Tag Archives: ADR

Five Ways To Improve Your Client’s Experience At Arbitration

dl090006_f10I last wrote, rather flippantly I thought, about why, when given the choice, I generally shun arbitration in favor of mediation. One of the comments I received, from über-neutral Deborah Rothman, suggested that I owed it to my readers to check out the set of Protocols developed by the College of Commercial Arbitrators to address the kinds of issues I raised in my post. Well, I did. And it turns out this user-friendly, publicly available monograph, Protocols For Expeditious, Cost-Effective Commercial Arbitration, has a fair amount to offer on the subject of . . . well . . . making commercial arbitration more expeditious and cost-effective. Thank you, Deborah.†

By way of introduction to the Protocols, I thought it made sense to highlight just a few of the suggestions contained in the Protocols aimed specifically at outside counsel. (There are also separate Protocols for business users and arbitrators.) Here you go:

1.  Know What You’re Doing.

I spent so much of my post bashing arbitrators, that I managed to overlook a very important point: it helps if the lawyer advocates have a clue what they’re doing. We generally assume this means having a grasp of the body of law governing the subject of the dispute. While that’s surely crucial, the Protocols point out that it is equally important that counsel understand the unique rules of arbitration advocacy. As the authors comment:

“Counsel who agree to represent parties in commercial arbitrations need to have a solid understanding of the arbitration rules that will apply, the practices of the provider that is administering the arbitration, and the growing body of state and federal arbitration law. They should know how to navigate the arbitration process in an economical yet effective way.” (Id. at 61.)

2. Select Arbitrators With Proven Management Ability.

I would argue that careful selection of the neutral is the single most important step when engaging in any form of alternative dispute resolution (ADR). This Protocol recommends going even farther. It suggests:

“Counsel should do a thorough ‘due diligence’ of all potential arbitrators under consideration and should, consistent with the Code of Ethics for Arbitrators in Commercial Disputes, interview them concerning their experience, case management practices, availability and amenability to compensation arrangements that would incentivize them to conduct the arbitration efficiently and expeditiously.” (Id. at 62.)

3. Seek to Limit Discovery In A Manner Consistent With Client Goals.

I have mixed feelings about this Protocol. One of the problems I’ve historically had with arbitration involves limitations on scope of discovery. It’s fine for the parties to have a goal at the outset to limit discovery to only what is necessary. But it can become a problem if the parties (or one of them) are too optimistic, leading to an overly restrictive scope of discovery. This is what the drafters of the Protocols have to say:

“Discovery is far and away the greatest driver of cost and delay in litigation and in arbitration. . . Outside  counsel have an obligation to make sure the client understands the limitations inherent in arbitration discovery, to assess how much (if any) discovery is truly needed in the case, and to ascertain how much time and money the client is willing to expend in turning over stones.” (Id. at 64.)

See, it’s this “how much (if any) discovery” nonsense that troubles me. In my experience, a client’s case rarely gets worse by conducting discovery, and generally it gets an awful lot better with sufficient discovery. I do recognize that, at some point–generally earlier than later–discovery begins to yield diminishing returns. But the only time I’ve had a bad outcome at an arbitration was when I inherited a case on the eve of the arbitration hearing from a rather dim-witted colleague and the only discovery permitted and conducted was a set of document demands. It was the very worst experience. I say this: if don’t want to conduct discovery then forget arbitration and forget hiring a lawyer and bring your dispute in small claims court. Seriously.

4.  Periodically Discuss Settlement Opportunities With Your Client.

Being an effective, client-centric litigator, whether in trial court or arbitration, requires us to think simultaneously in two different directions. It can be challenging. Even as our client’s case improves, we need to continue questioning whether their interests would truly be better served by negotiating a settlement. This is one of the reasons I think we should strive to adopt the Mr. Spock way of purely rational, objective thinking.

The Protocols authors say this:

“[P]ropitious opportunities for settlement often appear at multiple points during arbitration, including during discussions with opposing counsel in preparation for the preliminary conference, after briefing or rulings on significant threshold matters, on completion of all or particular discovery, after submission of dispositive motions, during the hearing, and after submissions of post-hearing briefs. At all of these stages, outside counsel should re-evaluate their initial case assessment and discuss with the client the pros and cons of pursuing settlement.” (Id. at 65.)

