit, United States Court of Appeals for the Seventh Circuit, United States District Court for the Southern District of New York, United States Supreme Court Comments Off on New York Law Journal Article: “Arbitrator Evident Partiality Standard Under Scrutiny in ‘Scandinavian Re'”

On May 18, 2011 the New York Law Journal published in its Outside Counsel section an article I wrote, which argues that the United States Court of Appeals for the Second Circuit should reverse the district court’s judgment in Scandinavian Reinsurance Co. v. Saint Paul Fire & Marine Ins. Co.,  No. 09 Civ. 9531(SAS), 2010 WL 653481, at *8 (S.D.N.Y. Feb. 23, 2010), appeal pending No. 10-910-cv (2d Cir.). 

The article is reprinted below with permission, and I would like to thank Elaine Song, a member of the New York Law Journal’s editorial staff, for her assistance and work in getting this published in New York’s leading legal trade publication.   Continue Reading »

SCOTUS Decides AT&T Mobility LLC v. Concepcion!

April 27th, 2011 Arbitrability, Arbitration Agreements, Arbitration Practice and Procedure, Class Action Arbitration, Class Action Waivers, Practice and Procedure, Unconscionability, United States Court of Appeals for the Ninth Circuit, United States Supreme Court Comments Off on SCOTUS Decides AT&T Mobility LLC v. Concepcion!

This morning the United States Supreme Court handed down its long-awaited decision in AT&T Mobility LLC v. Concepcion, No. 09-893, slip op. (April 27, 2011).  The Court held that the Federal Arbitration Act preempts California’s Discover Bank rule, which deems unconscionable class waivers in adhesive contracts under certain circumstances, because it “‘stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.  .  .  .'”  Slip op. at 18 (quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1941)).  (The majority, concurring and dissenting opinions are here.)    

Associate Justice Antonin Scalia wrote the majority opinion, joined by Chief Justice John G. Roberts and Associate Justices Anthony M. Kennedy, Clarence Thomas and Samuel A. Alito, Jr.  Justice Thomas wrote a concurring opinion and Associate Justice Stephen G. Breyer dissented, joined by Associate Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan.  

Stay tuned for more….

David J. Abeshouse Guest Post: Don’t Be Penny-Wise and Pound-Foolish With Contract Law

April 20th, 2011 Drafting Arbitration Agreements, Guest Posts Comments Off on David J. Abeshouse Guest Post: Don’t Be Penny-Wise and Pound-Foolish With Contract Law

By David J. Abeshouse

Perhaps I shouldn’t be telling you this (you’ll see why in a moment), but I think you ought to know. 

Many start-ups, professional practices, and other small businesses lack line-items in their budgets for legal representation.  But they place themselves (and their owners) in considerable peril when they forego having solid written business agreements.  Owners of businesses and professional practices often assume that they have workable understandings with their vendors, associates, and partners.   These assumptions often are misguided, because even the process of negotiating an agreement reveals possible future pitfalls and misconceptions that should be addressed now, before they become mortal issues.  Lack of a written agreement often means there hasn’t been a true meeting of the minds. 

Absent a well-written agreement, all too often something goes very wrong, and then there’s hell to pay in terms of cost, disruption, risk, and other adverse consequences (such as court litigation) of failing to have solid written agreements in place.  Having the right business agreements in place is not an absolute guarantee that you’ll be able to avoid misunderstandings, but it helps protect you and your business or professional practice.

Here’s part of the problem: When faced with legal issues, many try the DIY (do-it-yourself) route, figuring that they’re smart, experienced business people, and therefore should be able to modify old contract forms, and/or find sample contractual provisions online, and cobble them together into a workable agreement.  Some of the pitfalls with this approach, however, include that many aspects of the law aren’t intuitive, many words have legal meanings different from their common meanings, various contractual provisions interact differently in different circumstances, and the education and experience of lawyers trained in the area of drafting contracts should not be lightly ignored.  DIY-ers usually find themselves in a situation akin to steering a rudderless ship, or trying to fix electric wiring or plumbing without the right knowledge or tools.  The results (misdirection, shock, and flood) are the same, and the hapless business owner ultimately pays a far greater price down the road in terms of liability, disruption, business risk, and yes, eventual expenditure of legal fees. 

I can speak neutrally (and I hope informatively and compellingly) on this because I’m not the lawyer who drafts the agreements for the professional practices and other businesses, so I have no self-interest here.  Instead, I’m either the lawyer who represents one side or the other in litigation or arbitration, after something goes wrong and there’s a disagreement that’s not governed by a customized written contract (employment agreement, shareholders agreement, LLC operating agreement, vendor-vendee agreement, services agreement, etc.); or I’m the one who serves as impartial neutral arbitrator or mediator of the dispute. 

