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  ![](media/image1.png){width="1.0in"      TYPE AND NUMBER 
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                                           Circular 5310.1 

                                           CONTACT         TELEPHONE
                                                           NUMBER

                                           Henry Griffin   \(202\)
                                                           898-8700

                                           DATE            

                                           June 5, 2001    

                                           DATE OF         
                                           CANCELLATION    
                                           *(Bulletins     
                                           Only)*          

                                                           
  ---------------------------------------- --------------- ---------------

+-------------------+--------------------------------------------------+
| **TO**:           | All Divisions and Offices                        |
+-------------------+--------------------------------------------------+
| **FROM**:         | William F. Kroener, III                          |
|                   |                                                  |
|                   | General Counsel                                  |
+-------------------+--------------------------------------------------+
| **SUBJECT**:      | # Binding Arbitration                            |
+-------------------+--------------------------------------------------+
|                   |                                                  |
+-------------------+--------------------------------------------------+
| **1. Purpose**    | To implement the FDIC's Arbitration Policy, 66   |
|                   | Federal Register 18632 (2001), and provide       |
|                   | uniform guidance and controls regarding the use  |
|                   | of binding arbitration by the FDIC. The guidance |
|                   | and controls within this directive are critical  |
|                   | given the limited rights to appeal a binding     |
|                   | arbitration award.                               |
+-------------------+--------------------------------------------------+
|                   |                                                  |
+-------------------+--------------------------------------------------+
| **2. Scope**      | a\. The provisions outlined in this directive    |
|                   | apply to the FDIC in all capacities and to all   |
|                   | Divisions and Offices seeking to use binding     |
|                   | arbitration. Additionally, the provisions of     |
|                   | this directive shall apply to Federal            |
|                   | court-based arbitration programs. Binding        |
|                   | arbitration may be used to resolve disputes in a |
|                   | number of situations where it is more practical, |
|                   | cost-effective, or efficient than litigation or  |
|                   | other consensual methods of Alternative Dispute  |
|                   | Resolution such as negotiation or mediation.     |
|                   |                                                  |
|                   | b\. This directive will not be construed as      |
|                   | requiring the FDIC to participate in binding     |
|                   | arbitration. This directive does not address the |
|                   | use of binding arbitration in workplace disputes |
|                   | concerning management and employees; EEO         |
|                   | complaints or any other labor and employment     |
|                   | disputes (including disputes subject to          |
|                   | arbitration proceedings under 5 U.S.C. § 7121);  |
|                   | state court-based arbitration programs;          |
|                   | contracts or leases entered into by a depository |
|                   | institution prior to the appointment of the FDIC |
|                   | as conservator or receiver; or any of the FDIC's |
|                   | regulatory, compliance or enforcement            |
|                   | activities.                                      |
+-------------------+--------------------------------------------------+
|                   |                                                  |
+-------------------+--------------------------------------------------+
| **3. Authority**  | The FDIC may enter into binding arbitration      |
|                   | pursuant to the Administrative Dispute           |
| **Authority**     | Resolution Act of 1996 (5 U.S.C. §§ 571-583) and |
|                   | the Alternative Dispute Resolution Act of 1998   |
| **(cont'd)**      | (28 U.S.C. §§651-658). This directive does not   |
|                   | supplant or                                      |
|                   |                                                  |
|                   | supercede any applicable FDIC delegations of     |
|                   | authority with respect to the compromise or      |
|                   | settlement of claims or disputes.                |
+-------------------+--------------------------------------------------+
|                   |                                                  |
+-------------------+--------------------------------------------------+
| **4. Action**     | This directive should be reviewed by employees   |
|                   | in Divisions and Offices who are considering     |
|                   | using binding arbitration, and it will be posted |
|                   | and maintained on the FDIC Website for future    |
|                   | reference. All Divisions and Offices affected by |
|                   | this directive should update their operating     |
|                   | manuals accordingly.                             |
