Re: NAF Conflicts of Interests

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That's interesting. I knew that some states gave judges the
option or requiring pre-trial ADR, but I didn't realize that
some states required it as a matter of course.

The situation you describe sounds pretty much par for the
course when individuals are being shoehorned into a
specifically business-to-business method of dispute
resolution, which is what arbitration was introduced to
accommodate.

Actually, the situation you describe seems like the court
treats the arbitration award as an Offer of Judgment (Fed.
Rule 68, I believe). But the "Offer of Judgment" is on
steroids.

It's good that the arbitration hearings are generally
impartial. I think the arbitration hearings that are required
by local courts and conducted by local arbitrators are usually
fair, even if they are inappropriate.

The trick, it seems, is to keep outfits like the NAF out of
the picture.

On 10/24/07, - wrote:
>
> There is a difficulty in mandatory arbitration schemes even
> when they are run independently of the parties involved. Our
> state is one of many that require arbitration in tort cases
> involving less that $300,000. Before the case goes to trial
> the parties must participate in mandatory arbitration. The
> mediator is appointed by the court and mediators for the
> large part are former judges and experienced practitioners.
> It is also for the most part impartial arbitration.
Although
> arbitration is mandatory, neither party is bound to accept
> the result of arbitration. However, if a party refuses the
> arbitration settlement and goes to trial, if the trial award
> is less than 20&37; more (for the plaintiff) or less than
20&37;
> less (for the defendant) than the arbitration amount the
> party not only must pay their own costs and attorney fees
but
> also the opposing party's costs and fees and 100&37; of the
> arbitration cost.
>
> Insurance companies use this penalty provision and low ball
> their settlements by 15 to 20&37;. If the arbitration comes
in
> at fair value the insurance company goes to trial because it
> is unlikely that a judgment will come in more than 20&37;
higher
> than the arbitration fair value amount. If the insured
> fights, they will likely lose costs and fees because a fair
> trial judgment will not exceed 20&37; more than the
arbitration
> fair value award amount. Either way the consumer loses a
> fair settlement and the insurance companies send a message
> that if you don't accept 20&37; less than a fair value
> settlement from them you will lose a lot more.
>
> Even fair impartial arbitration is skewed against the little
> guy in favor of the big companies.
>
>
>
> On 10/24/07, Gary Ricin wrote:
>> TWO CONFLICTS OF INTEREST PER NAF “ARBITRATIONS”
>>
>>
>> 1. One interesting secret connection between NAF and MBNA
>> is found in the person of NAF’s new COO, Michael Kelly.
>>
>> Michael Kelly used to work for a lawyer's firm called
>> Faegre and Benson, which did $215,931 worth of work in
>> 2005 for a “Charity” called Scholarship America Inc. Like
>> Faegre and NAF, this “charity” is based in Minnesota.
>>
>> Scholarship America is pretty much an MBNA charity, and it
>> is substantially funded by the “MBNA Foundation.”
>>
>> The NAF’s own Web site confirms that Kelly was once an
>> employee of Faegre & Benson, which received substantial
>> amounts of money from MBNA.
>>
>> But the NAF does not mention MBNA’s connection to Faegre &
>> Benson (and thus to Kelly) nor faegre & Benson's extensive
>> work for MBNA, because doing so would reveal the obvious
>> conflict of interest in having someone who was paid by
>> MBNA – NAF’s biggest repeat customer – operating a company
>> (NAF) that is supposed to objectively resolve issues
>> involving MBNA.
>>
>> According to NAF’s Web Site: “Prior to joining the
>> National Arbitration Forum, [Michael] Kelly was … a
>> partner with Minneapolis law firm Faegre & Benson.”
>>
>>
>>
>> 2. This guy:
>>
>> Richard Wharton
>>
>> ...of 2660 San Marcos Avenue, San Diego, CA 92104
>>
>> ... is a so-called “independent” arbitrator for the NAF.
>>
>> However, according to US tax returns (which can be
>> accessed on www.guidestar.org – free registration
>> required) he is also on the board of directors for the
>> Institute for Advanced Alternative Dispute Resolution
>>
>> This Institution is a not-for profit arm of the NAF
>>
>> President of that board is Roger Haydock, founder of the
>> NAF.
>>
>> (Also, both the NAF and the Institute have the same
>> address: 6465 Wayzata Blvd #500, St Louis Park, MN, 55426 )
>>
>> Clearly, as an officer for NAF, and not, as advertised, an
>> independant arbitrator, Mr. Wharton shares NAF’s interest
>> in seeing repeat customers satisfied at the expense of
>> consumer debtors.
>>
>>
>>
>>
>> The other members of the NAF-run Institute’s board are:
>>
>> Howard Reben
>> PO Box 7060
>> Portland ME
>>
>> Michael West
>> 492 Beacon Street
>> Boston, MA 02115
>>
>> Joyce Wharton
>> 2660 San Marcos Avenue
>> San Diego CA 92104