I all-too-often litigate the results of the parties’ failure to have well-conceived and well-drafted business contracts.  So, to help avoid having to consult with me, hire the lawyers who can help craft a solid written business agreement for you.  It’s good preventive legal medicine. 

The author is a Business Litigator, Arbitrator, and Mediator in Uniondale, Long Island, NY. He can be reached through his website here or at 516-229-2360. 

© 2011 David J. Abeshouse

[Editor’s Note:  This post was originally published in the Basso on Business Blog and is reproduced with permission here.  For more information about the author, read “Introducing Guest Blogger David J. Abeshouse,” here.]  

Introducing Guest Blogger David J. Abeshouse

April 20th, 2011 Drafting Arbitration Agreements, Guest Posts Comments Off on Introducing Guest Blogger David J. Abeshouse

Today’s guest blogger, David J. Abeshouse, is a Long Island based B-2-B litigator, American Arbitration Association (“AAA”) arbitrator, and mediator.  David and I are good friends and members of the Attorney Roundtable, a networking group that features some leading Long Island based practitioners in a number of different practice areas, all of whom practice solo or in small, boutique firms.  David is one of the founding members of the group.  He’s also an accomplished clarinet player and a former professional musician. 

David’s legal and alternative dispute resolution (“ADR”) practice focuses on litigations, arbitrations and mediations involving small and medium-sized businesses and professional practices.  Because he serves not only as an advocate, but also as a neutral decision maker and settlement facilitator, he has a broad-based, well-rounded perspective on — and unique insights about —  commercial disputes.  You can read more about David’s practice and background here.

David and I share many of the same views on key issues pertinent to B-2-B ADR and litigation.  We both believe that the parties are architects of their own dispute resolution destiny, and, if they wish to take advantage of the many benefits that B-2-B arbitration and mediation can offer, then it is incumbent upon them to take a proactive role in structuring the process in a manner that advances their business interests.  That is true whether the party is a large global insurer or reinsurer, a medium-sized financial service company or retail concern, or a small closely-held company or professional practice doing mostly local business.  Most large companies, and many medium-sized ones, know this and their sophisticated, in-house legal departments often devote substantial time and money into educating themselves about ADR and ensuring that their business contracts, including their ADR-related ones, are as carefully designed and well drafted. 

Smaller companies do not always have in-house the resources to prepare for and deal with disputes, even though disputes are one of the unfortunate realities of doing business.  And while the frequency and number of disputes small companies must handle is generally low, their severity can be quite high — even fatal. 

Dispute resolution and prevention is thus at least as important to smaller businesses as it is to large, multi-national companies.  Yet many smaller business devote few or no resources to dispute management.  

Sometimes this disparity in resource and risk allocation is a simple fact of economic life, including the law of large (and small) numbers.  In others it may evidence a conscious or unconscious decision to assume more risk than necessary or appropriate.  

Both David and I are experienced litigators who have seen firsthand the negative consequences that large, medium and small businesses can suffer as a result of poorly drafted contracts, including ADR-related contracts.  With the benefit of 20-20 hindsight we frequently wonder how it came to be that two business have found themselves in costly litigation or arbitration proceedings concerning a problem which might have been avoided had the parties more carefully drafted the contract or structured the transaction differently.  

This theme underscores David’s guest post, “Don’t Be Penny Wise and Pound Foolish with Contract Law,” which he originally published in the Basso on Business Blog.  Consider it recommended reading for those who own or work for small businesses. 

David has written two other, related articles that we will feature in the not-too-distant future, so stay tuned.

The Seventh Circuit Issues a Landmark Reinsurance Arbitration Opinion in Trustmark Ins. Co. v. John Hancock Life Ins. Co. (U.S.A.): Part III.A

March 9th, 2011 Arbitration Practice and Procedure, Awards, Ethics, Evident Partiality, Practice and Procedure, Reinsurance Arbitration, United States Court of Appeals for the Second Circuit, United States Court of Appeals for the Seventh Circuit, United States District Court for the Southern District of New York Comments Off on The Seventh Circuit Issues a Landmark Reinsurance Arbitration Opinion in Trustmark Ins. Co. v. John Hancock Life Ins. Co. (U.S.A.): Part III.A

Should the Second Circuit Reverse the District Court’s Judgment in Scandinavian Reinsurance Co. v. Saint Paul Fire & Marine Ins. Co.?