+-------------------+--------------------------------------------------+
|                   |                                                  |
+-------------------+--------------------------------------------------+
| **5.              | Terms used in this directive are defined below:  |
| Definitions**     |                                                  |
|                   | a\. **Alternative Dispute Resolution ("ADR")**.  |
| Definitions       | A generic term that encompasses a wide range of  |
|                   | practices (binding or non-binding) for managing  |
| (cont'd)          | and resolving disputes other than through        |
|                   | litigation or administrative adjudication.       |
|                   | Binding arbitration is a form of ADR.            |
|                   |                                                  |
|                   | b\. **Administrative Dispute Resolution Act of   |
|                   | 1996, 5 U.S.C. §§571-583 ("ADRA")**. The ADRA    |
|                   | authorizes the voluntary use of binding          |
|                   | arbitration by Federal agencies in               |
|                   | administrative matters, pursuant to certain      |
|                   | restrictions set forth in the Act. These         |
|                   | restrictions are set forth in paragraphs 7. and  |
|                   | 8. of this directive.                            |
|                   |                                                  |
|                   | c\. **Federal Arbitration Act, 9 U.S.C. §§ 1-14  |
|                   | ("FAA")**. This statute provides for the         |
|                   | enforcement in Federal court of agreements to    |
|                   | arbitrate and arbitration awards. The FAA is     |
|                   | procedural, not substantive, in nature and       |
|                   | creates no independent basis for Federal subject |
|                   | matter jurisdiction.                             |
|                   |                                                  |
|                   | d\. **Binding Arbitration**. A dispute           |
|                   | resolution process similar to litigation where   |
|                   | the parties agree to use a privately selected    |
|                   | neutral decision-maker to hear their dispute and |
|                   | resolve it by rendering a final and binding      |
|                   | award. Like litigation, arbitration is an        |
|                   | adversarial, adjudicative process designed to    |
|                   | resolve specific issues determined by the        |
|                   | parties. Arbitration differs from litigation in  |
|                   | that it does not require conformity with legal   |
|                   | rules of evidence and procedure, allows          |
|                   | flexibility in timing and choice of              |
|                   | decision-makers, is non-public, and results in   |
|                   | awards which have no precedential value in other |
|                   | disputes. There are very limited rights of       |
|                   | appeal from a binding arbitration award.         |
|                   |                                                  |
|                   | e\. **Court-Based Arbitration**. An arbitration  |
|                   | procedure annexed to a court proceeding and      |
|                   | ordered or required by the court. Federal        |
|                   | court-based arbitration programs are operated    |
|                   | pursuant to the Alternative Dispute Resolution   |
|                   | Act of 1998 (28 U.S.C.§§ 651-658).               |
|                   |                                                  |
|                   | f\. **Evaluation**. Usually a non-binding,       |
|                   | outcome-determinative process in which a         |
|                   | third-party neutral provides an advisory opinion |
|                   | to the parties as to the merits of the dispute,  |
|                   | including an opinion as to the strengths and     |
|                   | weaknesses of each party's case.                 |
|                   |                                                  |
|                   | g\. **Mediation**. A non-binding, voluntary      |
|                   | process involving the use of a third-party       |
|                   | neutral who assists the disputants in attempting |
|                   | to resolve their disputes. Unlike arbitrators,   |
|                   | mediators have no decision-making authority and  |
|                   | cannot impose an award on the parties.           |
|                   |                                                  |
|                   | h\. **Negotiation**. The primary form of dispute |
|                   | resolution in which the parties communicate or   |
|                   | bargain to settle a dispute with no assistance   |
|                   | from a third-party neutral.                      |
|                   |                                                  |
|                   | i\. **Pre-Dispute Agreements to Arbitrate**.     |
|                   | Agreements in which the parties may agree at the |
|                   | time a contract is entered into to submit a      |
|                   | dispute arising from the contract to binding     |
|                   | arbitration. The agreements typically set forth  |
|                   | the arbitration procedures that will be followed |
|                   | if a dispute arises.                             |
|                   |                                                  |
|                   | j\. **Post-Dispute Agreements to Arbitrate**.    |
|                   | Agreements to arbitrate entered into after a     |
|                   | dispute has arisen and where no previous         |
