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The Insurance Industry Takes Another Swing at Efficient Dispute Resolution

By Jessica F. Pardi
February 28, 2007

The widespread use of arbitration in insurance and reinsurance disputes was intended to allow parties to resolve complex disputes quickly and efficiently by having persons with knowledge of the specialized terminology, standards, and practices of the insurance industry act as decision makers. This aspiration has been superseded by protracted and voluminous discovery, continual delays and postponements, extensive briefing, and lengthy hearings. In essence, all of the foibles of litigation have crept into the world of arbitration, leaving the insurance industry once again in search of an efficient method to resolve disputes.

Last year, the International Institute for Conflict Prevention and Resolution ('CPR'), in consultation with leading insurers and law firms in the London and American insurance markets, advanced a new International Reinsurance Industry Dispute Resolution Protocol (the 'Protocol') to provide the insurance industry with an alternative to litigation or lengthy arbitration. CPR has been involved in the property-casualty insurance community for more than 20 years and maintains an active Insurance Committee composed of representatives of insurance companies that meet at least twice a year to consider new tools to advocate and support alternative dispute resolution within the insurance industry. CPR also has a Corporate Insurance Coverage Committee consisting of representatives of corporate policyholders, commercial insurers, and coverage and defense counsel. This committee creates and promulgates methods for managing policyholder coverage disputes without litigation.

CPR has offered the Protocol as a statement of 'best practices' to resolve disputes early and efficiently. While focused on reinsurance disputes, the Protocol is meant to apply to insurers, insureds, agents and brokers, as well as reinsurers. A copy of the Protocol and further information regarding CPR can be found at www.InsuranceMediation.org. While somewhat idealistic, the Protocol does offer expedited procedures to bring parties to the table. If, however, the parties to
the dispute either have not adopted the Protocol or are not willing to settle their dispute, the Protocol may serve only as an additional layer to the dispute resolution process.

How Does the Protocol Work?

The Protocol is a four-step method comprised of the following:

1) Identifying and giving early notice of a dispute arising from a reinsurance agreement;

2) Exchanging information and documents that would permit a commercially reasonably assessment of the issues in dispute;

3) Directly negotiating with the parties to resolve the dispute; and

4) If necessary, introducing a skilled, neutral third party to facilitate those negotiations through a mediation procedure.

(Protocol, p. 2)

A company adopting the Protocol is not legally bound by such agreement nor does it waive any rights, defenses, or privileges. If a company adopts the Protocol, it must designate an executive who is responsible for implementing and monitoring the company's proactive use of the Protocol. There is, however, no cause of action for a company that initially adopts the Protocol and then fails or refuses to follow it. While this avoids further disputes regarding adoption and/or failure to abide by the Protocol, it also undercuts any commitment to this process.

CPR recognizes that any contractual provision pertaining to dispute resolution must govern the actions of the parties unless they otherwise agree. CPR notes, however, that the existence of an arbitration clause shall not, in and of itself, constitute an inconsistency with the Protocol. Any dispute as to the applicability of the Protocol to a particular disagreement must be referred to CPR, whose decision shall be final and binding on the parties. Thus, there does not appear to be any option to go to court. This likely will minimize the delays frequently experienced by parties who cannot determine the appropriate procedure (e.g., litigation versus arbitration) for a resolution of their dispute.

Initiating the Process

Any party wishing to institute the Protocol shall serve upon all other
parties to the dispute and to CPR a 'Notice of Negotiation.' The Notice of Negotiation shall include the following:

  • A statement that the party wishes to institute the Protocol;
  • A description of the dispute;
  • A notice that all parties served with the Notice of Negotiation shall submit a 'Notice of Response';
  • A statement that the initiating party agrees to meet with the respondent in good faith to agree upon the documents that shall be made available for copying and inspection;
  • An illustrative list of materials to be exchanged by the parties;
  • A statement that all materials produced shall be returned, and no party shall retain copies;
  • A listing of the claim information known about responding parties;
  • A statement of the monetary amount in dispute; and
  • A statement of the claim information of the initiating company.

The Notice of Response to be prepared by all respondents shall contain the following:

  • A correction or supplementation to the claim information for the responding company;
  • A counterstatement of the dispute and dollar amount at issue; and
  • A statement as to whether the responding party has adopted the Protocol, or if it has not done so, a statement that it will abide by the Protocol.