I.       Introduction

Parts I and II of this three-part post discussed Chief Judge Frank H. Easterbrook’s decision in Trustmark Ins. Co. v. John Hancock Life Ins. Co. (U.S.A.), No. 09-3682, 2011 WL 285156 (7th Cir. Jan. 31, 2011), and said that Trustmark, in conjunction with  Sphere Drake Ins. Co. v. All American Life Ins. Co., 307 F.3d 617, 622 (7th Cir. 2002) (Easterbrook, J.),  demonstrates that the district court should not have vacated on evident partiality grounds the arbitration award in Scandinavian Reinsurance Co. v. Saint Paul Fire & Marine Ins. Co, No. 09 Civ. 9531(SAS), 2010 WL 653481 (S.D.N.Y. Feb. 23, 2010).     This Part III.A explains some of the reasons why that is so.  Continue Reading »

The Seventh Circuit Issues a Landmark Reinsurance Arbitration Opinion in Trustmark Ins. Co. v. John Hancock Life Ins. Co. (U.S.A.): Part II

February 24th, 2011 Arbitrability, Arbitration Agreements, Arbitration Practice and Procedure, Authority of Arbitrators, Evident Partiality, Practice and Procedure, United States Court of Appeals for the Fifth Circuit, United States Court of Appeals for the Second Circuit, United States Court of Appeals for the Seventh Circuit Comments Off on The Seventh Circuit Issues a Landmark Reinsurance Arbitration Opinion in Trustmark Ins. Co. v. John Hancock Life Ins. Co. (U.S.A.): Part II

I.  Introduction

Part I (here) briefly discussed Chief Judge Frank H. Easterbrook’s decision in Trustmark Ins. Co. v. John Hancock Life Ins. Co. (U.S.A.), No. 09-3682, slip op. (7th Cir. Jan. 31, 2011), and its implications on the pending Second and Fifth Circuit appeals in  Scandinavian Reinsurance Co. v. Saint Paul Fire & Marine Ins. Co, No. 09 Civ. 9531(SAS), 2010 WL 653481 (S.D.N.Y. Feb. 23, 2010), and Dealer Computer Svcs., Inc. v. Michael Motor Co., No. H-10-2132, slip op. (S.D. Tex. December 29, 2010).  This Part II examines in some detail Trustmark’s background and rationale, and Part III will focus on Trustmark’s implications on the Scandinavian Re and Dealer Computer appeals.

II.  Trustmark Background

The following facts were gleaned from both the district court and Seventh Circuit opinions (the district court opinion is reported at 680 F. Supp. 2d 944 and can be found here): Continue Reading »

The Seventh Circuit Issues a Landmark Reinsurance Arbitration Opinion in Trustmark Ins. Co. v. John Hancock Life Ins. Co. (U.S.A.)

February 23rd, 2011 Arbitration Practice and Procedure, Authority of Arbitrators, Evident Partiality, Grounds for Vacatur, Practice and Procedure, United States Court of Appeals for the Fifth Circuit, United States Court of Appeals for the Second Circuit, United States Court of Appeals for the Seventh Circuit Comments Off on The Seventh Circuit Issues a Landmark Reinsurance Arbitration Opinion in Trustmark Ins. Co. v. John Hancock Life Ins. Co. (U.S.A.)

Chief Judge Frank H. Easterbrook of the United States Court of Appeals for the Seventh Circuit is not only a brilliant judge, writer and law professor, but a master of (among many other things) arbitration law.  He understands better than most judges how commercial arbitration is supposed to work, what the Federal Arbitration Act is supposed to achieve, and how to implement the Act to ensure the parties get not only what they bargained for, but also the potential to realize the benefits that private, voluntary dispute resolution can offer.  His arbitration-law opinions are clearly written, imbued with common and commercial sense, and seem purposely designed to make sometimes elusive concepts readily understandable to courts, arbitrators, parties and counsel.  They tend to ensure that the objective, reasonable expectations of the parties are enforced, not frustrated.  Continue Reading »

Revisiting State Regulation of Mediators

January 29th, 2011 Mediation Comments Off on Revisiting State Regulation of Mediators

The Winter 2010-2011 edition of NE-ACR News, the newsletter of the New England Chapter of the Association for Conflict Resolution (“NE-ACR”), contains a number of excellent articles concerning the sometimes controversial topic of mediator certification,  including an article I wrote entitled, “Should States Regulate the Mediation Profession?”  I argue that “proponents of state licensure [of mediators] should be careful what they wish for,” and explain why that is so.  The article appears on page one of the newsletter, which you can read here. 

The article expands upon and refines some of the arguments I made in a July 30, 2009 post entitled, Should the States Certify and Regulate Mediators?  It also argues that state licensure of mediators would likely target non-lawyer members of the profession, and points out three reasons why that would harm both the public and the profession. 

I would like to thank Louisa Williams, President-elect and Board Member of NE-ACR — and editor of NE-ACR News — whose skilled and thoughtful editorial comments and guidance were not only invaluable, but much appreciated.   I would also like to thank Diane Levin, a noted Massachusetts-based mediator and blogger, who was kind enough to recommend me to Louisa as a contributor to the Winter 2010-2011 issue.

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