|                   | contractual dispute resolution mechanism was     |
|                   | provided.                                        |
+-------------------+--------------------------------------------------+
|                   |                                                  |
+-------------------+--------------------------------------------------+
| 6\. Background    | The FDIC ADR Program is an organization-wide     |
|                   | effort implementing ADR processes such as        |
| > of FDIC         | negotiation, mediation, evaluation, and          |
| >                 | arbitration (when authorized and when            |
| > ADR Program     | appropriate) for resolving disputes (see FDIC    |
|                   | ADR Policy at                                    |
|                   |                                                  |
|                   | 62 Federal Register 66370). This directive       |
|                   | reiterates the FDIC's commitment and full        |
|                   | support for using ADR and sets forth a framework |
|                   | for continuing and expanding the use of ADR by   |
|                   | providing for the use of binding arbitration in  |
|                   | appropriate cases as a means of dispute          |
|                   | resolution. Although the FDIC encourages         |
|                   | non-binding, consensual forms of ADR, the FDIC   |
|                   | views the use of binding arbitration in          |
|                   | appropriate circumstances as an additional ADR   |
|                   | technique to accomplish its business in an       |
|                   | efficient, economical, and productive manner.    |
+-------------------+--------------------------------------------------+
|                   |                                                  |
+-------------------+--------------------------------------------------+
| 7\. Requirements  | To use binding arbitration, the following        |
|                   | statutory requirements must be met:              |
| > for Use of      |                                                  |
| >                 | a\. All agreements to arbitrate disputes must be |
| > Binding         | in writing and must specify the subject matter   |
| >                 | to be submitted to the arbitrator for decision   |
| > Arbitration     | (5 U.S.C. § 575(a)(2));                          |
|                   |                                                  |
| **Requirements**  | b\. All agreements to arbitrate must include a   |
|                   | maximum award amount that may be granted by the  |
| **for Use of**    | arbitrator (5 U.S.C.                             |
|                   |                                                  |
| **Binding**       | § 575(a)(2));                                    |
|                   |                                                  |
| **Arbitration**   | c\. Any officer or employee of the FDIC offering |
|                   | to use binding arbitration in resolution of a    |
| **(cont'd)**      | dispute must have either the authority to enter  |
|                   | into a settlement concerning the matter, or the  |
|                   | specific authority to consent to binding         |
|                   | arbitration on behalf of the FDIC                |
|                   |                                                  |
|                   | (5 U.S.C. § 575(b)(1) and (2));                  |
|                   |                                                  |
|                   | d\. There may be no requirement that anyone      |
|                   | consent to binding arbitration as a condition to |
|                   | contracting with the FDIC (5 U.S.C.              |
|                   |                                                  |
|                   | § 575(a)(3)); and                                |
|                   |                                                  |
|                   | e\. The agreement to use binding arbitration     |
|                   | must be voluntary on the part of all parties (5  |
|                   | U.S.C. § 575(a)(1)).                             |
+-------------------+--------------------------------------------------+
|                   |                                                  |
+-------------------+--------------------------------------------------+
| 8\. Restrictions  | a\. Binding forms of ADR such as arbitration     |
| on                | shall not be used (except in exceptional         |
|                   | circumstances) if the dispute:                   |
| > Use of Binding  |                                                  |
| > Arbitration     | > \(1\) Requires an authoritative determination  |
|                   | > as precedent for other cases;                  |
| Restrictions on   | >                                                |
|                   | > \(2\) Involves a significant question of       |
| **Use of Binding  | > government policy;                             |
| Arbitration**     |                                                  |
|                   | \(3\) Significantly impacts persons who are not  |
| **(cont'd)**      | parties to the proceedings;                      |
|                   |                                                  |
|                   | > \(4\) Requires a public record of the          |
|                   | > proceedings;                                   |
|                   |                                                  |
|                   | 4.                                               |
|                   |                                                  |
|                   | \(5\) Must be monitored on an on-going basis by  |
|                   | a court or an administrative body to ensure      |
|                   | compliance; and                                  |