A form for the Notice of Response is to be sent to each respondent with the Notice of Negotiation, and a response is to be provided within 30 days. Interestingly, both the Notice of Negotiation and the Notice of Response are to identify the 'ADR Executive' for the initiating and responding companies, thereby making that executive responsible for compliance.

No later than the earlier of: a) 45 days from delivery of the Notice of Negotiation; or b) 15 days from delivery of the last delivered Notice of Response, corporate representatives of each party shall meet at a mutually acceptable time and place and as many times thereafter as is necessary to attempt to resolve the dispute. If the parties have not resolved the dispute within 14 days from the commencement of the first meeting, then the parties must attempt to resolve the dispute by mediation. Any insurers who have not adopted the Protocol will be invited to participate in the mediation. If one or more of the non-adopting insurers refuses to mediate, the other parties are to continue with the process unless the absent party or parties are indispensable.

A question arises here as to whether a mediation with fewer than all of the parties could ever be useful or could ever result in a final resolution of the dispute. Parties to a mediation can always either blame the absent parties or withhold settlement funds in the hopes that the absent parties will make up the difference. Additionally, even if one party were to obtain rights of action against an absent party, there are still additional and separate disputes to be resolved.

CPR recognizes that to preserve rights, a party to the dispute may need to initiate arbitration, litigation, or some other type of proceeding for any of the following reasons:

  • To preserve rights under statutes of limitation or repose;
  • To claim venue;
  • To seek provisional relief;
  • To avoid irreparable injury; and
  • To preserve the status quo.

In the event it is necessary to institute arbitration or litigation, CPR believes the Protocol could act as a parallel action with insurers continuing to participate in good faith in the procedures of the Protocol. This suggestion does not seem to advance the goal of efficient resolution.

The Mediation

If the parties cannot resolve the dispute on their own within 14 days of their initial negotiation session, they are to engage in a mediation. The mediation is to be confidential, as is any proposed or final resolution. Any party that has adopted the Protocol shall be obligated to mediate in good faith 'or to provide good reason for not doing so.' The Protocol is riddled with the term 'good faith' and often empowers each party to determine what is a 'good reason' or what is appropriate. As is now common in arbitrations, it seems likely that the parties will dispute the meaning of these terms and whether conduct qualifies as 'good faith' or was done with 'good reason.'

Truncated Discovery

Prior to the mediation, the parties are to meet in good faith and agree upon what information and documents shall be made available for copying and inspection. Under the terms of the Protocol, the parties must make available all information that is: a) in control of the parties and their agents, b) not privileged, and c) relevant to the dispute, 'with the aim that such disclosure be reasonably calculated to permit an informed assessment of the basis for the claims and defenses in dispute.' (Protocol, p. 11) Thus, there is wide latitude for the parties to manipulate what is produced. This too seems to be the beginning of a new battleground.

CPR has provided examples of documents that are 'presumptively accessible, non-privileged and relevant, and should be made available.' These include the following:

A) All underwriting files relating to the underlying claim, including those relating to the direct policy giving rise to the loss;

B) All underwriting files relating to the Agreement of Reinsurance pursuant to which the claim is being made by the Ceding Insurer;

C) All claims files of the Ceding Insurer that relate to the underlying claim, except for any opinions from in-house or outside counsel addressing the underlying claim or the reinsurance claim;

D) All documents that would be relied upon by any reinsurer to support its denial of coverage in whole or in part;

E) All documents, including policies of insurance, which may inure to the benefit of any reinsurer who is a party to the dispute.

(Protocol, p. 11)

At least seven days prior to the first session of the mediation, the parties are to deliver the Notice of Negotiation and Notice of Response, as well as any supplementation 'to the degree the submitting party may consider appropriate,' along with accompanying documents and other information the party deems necessary to familiarize the mediator with the dispute. (Protocol, p. 14) While this encourages organization and may aid in dispute resolution, CPR has left open the door for extensive briefing.

If a party believes it has substantial need for further document production or other materials from the opposing parties, and such parties cannot agree as to the scope of production, the parties may request a joint meeting with the mediator to resolve the discovery dispute. While the mediator cannot compel any production, CPR believes this may aid in resolving the discovery dispute. This is certainly not standard mediation practice, though it may be effective if the parties are hesitant to refuse, in front of the mediator, to produce materials.

Because the Protocol mandates that all parties shall return all materials at the conclusion of this process, the parties may find themselves in a second round of discovery if the Protocol does not result in a final resolution, and they then must litigate or arbitrate.