5. Recognize and Exploit The Differences Between Arbitration And Litigation.

Pretty much consistent with my post, the Protocols dispel any lingering hope we may have for success at summary judgment or rigid adherence to the rules of evidence. The drafters say:

“Counsel should . . . keep in mind that dispositive motions are rarely granted in arbitration, and should employ such motions only where there will be a clear net benefit in terms of time and cost savings. Counsel should be aware that arbitrators tend to employ more relaxed evidentiary standards, and should therefore avoid littering the record with repeated objections to form and hearsay.” (Id.)

Yes, your otherwise valid evidentiary objections in an arbitration hearing may not be worth the cost of your breath. They are, both literally and metaphorically, “litter,” or useless trash. They could actually irritate the arbitrator (not to mention your opponent). While the Protocols topically suggest we should “exploit” these differences between arbitration and litigation, neither the Protocol nor the accompanying comment offer much advice about how to turn the lack of available dispositive motions or rules of evidence to our advantage. I’m unconvinced.

While it’s unlikely to provide any immediate relief, one of the Protocols urges lawyers to “work with providers to improve arbitration processes.” (Id. at 67.) I suspect (but have not yet confirmed) that there may be a corresponding Protocol aimed at arbitrators which suggests they give serious consideration to advocates’ comments and suggestions. At least for now, I will continue to prefer mediation to arbitration as an effective form of ADR. However, the Protocols seem to invite a dialogue, which would seem like a step in the right direction

†Ms. Rothman, along with Curtis von Kann, are Associate Editors of the Protocols. Thomas Stipanowich is the Editor-in-Chief.


I Don’t Always Do ADR . . .

993785_370610139728020_64149524_nBut when I do, I vastly prefer mediation to arbitration. Here are five reasons why:

1. The Split-The-Baby Problem.

I’ve had retired judges and other neutrals tell me they don’t like presiding over arbitrations because they invariably lose a future potential client: the lawyer for the losing side. There is one thing arbitrators will try to do to temper this inevitability: they may issue a “split the baby” award, giving an allegedly aggrieved plaintiff something even if he failed to prove his case or suffered no damages. While many will argue that a small “split the baby” award is far better than a runaway jury verdict, in cases involving fee-shifting statutes, such as employment discrimination litigation, the employer who might have won outright in front of a jury is forced to pay the “prevailing” plaintiff’s attorney’s fees (in addition to the arbitrator’s fees and costs).

2. Informality Is Not Necessarily A Good Thing.

It is often thought that arbitration is preferable to a bench or jury trial because the proceedings tend to be more informal. Informality might sound good, but it can be a problem if your arbitrator decides to relax the rules of evidence (which is typically within her discretion) and your opponent’s case hinges on an item of otherwise inadmissible evidence, such as a hearsay statement.

3. No Appellate Review.

What do you do if you lose the arbitration due to a clearly erroneous ruling by the arbitrator? Don’t look to any appellate court for relief. While it is true that the Federal Arbitration Act (FAA) and other schemes may create a situation in which some appellate review is available, the circumstances and scope of review is inevitably limited compared with a state or federal appellate court.

4. Good Luck With That Summary Judgment Motion.

While it can be argued that certain courts are more or less likely to grant meritorious summary judgment motions, many will agree that obtaining summary judgment in a case pending before a private arbitrator may be the toughest sell of all. Without naming names, I suspect there are two reasons for this. First, an arbitrator who grants summary judgment is foregoing a significant income opportunity. While many first-rate neutrals are so fully booked they have no trouble filling time gaps created by a vacated arbitration hearing, this is not always the case. Second, a party who is deprived its right to a full evidentiary hearing because of a summary judgment will almost certainly feel shorted. Her lawyer is unlikely to hire the neutral again.

5. It’s Damn Costly.

Many practitioners feel as I do that arbitration is just too costly to be seriously considered as an alternative to resolving a dispute in state or federal court. In addition to the arbitrator’s hourly rate, which equals or exceeds that of most lawyers, many ADR providers tack on large administrative charges. Those of us that represent employers in employment litigation are stuck trying to explain to our clients why they must deposit, in advance, all of the arbitrator’s fees and costs.