|                   |                                                  |
|                   | > \(6\) Must be adjudicated to establish a body  |
|                   | > of law.                                        |
|                   |                                                  |
|                   | b\. In addition to these considerations, this    |
|                   | directive places the following limits on the use |
|                   | of binding arbitration at the FDIC, absent       |
|                   | waiver by delegated authority:                   |
|                   |                                                  |
|                   | \(1\) All agreements to arbitrate shall          |
|                   | explicitly exclude any award of punitive,        |
|                   | consequential, special or exemplary damages by   |
|                   | the arbitrator.                                  |
|                   |                                                  |
|                   | \(2\) All agreements to arbitrate shall          |
|                   | explicitly state that the parties to the         |
|                   | arbitration proceedings must each bear their     |
|                   | respective arbitration costs, including all      |
|                   | attorneys fees and expenses. The agreement to    |
|                   | arbitrate shall explicitly exclude any award of  |
|                   | attorneys' fees or arbitration costs by the      |
|                   | arbitrator.                                      |
|                   |                                                  |
|                   | \(3\) No arbitrator can serve as counsel,        |
|                   | advisor, witness or representative to any party  |
|                   | to the arbitration proceedings. Potential        |
|                   | conflicts of interest of arbitrators selected    |
|                   | pursuant to this directive must be reviewed by   |
|                   | the Legal Division's Conflicts Committee. The    |
|                   | Conflicts Committee will grant or deny, in       |
|                   | writing, waivers of arbitrator conflicts in      |
|                   | appropriate circumstances.                       |
+-------------------+--------------------------------------------------+
|                   |                                                  |
+-------------------+--------------------------------------------------+
| **9. Exclusions** | The provisions of this directive do not apply to |
|                   | the following:                                   |
|                   |                                                  |
|                   | a\. **State Court Arbitration Programs**. The    |
|                   | FDIC should carefully consider whether to engage |
|                   | in binding arbitration in state court. In the    |
|                   | rare situation where the FDIC in either a        |
|                   | receiver or conservator capacity is in state     |
|                   | court and the court arbitration program is       |
|                   | either mandatory or binding, careful assessment  |
|                   | of the case and options to arbitration           |
|                   | (including removal of the case to Federal        |
|                   | jurisdiction) is recommended.                    |
|                   |                                                  |
|                   | b\. **Labor and Employment Arbitration**.        |
|                   | Conflicts that arise during the course of        |
|                   | employment, such as wrongful termination, sexual |
|                   | harassment, and discrimination based on race,    |
|                   | color, religion, sex, national origin, age, and  |
|                   | disability, union grievances and collective      |
|                   | bargaining agreement disputes may be candidates  |
|                   | for arbitration. However, the arbitration of     |
|                   | these disputes is covered by specific labor      |
|                   | statutes, regulations, and FDIC policies and     |
|                   | procedures. Questions concerning labor and       |
|                   | employment arbitration should be directed to the |
|                   | Corporate Affairs Section, Legal Division.       |
|                   |                                                  |
|                   | c\. **Arbitration Clauses in Contracts Entered   |
|                   | into by Depository Institutions Prior to         |
|                   | Failure**. Contracts entered into by depository  |
|                   | institutions prior to the appointment of the     |
|                   | FDIC as conservator or receiver are not subject  |
|                   | to the provisions of this directive. For those   |
|                   | situations, the Legal Division should be         |
|                   | consulted to assist in determining whether it is |
|                   | in the best interests of the conservatorship or  |
|                   | receivership to repudiate or to perform under    |
|                   | the contract.                                    |
|                   |                                                  |
|                   | d\. **FDIC's Regulatory, Compliance and          |
|                   | Enforcement Activities**. The policy and this    |
|                   | directive are not intended to authorize the      |
|                   | FDIC's use of binding arbitration in connection  |
|                   | with its regulatory, compliance, and enforcement |
|                   | activities.                                      |
+-------------------+--------------------------------------------------+
|                   |                                                  |