Selection of the Mediator

The parties are to attempt in good faith to agree upon a mediator. If this is not done promptly, they are to contact CPR, which shall confer with the parties and, within 14 calendar days, provide the names of at least five candidates. If the parties cannot agree to a mediator from the CPR list within seven days of receipt, then the parties are, on the next business day, to submit to CPR the list of the candidates ranked in descending preference. The candidate with the lowest combined score shall be the mediator. Interestingly, CPR takes responsibility for vetting conflicts and the impartiality of all candidates:

Before proposing any mediator candidate, CPR will request that the candidate disclose any circumstances known to the candidate that would cause reasonable doubt regarding the candidate's neutrality, independence or impartiality.

If such circumstances are disclosed, the individual will not serve unless all parties agree. A party may challenge a mediator candidate if it knows of circumstances giving rise to a reasonable doubt regarding that candidate's neutrality, independence or impartiality. However, any such challenge that is not asserted promptly upon learning of the basis of the challenge shall be waived. (Protocol, pp. 12-13)

As with most mediations, the Protocol mediation is nonbinding and controlled procedurally by the mediator. CPR expressly allows the mediator to obtain assistance and independent expert advice subject to the agreement and at the expense of the parties. This too could be a battleground in and of itself as the parties are put in a position to agree upon an expert.

Termination of the Mediation

In the absence of a resolution, the mediation will be deemed terminated if:

A) 90 days have expired from the date of the selection of the mediator; and

B) a written resolution has not been agreed upon by the parties; and

C) a party has given written notice to the mediator and the other parties of its intention to withdraw.

(Protocol, p. 14)

Alternatively, the mediator may conclude that further efforts would not be useful, and the mediation is then terminated. (Protocol, p. 14) While it seems unusual to terminate a mediation without the consent of the parties, this power of the mediator may be used as a threat to force the parties to agree.

If the mediation concludes without a resolution of the dispute, the mediator, with the consent of all parties, may provide an evaluation of the dispute including his or her view of the likely outcome of the dispute if brought to final arbitral award or judgment and/or his or her final proposal for a settlement. (Protocol, p. 15) While this may be helpful, it may also cement the parties' positions as the dispute proceeds to arbitration or litigation.

Comparison with Other Dispute Resolution Mechanisms

While litigation timelines vary depending upon the forum and the judge, if successful, the Protocol would greatly reduce the time and cost associated with litigation. The emphasis, however, should be on the phrase 'if successful.' When the parties fail to resolve their dispute at mediation, they then find themselves back at square one, having spent weeks or even months attempting to resolve their dispute through the Protocol. They then must either prepare and file litigation or begin the process of naming arbitrators.

The Protocol, if successful, does address much of the delay and increased expense now found in arbitrations. For example, when using the AIDA Reinsurance
& Insurance Arbitration Society ('ARIAS') Rules, typically a panel of three arbitrators will decide the timeline for resolution of the dispute. Into this timeline are built delays for discovery disputes, expert discovery, and both initial and pre-hearing briefs and reply. Indeed, ARIAS goes so far as to suggest possible appointment of a 'special master' to determine discovery disputes. ARIAS does, however, have a section of streamlined procedures wherein parties serve and respond to discovery requests before an organizational meeting so that discovery disputes may be addressed at the organizational meeting. This seems similar to the exchange of documents prior to the mediation contemplated by the Protocol. The streamlined procedures of ARIAS, however, contemplate depositions and other discovery that is avoided by the Protocol.

The rules of the American Arbitration Association ('AAA') contemplate mediation prior to arbitration if the parties so desire. Indeed, AAA suggests that the concept of mediation be included in arbitration clauses. As with ARIAS, AAA also has expedited procedures wherein a dispute is heard by a single arbitrator, extensions are limited, claims cannot be amended after an arbitrator is in place, parties may agree to resolve the dispute on briefs without a hearing, and any hearing would be only a single day. While these procedures are, in theory, efficient and cost saving, the AAA intends for them to apply only to lower-dollar disputes.

The Protocol provides an outlet to resolve a dispute more efficiently than either litigation or arbitration. It does not, however, have the teeth necessary to mandate acceptance or compliance. Additionally, it contains the seeds for tangential procedural disputes based upon the level of discretion provided to the parties.


Jessica F. Pardi is a partner in Morris, Manning & Martin LLP's Insurance Group. Pardi practices in the areas of insurance litigation, reinsurance dispute resolution, complex coverage disputes, and insurer insolvency. Her insurer insolvency practice includes representation of receivers, reinsurers, and acquiring insurers.

