ADR - On The Highest Authority

Monday, August 2, 2010 - 01:00

Editor: What are the benefits that accrue in having a corporate dispute resolution mechanism in place?

Dreier: An ADR-sensitive group within or affiliated with the litigation department is indispensible to reining in litigation costs. Over 95 percent of litigated cases settle. Trained negotiators and a team experienced in mediation can prevent or shorten the litigation process. Not doing this is the equivalent to hiring and training a fire department each time there is a fire. These skills are sufficiently different from those of a litigator to warrant a legal department hiring the best or keeping a firm on retainer for such services. Imagine fair settlements negotiated or mediated before or early in the litigation process, rather than on the courthouse steps. Both cases are "settled," but the former at minimum cost.

Editor: What types of disputes are most appropriately resolved in an ADR forum? What attributes of such a forum do litigators look for in steering their clients in this direction?

Dreier: Virtually any commercial dispute is appropriate for ADR. I have resolved in mediation and arbitration many hundreds of matters as divergent as complicated contract, employment discrimination, telecommunication, utility, insurance, trade secret, professional malpractice, and a myriad of other matters. Look for a neutral with a sound background and a history of proven results. If the mediation is part of what is anticipated to be a mediation/arbitration process, especially in large or complex matters, the parties may wish to employ the AAA to ensure a smooth transition and experienced neutrals.

Editor: The model Economical Litigation Agreement has gained in recognition. Do you recommend the ELA-style "civil litigation prenup" to your clients? How has it worked in practice? Have you refined it in certain ways for certain disputes?

Dreier: The Economical Litigation Agreement or "prenup" positions a neutral at the heart of discovery disputes, including those involving costly e-discovery. The neutral can arbitrate particular discovery demands and can bar or limit such discovery where it makes no economic sense. The effect is to hold down the cost of commercial litigation. This concept is one example of a broader use of a mediator to act as a discovery master in complex litigation to forestall rampant discovery costs, much as an arbitrator controls discovery in arbitration: interrogatories are limited, depositions are subject to approval, and documentary demands are reviewed for necessity. The result is lower costs and disciplined preparation.