+-------------------+--------------------------------------------------+
| **10. Delegations | The decision to use binding arbitration, whether |
| of Authority**    | pre- or post-dispute (see paragraph 11., below), |
|                   | is similar to decisions to contract, to initiate |
| **Delegations of  | litigation, or to settle or compromise a         |
| Authority**       |                                                  |
|                   | dispute. Each of these decisions requires the    |
| **(cont'd)**      | written approval of one or more officers of the  |
|                   | FDIC with the necessary delegated authority. The |
|                   | FDIC's practice is to treat binding arbitration  |
|                   | as either the compromise of a claim or the       |
|                   | settlement of litigation, with approvals         |
|                   | required at the appropriate level for both the   |
|                   | compromise or settlement activity and for the    |
|                   | dollar amount. Authority to determine the        |
|                   | maximum award amount for any given arbitration   |
|                   | is reflected in the expenditure and/or           |
|                   | compromise and settlement delegations.           |
+-------------------+--------------------------------------------------+
|                   |                                                  |
+-------------------+--------------------------------------------------+
| **11. Pre- and**  | a\. Form of Agreement:                           |
|                   |                                                  |
| > **Post- Dispute | \(1\) Binding arbitration is a complete dispute  |
| > Agreements to   | resolution mechanism which has few, if any,      |
| > Arbitrate**     | rights of appeal. It is imperative that any      |
|                   | arbitration provisions for use by the FDIC       |
| **Pre- and**      | (whether in a pre- or post-dispute agreement) be |
|                   | carefully drafted and reviewed to ensure that    |
| **Post-Dispute    | all pertinent arbitration issues have been       |
| Agreements**      | addressed for the particular transaction.        |
|                   |                                                  |
| **to Arbitrate**  | \(2\) The Legal Division has developed standard  |
|                   | or model arbitration provisions and clauses that |
| **(cont'd)**      | may be used for form contracts and which may be  |
|                   | tailored to suit the needs of particular         |
| Pre- and          | situations. Divisions and Offices of the FDIC    |
|                   | considering the use of binding arbitration shall |
| Post-Dispute      | use the forms and language provided by the Legal |
| Agreements        | Division. Any language intended to invoke the    |
|                   | use of binding arbitration where the FDIC is a   |
| to Arbitrate      | party must be reviewed and approved by the Legal |
|                   | Division.                                        |
| (cont'd)          |                                                  |
|                   | b\. **Case Approval for Binding Arbitration      |
|                   | Provisions**:                                    |
|                   |                                                  |
|                   | \(1\) **Pre-Dispute Agreements**:                |
|                   |                                                  |
|                   | > \(a\) The FDIC is a party to a wide range of   |
|                   | > contracts and agreements in all its            |
|                   | > capacities. FDIC pre-dispute clauses to        |
|                   | > arbitrate arise in agreements or contracts     |
|                   | > where the FDIC has agreed to binding           |
|                   | > arbitration as a dispute resolution mechanism. |
|                   | > The FDIC recognizes that the optimal time for  |
|                   | > determining contract dispute resolution        |
|                   | > provisions is often at the inception or        |
|                   | > drafting of the contract.                      |
|                   | >                                                |
|                   | > \(b\) Binding arbitration clauses may be       |
|                   | > drafted to be **voluntarily** invoked as       |
|                   | > agreed to by the parties when a dispute arises |
|                   | > during performance of the contract. The        |
|                   | > decision to invoke voluntary binding           |
|                   | > arbitration clauses must be reviewed and       |
|                   | > approved by the Legal Division in accordance   |
|                   | > with this directive. Binding arbitration       |
|                   | > clauses                                        |
|                   | >                                                |
|                   | > may also be written to **require** the         |
|                   | > parties, starting from the time the contract   |
|                   | > is executed, to resolve any disputes that may  |
|                   | > arise through binding arbitration. Clauses     |
|                   | > requiring the use of binding arbitration to    |
|                   | > resolve any disputes between the parties must  |
|                   | > be prepared in accordance with the procedures  |
|                   | > set forth in this directive and applicable     |
|                   | > Delegations of Authority.                      |
|                   | >                                                |
|                   | > \(c\) Binding arbitration clauses in contracts |
|                   | > intended to be used by the FDIC in any         |
|                   | > capacity must be accompanied by a case         |