The widespread use of arbitration in insurance and reinsurance disputes was intended to allow parties to resolve complex disputes quickly and efficiently by having persons with knowledge of the specialized terminology, standards, and practices of the insurance industry act as decision makers. This aspiration has been superseded by protracted and voluminous discovery, continual delays and postponements, extensive briefing, and lengthy hearings. In essence, all of the foibles of litigation have crept into the world of arbitration, leaving the insurance industry once again in search of an efficient method to resolve disputes.

Last year, the International Institute for Conflict Prevention and Resolution ('CPR'), in consultation with leading insurers and law firms in the London and American insurance markets, advanced a new International Reinsurance Industry Dispute Resolution Protocol (the 'Protocol') to provide the insurance industry with an alternative to litigation or lengthy arbitration. CPR has been involved in the property-casualty insurance community for more than 20 years and maintains an active Insurance Committee composed of representatives of insurance companies that meet at least twice a year to consider new tools to advocate and support alternative dispute resolution within the insurance industry. CPR also has a Corporate Insurance Coverage Committee consisting of representatives of corporate policyholders, commercial insurers, and coverage and defense counsel. This committee creates and promulgates methods for managing policyholder coverage disputes without litigation.

CPR has offered the Protocol as a statement of 'best practices' to resolve disputes early and efficiently. While focused on reinsurance disputes, the Protocol is meant to apply to insurers, insureds, agents and brokers, as well as reinsurers. A copy of the Protocol and further information regarding CPR can be found at www.InsuranceMediation.org. While somewhat idealistic, the Protocol does offer expedited procedures to bring parties to the table. If, however, the parties to
the dispute either have not adopted the Protocol or are not willing to settle their dispute, the Protocol may serve only as an additional layer to the dispute resolution process.

How Does the Protocol Work?

The Protocol is a four-step method comprised of the following:

1) Identifying and giving early notice of a dispute arising from a reinsurance agreement;

2) Exchanging information and documents that would permit a commercially reasonably assessment of the issues in dispute;

3) Directly negotiating with the parties to resolve the dispute; and

4) If necessary, introducing a skilled, neutral third party to facilitate those negotiations through a mediation procedure.

(Protocol, p. 2)

A company adopting the Protocol is not legally bound by such agreement nor does it waive any rights, defenses, or privileges. If a company adopts the Protocol, it must designate an executive who is responsible for implementing and monitoring the company's proactive use of the Protocol. There is, however, no cause of action for a company that initially adopts the Protocol and then fails or refuses to follow it. While this avoids further disputes regarding adoption and/or failure to abide by the Protocol, it also undercuts any commitment to this process.

CPR recognizes that any contractual provision pertaining to dispute resolution must govern the actions of the parties unless they otherwise agree. CPR notes, however, that the existence of an arbitration clause shall not, in and of itself, constitute an inconsistency with the Protocol. Any dispute as to the applicability of the Protocol to a particular disagreement must be referred to CPR, whose decision shall be final and binding on the parties. Thus, there does not appear to be any option to go to court. This likely will minimize the delays frequently experienced by parties who cannot determine the appropriate procedure (e.g., litigation versus arbitration) for a resolution of their dispute.

Initiating the Process

Any party wishing to institute the Protocol shall serve upon all other
parties to the dispute and to CPR a 'Notice of Negotiation.' The Notice of Negotiation shall include the following:

  • A statement that the party wishes to institute the Protocol;
  • A description of the dispute;
  • A notice that all parties served with the Notice of Negotiation shall submit a 'Notice of Response';
  • A statement that the initiating party agrees to meet with the respondent in good faith to agree upon the documents that shall be made available for copying and inspection;
  • An illustrative list of materials to be exchanged by the parties;
  • A statement that all materials produced shall be returned, and no party shall retain copies;
  • A listing of the claim information known about responding parties;
  • A statement of the monetary amount in dispute; and
  • A statement of the claim information of the initiating company.

The Notice of Response to be prepared by all respondents shall contain the following:

  • A correction or supplementation to the claim information for the responding company;
  • A counterstatement of the dispute and dollar amount at issue; and
  • A statement as to whether the responding party has adopted the Protocol, or if it has not done so, a statement that it will abide by the Protocol.

A form for the Notice of Response is to be sent to each respondent with the Notice of Negotiation, and a response is to be provided within 30 days. Interestingly, both the Notice of Negotiation and the Notice of Response are to identify the 'ADR Executive' for the initiating and responding companies, thereby making that executive responsible for compliance.