I recognize these are pretty broad strokes. But in most instances, given the choice between a bench or jury trial and a binding arbitration, I’d prefer to stay in court and try to resolve the case through mediation.


Is It Ever A Good Idea to Use a Transformative Mediator?

An article in the June issue of For the Defense offers guidance on selecting the best mediator for a particular case.  Among the different styles of mediator (evaluative, facilitate, hybrid), one that is often overlooked is a style denominated as the “transformative” mediator.  Why is this style disfavored?  I decided to dig a little deeper.

According to the oracle of all truth, Wikipedia, “the transformative approach . . . takes an essentially social/communicative view of human conflict, [in which]  . . . a conflict represents first and foremost a crisis in some human interaction—an interactional crisis with a somewhat common and predictable character. Specifically, the occurrence of conflict tends to destabilize the parties’ experience of both self and other, so that the parties interact in ways that are both more vulnerable and more self-absorbed than they did before the conflict. Further, these negative dynamics often feed into each other on all sides as the parties interact, in a vicious circle that intensifies each party’s sense of weakness and self-absorption. As a result, the interaction between the parties quickly degenerates and assumes a mutually destructive, alienating, and dehumanizing character.”*

This all very Heideggerian and existential, but will it settle cases?  Well, it seems that may not be the only goal.  “Success is measured not by settlement per se but by party shifts toward personal strength, interpersonal responsiveness and constructive interaction. As parties talk together and listen to each other, they build new understandings of themselves and their situation, critically examine the possibilities, and make their own decisions. Those decisions can include settlement agreements, but no one is coerced into any decision or agreement. The outcomes are entirely in the parties’ own hands and subject to their own choices. Effective mediator practice is focused on supporting empowerment and recognition shifts, by allowing and encouraging party deliberation and decision-making, and inter-party perspective-taking, in various ways.”*

There might be something to this.  In my experience mediating disputes that are particularly emotionally charged, attorneys can walk away quite satisfied with a clean, buttoned-up settlement, but the parties themselves come away feeling they “sold” their case too cheaply (or “bought” their peace at an unfair price).  Mediations that dispense too quickly with the “heart” of the dispute and rush into exchanging dollar figures based purely on estimates of damages or jury verdict potential can leave plaintiffs feeling like they haven’t been heard.  While a fat settlement can sound appealing, it usually won’t heal all wounds.  This is particularly true in catastrophic cases involving the loss of a loved one or legitimate sexual harassment suits where the plaintiff feels he or she was just “bought off,” or paid to shut up. 

Other cases can be difficult to settle where (1) there is no real money available to fund a satisfactory settlement; or (2) there are residual questions that need answers money can’t buy (“What caused the car to catch on fire?” or “Why wasn’t he fired long ago if others complained?”)  Taking the “usual” approach, focusing purely on dollars and cents, might not get the job done.  In these circumstances, it can be very healthy and helpful for the mediator to engage in the kind of counseling approach unique to transformative mediation.  I’ve also been involved in cases (some very serious) that went away with no exchange of money where the defendant’s counsel or a knowledgeable employee took the time to explain to grieving parties exactly what happened and how it happened.  Plaintiffs may want most of all just to vent frustration or anger.  A party that feels he/she has been finally “heard” can be more reasonable, making it possible to settle an otherwise impossible case to settle.

Transformative mediators certainly are not appropriate to every dispute.  For example, when I’ve accompanied very skilled or sophisticated client representatives to mediations, they look for ways to control the negotiation process, and can be incapable of suspending the factual or legal controversy long enough to permit a wounded plaintiff simply to be heard.  They want only to drive home the point that the plaintiff is wrong and she will lose at trial.  In this environment, neither the plaintiff nor the defendant will believe their needs are being met and compromise becomes unlikely.

Citing, Bush, R. A. B., & Pope, S. G. , “Changing the quality of conflict interaction: The principles and practice of transformative mediation,” Pepperdine Dispute Resolution Law Journal, 3(1), 67-96.


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