|                   | > requesting authority for approval to engage in |
|                   | > binding arbitration. The case recommending the |
|                   | > use of such arbitration clauses must contain   |
|                   | > the following information:                     |
|                   | >                                                |
|                   | > [1]{.underline}. The nature or substance of    |
|                   | > the transaction where the arbitration          |
|                   | > provision is intended to be used;              |
|                   | >                                                |
|                   | > [2]{.underline}. The nature of disputes        |
|                   | > intended to be resolved by the provision;      |
|                   | >                                                |
|                   | > [3]{.underline}. Potential dollar amounts in   |
|                   | > controversy or at risk (maximum award amount); |
|                   | >                                                |
|                   | > [4]{.underline}. Whether other forms of ADR    |
|                   | > have been or will be used;                     |
|                   | >                                                |
|                   | > [5]{.underline}. The advantages or benefits    |
|                   | > for the transaction of using binding           |
|                   | > arbitration; and                               |
|                   | >                                                |
|                   | > [6]{.underline}. A draft arbitration clause or |
|                   | > agreement proposed to be used in the           |
|                   | > transaction.                                   |
|                   |                                                  |
|                   | \(2\) **Post--Dispute Agreements**:              |
|                   |                                                  |
|                   | > FDIC post-dispute agreements to arbitrate      |
|                   | > typically arise from newly arising or ongoing  |
|                   | > claims, disputes, or litigation. The FDIC      |
|                   | > shall consider arbitration in the post-dispute |
|                   | > context on a case-by-case basis. The decision  |
|                   | > to use binding arbitration should be in        |
|                   | > accordance with the existing corporate         |
|                   | > procedures for requesting the authority to     |
|                   | > settle or compromise a case. The case          |
|                   | > memorandum requesting authority to enter into  |
|                   | > a post-dispute agreement is similar to the     |
|                   | > pre-dispute case approval authority in         |
|                   | > subparagraph 11.b.(1), above, and shall        |
|                   | > contain:                                       |
|                   | >                                                |
|                   | > \(a\) The nature or substance of the           |
|                   | > transaction where the dispute arose;           |
|                   | >                                                |
|                   | > \(b\) If in litigation, a description of the   |
|                   | > case and the status of the litigation;         |
|                   | >                                                |
|                   | > \(c\) Potential dollar amounts in controversy  |
|                   | > or at risk (maximum award amount);             |
|                   | >                                                |
|                   | > \(d\) The advantages or benefits to the FDIC   |
|                   | > and the transaction of using binding           |
|                   | > arbitration versus the use of litigation (this |
|                   | > statement should include a discussion on the   |
|                   | > ability to withdraw from the litigation, to    |
|                   | > pursue settlement, establish precedent, have   |
|                   | > open records, and pursue an appeal);           |
|                   | >                                                |
|                   | > \(e\) Estimated costs to the FDIC in           |
|                   | > arbitrating the matter, including arbitrator   |
|                   | > costs, FDIC personnel costs, outside counsel   |
|                   | > costs, and case administration compared with   |
|                   | > the costs to litigate;                         |
|                   | >                                                |
|                   | > \(f\) Whether other forms of ADR have been or  |
|                   | > will be used; and                              |
|                   | >                                                |
|                   | > \(g\) A draft arbitration agreement proposed   |
|                   | > to be used in the transaction.                 |
|                   |                                                  |
|                   | c\. **Summaries**:                               |
|                   |                                                  |
|                   | In all pre- and post-dispute agreements where    |
|                   | binding arbitration is used, the responsible     |
|                   | FDIC Division or Office must, at the cessation   |
|                   | of arbitration proceedings, complete a summary.  |
|                   | This summary shall be an assessment of the use   |
|                   | of arbitration and shall:                        |
|                   |                                                  |
|                   | > \(1\) Indicate the final costs of the          |
|                   | > arbitration;                                   |
|                   |                                                  |