No later than the earlier of: a) 45 days from delivery of the Notice of Negotiation; or b) 15 days from delivery of the last delivered Notice of Response, corporate representatives of each party shall meet at a mutually acceptable time and place and as many times thereafter as is necessary to attempt to resolve the dispute. If the parties have not resolved the dispute within 14 days from the commencement of the first meeting, then the parties must attempt to resolve the dispute by mediation. Any insurers who have not adopted the Protocol will be invited to participate in the mediation. If one or more of the non-adopting insurers refuses to mediate, the other parties are to continue with the process unless the absent party or parties are indispensable.

A question arises here as to whether a mediation with fewer than all of the parties could ever be useful or could ever result in a final resolution of the dispute. Parties to a mediation can always either blame the absent parties or withhold settlement funds in the hopes that the absent parties will make up the difference. Additionally, even if one party were to obtain rights of action against an absent party, there are still additional and separate disputes to be resolved.

CPR recognizes that to preserve rights, a party to the dispute may need to initiate arbitration, litigation, or some other type of proceeding for any of the following reasons:

  • To preserve rights under statutes of limitation or repose;
  • To claim venue;
  • To seek provisional relief;
  • To avoid irreparable injury; and
  • To preserve the status quo.

In the event it is necessary to institute arbitration or litigation, CPR believes the Protocol could act as a parallel action with insurers continuing to participate in good faith in the procedures of the Protocol. This suggestion does not seem to advance the goal of efficient resolution.

The Mediation

If the parties cannot resolve the dispute on their own within 14 days of their initial negotiation session, they are to engage in a mediation. The mediation is to be confidential, as is any proposed or final resolution. Any party that has adopted the Protocol shall be obligated to mediate in good faith 'or to provide good reason for not doing so.' The Protocol is riddled with the term 'good faith' and often empowers each party to determine what is a 'good reason' or what is appropriate. As is now common in arbitrations, it seems likely that the parties will dispute the meaning of these terms and whether conduct qualifies as 'good faith' or was done with 'good reason.'

Truncated Discovery

Prior to the mediation, the parties are to meet in good faith and agree upon what information and documents shall be made available for copying and inspection. Under the terms of the Protocol, the parties must make available all information that is: a) in control of the parties and their agents, b) not privileged, and c) relevant to the dispute, 'with the aim that such disclosure be reasonably calculated to permit an informed assessment of the basis for the claims and defenses in dispute.' (Protocol, p. 11) Thus, there is wide latitude for the parties to manipulate what is produced. This too seems to be the beginning of a new battleground.

CPR has provided examples of documents that are 'presumptively accessible, non-privileged and relevant, and should be made available.' These include the following:

A) All underwriting files relating to the underlying claim, including those relating to the direct policy giving rise to the loss;

B) All underwriting files relating to the Agreement of Reinsurance pursuant to which the claim is being made by the Ceding Insurer;

C) All claims files of the Ceding Insurer that relate to the underlying claim, except for any opinions from in-house or outside counsel addressing the underlying claim or the reinsurance claim;

D) All documents that would be relied upon by any reinsurer to support its denial of coverage in whole or in part;

E) All documents, including policies of insurance, which may inure to the benefit of any reinsurer who is a party to the dispute.

(Protocol, p. 11)

At least seven days prior to the first session of the mediation, the parties are to deliver the Notice of Negotiation and Notice of Response, as well as any supplementation 'to the degree the submitting party may consider appropriate,' along with accompanying documents and other information the party deems necessary to familiarize the mediator with the dispute. (Protocol, p. 14) While this encourages organization and may aid in dispute resolution, CPR has left open the door for extensive briefing.

If a party believes it has substantial need for further document production or other materials from the opposing parties, and such parties cannot agree as to the scope of production, the parties may request a joint meeting with the mediator to resolve the discovery dispute. While the mediator cannot compel any production, CPR believes this may aid in resolving the discovery dispute. This is certainly not standard mediation practice, though it may be effective if the parties are hesitant to refuse, in front of the mediator, to produce materials.

Because the Protocol mandates that all parties shall return all materials at the conclusion of this process, the parties may find themselves in a second round of discovery if the Protocol does not result in a final resolution, and they then must litigate or arbitrate.

