AAA: India Johnson Succeeds William K. Slate II

Tuesday, October 23, 2012 - 10:30

The Editor interviews India Johnson, Executive Vice President and President-Elect, American Arbitration Association® (AAA®).

Editor: Congratulations on becoming AAA’s president. Please tell us about your background in arbitration.

Johnson: I have spent 38 years with the American Arbitration Association. I started in our Miami office and then opened the Atlanta office. I became a senior vice president in 1999. My primary focus during that period has been on the commercial arbitration side of the AAA.

Editor: How do Bill Slate’s many contributions to AAA’s success serve as the foundation of your work going forward?

Johnson: Bill is probably most recognized for his commitment to achieving greater diversity in the AAA. As with much of what Bill does, he is a pioneer. He started in the early ‘90s to push for more diversity in AAA’s board, its panels and staff – and we have made great strides since.

We were involved in international arbitration from the very founding of the AAA, back in the 1920s. When Bill arrived on the scene, he really leveraged resources, time and energy to focus on meeting the growing need for serving those involved in international arbitration. As a result, AAA established its International Centre for Dispute Resolution® (ICDR), which most recently held an International Arbitration Conference in Bogotá, Colombia in October.  

My experience has been focused primarily on ADR in the U.S.  Bill will be here through the end of December. One of the main reasons he will be staying on is to introduce me to people in organizations around the world whom he has met over the years, which includes ICDR's counterparts in other parts of the world like the London Court of International Arbitration and the ICC Court of Arbitration. So we will be traveling a good bit to meet and greet face-to-face a lot of these folks. For example, in October, we attended the meeting in Vienna of the UNCITRAL Arbitration Working Group.

Editor: Do corporate counsel have an opportunity to provide suggestions with respect to AAA policies, either as members of its governing board and policy committee or informally? I understand there was an AAA presentation on muscular arbitration at ACC’s Convention in October. Is that an area of particular interest to corporate counsel?

Johnson: We hear from everyone, including corporate counsel, because we handle so many cases. We work with individuals as well as all types and sizes of businesses, law firms, legal departments and sole practitioners. So, we hear from end users quite a bit and, of course, work with them every day on thousands of cases. On our governing board, we have plaintiff attorneys, corporate counsel, unions and union attorneys, law firm attorneys, arbitrators and mediators, and others with an interest in promoting ADR. It’s about 100-strong across the country. 

Typical of the ways in which we stay in touch with corporate counsel was our participation in October in the Association of Corporate Counsel’s Convention in Orlando, Florida. We presented a program on “muscular arbitration,” which is our term for the effort we are making to overcome some of the time and cost concerns from counsel regarding  the perception that arbitration has become too costly and takes too long. Two of the chief reasons why people turned to arbitration in the first place were because they viewed it as less expensive and faster.

Editor: What is the most valuable contribution of AAA to the arbitration process?

Johnson: We have self-enforcing arbitration rules that have been time and court tested. If the parties are unhappy with each other and don’t have a provider like AAA with a comprehensive set of rules, they can’t really be assured that their case will go forward if the other party drags its feet. If you have such a provider and an agreement to arbitrate, parties can be assured that the case will go forward. Both sides therefore have a strong incentive to participate because an enforceable award can be rendered even where the arbitration proceeds on an ex parte basis.

Editor: Much of the success of ADR is attributable to the quality of its neutrals. What steps does AAA take in the way of quality control, both during the selection process and as part of ongoing evaluations?

Johnson: We have criteria for getting on the panel. We recruit panelists based on the kind of expertise that our end users are looking for. Aspiring panelists are required to take a two-day training program so that we can see how they handle issues that we raise. If they do not successfully complete our training program, they do not become part of the AAA panel.  We monitor each case, and if we spot concerns, we deal with them as they arise.

We have evaluations by the parties in every case after it closes, including five or six questions about their view of the neutral. These evaluations, which are kept in our files under the name of the neutral, give us a sense of the neutral’s track record.

Presently that information is not available to people selecting a neutral. Down the road, I plan to consider how we can expand the use of those evaluations of panelists who have handled multiple AAA cases with different parties in a way that would preserve the anonymity of particular end users.

Editor: Early case assessment (ECA) has become an important tool of corporate counsel. It frequently uses mediation as the first step to resolve a dispute before recourse to litigation or arbitration. Does the AAA endorse this process and assist the parties in selecting an appropriate mediator?