|                   | \(2\) Reflect the total amount awarded by the    |
|                   | arbitrator;                                      |
|                   |                                                  |
|                   | \(3\) Show the date of the decision;             |
|                   |                                                  |
|                   | \(4\) Estimate the costs to the FDIC had it      |
|                   | litigated the matter; and                        |
|                   |                                                  |
|                   | > \(5\) Include the arbitrator's summary of      |
|                   | > decision and award and an evaluation of the    |
|                   | > arbitrator's performance.                      |
|                   |                                                  |
|                   | This summary shall be forwarded to the ADR Unit  |
|                   | of the Legal Division and the Division or Office |
|                   | Director or his designee participating in the    |
|                   | arbitration proceeding.                          |
+-------------------+--------------------------------------------------+

+-------------------+--------------------------------------------------+
|                   |                                                  |
+-------------------+--------------------------------------------------+
| **12.             | a\. All **Divisions and Offices** considering    |
| R                 | the use of binding arbitration shall:            |
| esponsibilities** |                                                  |
|                   | > \(1\) Identify subject areas and transactions  |
|                   | > where arbitration may be appropriate to        |
|                   | > resolve disputes;                              |
|                   | >                                                |
|                   | > \(2\) Develop plans and strategies for the     |
|                   | > implementation of binding arbitration in       |
|                   | > general and this directive specifically in     |
|                   | > identified subject areas; and                  |
|                   | >                                                |
|                   | > \(3\) Work with the Legal Division to identify |
|                   | > legal issues that may affect the substantive   |
|                   | > transaction/subject area and the               |
|                   | > implementation of the use of binding           |
|                   | > arbitration.                                   |
|                   |                                                  |
|                   | b\. The **Legal Division** shall:                |
|                   |                                                  |
|                   | > \(1\) Provide consultation and assistance in   |
|                   | > the development of each case for use of        |
|                   | > binding arbitration in pre- and post-dispute   |
|                   | > agreements;                                    |
|                   | >                                                |
|                   | > \(2\) Review and concur in each case of        |
|                   | > binding arbitration;                           |
|                   | >                                                |
|                   | > \(3\) At the request of a Division or Office,  |
|                   | > address legal issues that may occur if         |
|                   | > arbitration is used to resolve disputes        |
|                   | > arising in a transaction;                      |
|                   | >                                                |
|                   | > \(4\) Provide a requesting Division or Office  |
|                   | > with standard forms (model agreements,         |
|                   | > clauses, and the like) to use binding          |
|                   | > arbitration where approved;                    |
|                   |                                                  |
|                   | \(5\) Assist in arbitration design;              |
|                   |                                                  |
|                   | > \(6\) Assist in selection of arbitrators when  |
|                   | > requested; and                                 |
|                   | >                                                |
|                   | > \(7\) Assist in the enforcement of arbitration |
|                   | > agreements or awards pursuant to the terms of  |
|                   | > the Federal Arbitration Act.                   |
|                   |                                                  |
|                   | **Note**: For purposes of this directive,        |
|                   | references to the Legal Division shall, in the   |
|                   | case of the Office of Inspector General, be      |
|                   | deemed to be references to the Office of Counsel |
|                   | to the Inspector General.                        |
+-------------------+--------------------------------------------------+
|                   |                                                  |
+-------------------+--------------------------------------------------+
| **13. Contact**   | Questions regarding this directive should be     |
|                   | directed to the ADR Unit of the Legal Division   |
|                   | in Washington.                                   |
+-------------------+--------------------------------------------------+

  -------------------- --------------------------------------------------
                       

  **14. Effective      The provisions of this directive are effective
  Date**               immediately.
  -------------------- --------------------------------------------------