Selection of the Mediator

The parties are to attempt in good faith to agree upon a mediator. If this is not done promptly, they are to contact CPR, which shall confer with the parties and, within 14 calendar days, provide the names of at least five candidates. If the parties cannot agree to a mediator from the CPR list within seven days of receipt, then the parties are, on the next business day, to submit to CPR the list of the candidates ranked in descending preference. The candidate with the lowest combined score shall be the mediator. Interestingly, CPR takes responsibility for vetting conflicts and the impartiality of all candidates:

Before proposing any mediator candidate, CPR will request that the candidate disclose any circumstances known to the candidate that would cause reasonable doubt regarding the candidate's neutrality, independence or impartiality.

If such circumstances are disclosed, the individual will not serve unless all parties agree. A party may challenge a mediator candidate if it knows of circumstances giving rise to a reasonable doubt regarding that candidate's neutrality, independence or impartiality. However, any such challenge that is not asserted promptly upon learning of the basis of the challenge shall be waived. (Protocol, pp. 12-13)

As with most mediations, the Protocol mediation is nonbinding and controlled procedurally by the mediator. CPR expressly allows the mediator to obtain assistance and independent expert advice subject to the agreement and at the expense of the parties. This too could be a battleground in and of itself as the parties are put in a position to agree upon an expert.

Termination of the Mediation

In the absence of a resolution, the mediation will be deemed terminated if:

A) 90 days have expired from the date of the selection of the mediator; and

B) a written resolution has not been agreed upon by the parties; and

C) a party has given written notice to the mediator and the other parties of its intention to withdraw.

(Protocol, p. 14)

Alternatively, the mediator may conclude that further efforts would not be useful, and the mediation is then terminated. (Protocol, p. 14) While it seems unusual to terminate a mediation without the consent of the parties, this power of the mediator may be used as a threat to force the parties to agree.

If the mediation concludes without a resolution of the dispute, the mediator, with the consent of all parties, may provide an evaluation of the dispute including his or her view of the likely outcome of the dispute if brought to final arbitral award or judgment and/or his or her final proposal for a settlement. (Protocol, p. 15) While this may be helpful, it may also cement the parties' positions as the dispute proceeds to arbitration or litigation.

Comparison with Other Dispute Resolution Mechanisms

While litigation timelines vary depending upon the forum and the judge, if successful, the Protocol would greatly reduce the time and cost associated with litigation. The emphasis, however, should be on the phrase 'if successful.' When the parties fail to resolve their dispute at mediation, they then find themselves back at square one, having spent weeks or even months attempting to resolve their dispute through the Protocol. They then must either prepare and file litigation or begin the process of naming arbitrators.

The Protocol, if successful, does address much of the delay and increased expense now found in arbitrations. For example, when using the AIDA Reinsurance
& Insurance Arbitration Society ('ARIAS') Rules, typically a panel of three arbitrators will decide the timeline for resolution of the dispute. Into this timeline are built delays for discovery disputes, expert discovery, and both initial and pre-hearing briefs and reply. Indeed, ARIAS goes so far as to suggest possible appointment of a 'special master' to determine discovery disputes. ARIAS does, however, have a section of streamlined procedures wherein parties serve and respond to discovery requests before an organizational meeting so that discovery disputes may be addressed at the organizational meeting. This seems similar to the exchange of documents prior to the mediation contemplated by the Protocol. The streamlined procedures of ARIAS, however, contemplate depositions and other discovery that is avoided by the Protocol.

The rules of the American Arbitration Association ('AAA') contemplate mediation prior to arbitration if the parties so desire. Indeed, AAA suggests that the concept of mediation be included in arbitration clauses. As with ARIAS, AAA also has expedited procedures wherein a dispute is heard by a single arbitrator, extensions are limited, claims cannot be amended after an arbitrator is in place, parties may agree to resolve the dispute on briefs without a hearing, and any hearing would be only a single day. While these procedures are, in theory, efficient and cost saving, the AAA intends for them to apply only to lower-dollar disputes.

The Protocol provides an outlet to resolve a dispute more efficiently than either litigation or arbitration. It does not, however, have the teeth necessary to mandate acceptance or compliance. Additionally, it contains the seeds for tangential procedural disputes based upon the level of discretion provided to the parties.


Jessica F. Pardi is a partner in Morris, Manning & Martin LLP's Insurance Group. Pardi practices in the areas of insurance litigation, reinsurance dispute resolution, complex coverage disputes, and insurer insolvency. Her insurer insolvency practice includes representation of receivers, reinsurers, and acquiring insurers.

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