Johnson: In most disputes, the parties look for ways to settle before someone else makes the decision for them – whether it’s a judge, a jury or a neutral. We are doing several things to make it easy for parties to avail themselves of the services of an AAA mediator experienced in the process you described. Early next year, we will be launching a new entity and website called Mediation.org that will focus on this process. We are currently recruiting a senior vice president to head it.  

We also offer what we call Judicial Settlement Conference Services, which is designed to provide individuals and organizations with a speedy, efficient method of alternative dispute resolution that mirrors the process and shares the goals and objectives of the judicial settlement conferences used by the courts. The judges that are assigned to these cases are experienced former state and federal court judges from a broad range of geographic areas who have handled hundreds and sometimes thousands of settlement conferences. These judges are listed on our website at www.judicialsettlement.com.

From this group, the parties can select as a mediator a judge with expertise in the practice area that is relevant to a particular dispute. Although a good deal of our cases settle before they go to an award, we view this new service as a way of further increasing that settlement rate. The courts have demonstrated that such settlement conferences significantly increase the number of cases settling before actually going to a full-blown trial.

We feel the relatively nonconfrontational nature of the ADR process itself is conducive to arriving at an earlier settlement because as the parties learn more about their case and that of the other side, they are incentivized to look for possible settlement. This process is far less expensive and takes less time than it would if the case were on a court docket where the trial date may be  four or five years out.

Editor: How does the Judicial Settlement Conference that you described differ from the customary mediation process?

Johnson: A Judicial Settlement Conference differs from a pure mediation in that it is much more evaluative. There’s a tension in the mediation world about how evaluative a mediator really should be. At one end of the spectrum people believe the mediator should never ever offer up an idea about where a case should settle, and then there are other end users of mediation that feel they’ve wasted their time if they don’t get a clue from the neutral about what the neutral thinks a reasonable settlement would be.

Our Judicial Settlement Conference offers the best features of mediation, including the neutral caucusing alone with the parties and having joint sessions with them. In addition, it offers end users an opportunity to have a retired judge with experience handling similar cases send a signal or give an actual number about how he or she thinks the case should be resolved.

We had an event in Miami, and we will have another event in Los Angeles, introducing the Judicial Settlement Conference approach. It’s not for everyone. We are very end-user oriented, so we try to offer the parties various ADR processes so that they can select the one that meets their special needs.

Editor: Patent cases present particular challenges as evidenced in Judge Posner’s highly publicized decision. Would arbitration be a better way of handling these cases?

Johnson: We have many cases involving patents and intellectual property. Arbitration is ideally suited for disputes involving highly technical products or services. Since great expertise is needed to understand what the parties are talking about, judges and juries are rarely technically qualified to handle many of these cases. Parties to contracts involving such matters should include arbitration clauses, and many of them do. Obviously the neutrals that we have on the panel from the intellectual property and patent area love that subject matter, and they don’t usually have a gigantic docket to be worried about.

Editor: Discuss some of the criticisms of arbitration such as “splitting the baby.”

Johnson: ADR is not the only target of such criticism. Judges and juries are also accused of splitting the baby. People generally feel that they should have gotten every cent of each dollar of their claim, and from their perspective anything less than that looks like splitting the baby. We have studied awards repeatedly for various caseload types over 10 to 20 years, and we don’t find any support for that criticism.

Editor: What about complaints that it takes too long for arbitrators to reach a decision?

Johnson: Under our rules, they have to reach a decision within 30 days of completion of the arbitration process, so, I think what people mean is the arbitration process takes too long. But a lot of that is driven by the parties. E-discovery has entered the picture. Litigators want to make sure they win, so they feel they need time to adequately prepare.

Therefore, many delays are not attributable to the arbitrators or the arbitration process. Sometimes, arbitrators are to blame because they don’t drive the advocates hard enough. That’s legitimate in some cases, but in other cases, the two advocates – one on each side – resort to litigation-style processes, which eat up a lot of time and money. In those cases, counsel need to make a greater effort to motivate their outside counsel to finish a case and to bring it home on budget and on time.  It’s very hard for an arbitrator to drive two sophisticated advocates who have an entrenched way of proceeding.

Editor: If an arbitration seems to be taking too long, does the AAA look into the circumstances?

Johnson: Sure. We watch the timelines of cases, and if a case seems to be moving too slowly, we call and ask what’s up. Everyone feels his or her case is unique and can’t be judged by some arbitrary timeline that we might pick up from looking at a lot of cases. So it’s a matter of degree and trying to keep motivating people to keep the process going.

Editor: What about the criticism that there is no opportunity to appeal?

Johnson: Most people started using arbitration simply to have final dispute resolution. However, we recognize that there are those who would like to have the ability to appeal. Therefore, we plan to offer optional appellate arbitration procedures either this year or early next year. But we all need to remember there are still arbitration purists out there who believe the best thing about arbitration is that it ends the dispute. This is certainly the predominant opinion of the business people we speak with.

Part of our motivation behind offering optional appellate procedures is that more people might be willing to use a single arbitrator for a large case if they felt there was an appellate process. However, some people also like to use three arbitrators on large cases because having the benefit of three perspectives makes them feel more secure.

Editor: I would assume that there is an opportunity to question a result if it turns out that the arbitrator has a conflict of interest?

Johnson: That is one of the limited grounds specified in the Federal Arbitration Act for vacating an award and is one of the most frequently alleged.  But AAA works very hard to handle all disclosures transparently at the onset of the case to avoid a problem at the award stage.  The AAA also emphasizes the critical importance of arbitrator disclosure in arbitrator training and in our arbitrator appointment process as well.

Editor: What about injunctive relief?

Johnson: Our international arbitration rules allow us to appoint an emergency arbitrator if a party feels it needs emergency protection prior to the appointment of the actual panel that will hear the case. We offer as an option a similar procedure in our domestic rules called Emergency Measures for Protection.

Editor: Earlier you mentioned AAA’s efforts to encourage diversity. Please provide us with more detail.

Johnson: Supplementing what I said earlier, we have a speakers’ bureau that includes diverse neutrals. People from the bureau are made available when the media wants to interview someone about ADR or needs a spokesperson for AAA at a seminar or other event.

We make sure when we do seminars and education programs that women and minorities are up in front of the audience instead of just in the audience, and then we try very hard to make sure that we include diverse arbitrators when we send out a list of potential arbitrators. Of course, the arbitrators need to have expertise in the subject matter. And diversity is part of identifying prospective arbitrators and mediators for the Roster.

We have an annual Higginbotham Fellows Program to which we invite 15 or so women and minorities. It enables women and minorities who are interested in ADR to get education and training in the ADR field. In fact, some participants have been so successful in their ADR practices that they now serve on AAA panels.

The Higginbotham Fellows Program is named after A. Leon Higginbotham, a prominent civil rights advocate, chief judge of the Third Circuit Court of Appeals and one of the first African American federal judges. When he passed away, we commemorated his contributions to the law and to the judiciary by naming this program after him.

Editor: Did you want to mention the role AAA has played in disasters?

Johnson: AAA played a vital role in settling almost 20,000 claims arising from the Hurricane Katrina disaster, as well as other disasters in the past, such as Hurricane Andrew. Right now, the state of North Carolina has a contract with the AAA to manage mediations when there is a natural disaster declared. 

Editor: Was the AAA also involved in the foreclosure issue?  

Johnson: This was our large mediation caseload in Florida after the housing bubble. The banks involved were initially required by the courts in Florida to pay for the entire process. Eventually, the Florida Supreme Court issued a new administrative order declaring that the courts no longer had to send all their foreclosure cases to mediation, but if they wanted to, they could.

We now have a foreclosure mediation program in the Sarasota, Florida area managed jointly with the University of South Florida. The lenders like it because both they and the homeowners pay a modest fee. Because the homeowners have some skin in the game, there’s greater assurance that both parties will be serious about trying to resolve the issues. 

There is more money available to fund this process because of a settlement reached between the 50 state attorneys general and the lenders. And, the lenders are more interested now in helping people stay in their homes through restructured loans; five lenders have made significant commitments to put funds in homeowners’ hands to help them stay in their homes.

For these reasons, I am optimistic about the outcomes of the foreclosure cases that we’re going to be mediating this year and next.  

Editor: To what extent has the interest in cross-border transactions contributed to the growth of international arbitration?

Johnson: Clearly, the lowering of trade barriers and the increasing globalization of business has boosted the use of international arbitration. Arbitration has become the reasonably universal international business justice system. The process, however, does have some nuanced differences from domestic U.S. practice. Recently there has also been an increased interest in mediation internationally.

Through our International Center for Dispute Resolution, disputes arising with parties from most countries can be arbitrated at convenient locations throughout the world – and that caseload has increased every year for the last seven years. In any given year, we have end users that come from about 80 countries. Much of our caseload involves at least one U.S. business or party, but we actually have over 100 cases a year that involve no U.S. organization or no U.S. company.

Please email the interviewee at johnsoni@adr.org with questions about this interview.