Editor: We understand that the Federation of Defense & Corporate Counsel (FDCC) has created a training video for counsel engaged in alternative dispute resolution (ADR). Please tell our readers about the topics covered and why FDCC chose to create this valuable resource.
Pratt: Many years ago, FDCC developed its innovative Trial Masters Program, which was aimed at improving the already excellent skills of its trial lawyer members. Two years ago, our then president, Steve Barney, reflected on the success of this program and the fact that fewer than three percent of U.S. civil cases actually go to trial, with the balance settled using some form of ADR. The result was FDCC’s decision to create the ADR Masters Program.
The program is designed to provide FDCC members with practical tools to become more effective throughout the mediation process, including how to prepare for, execute and ultimately maximize the outcome of the mediation. It includes comprehensive simulations of mediation in the context of a hypothetical case, starting with initial strategy meetings at which key players identify their objectives and develop a step-by-step process toward the goal of a harmonious mediated dispute resolution.
The two-hour and 20-minute training video features real players participating in the simulations, and it culminates with practical feedback from a diverse panel of experts, such as a defense counsel, seasoned mediator, corporate representative and jury consultant.
Lorell: It is critical for lawyers to recognize that mediation is not an adversarial process. Therefore, even the best trial advocates can benefit from learning about the subtle issues and techniques involved in the mediation process. FDCC’s training video identifies those issues and then presents a multi-perspective panel discussion of different philosophies and approaches for each issue and technique. Our target audience is defense counsel and corporate counsel, with equal emphasis on both.
Specifically, the video takes a hands-on approach, which viewers report is very beneficial, and covers the following topics:
Editor: Please discuss FDCC’s core organizational values and how the ADR training video advances them.
Pratt: As a federation, FDCC has three flagship principles – knowledge, professionalism and fellowship. The ADR video fits the knowledge piece and enables our members to absorb important information and improve their mediation skills. The video is relevant to anyone involved with representing a defendant during mediation, and our members can use the video in a variety of ways. Law firm members can use this program as an internal teaching tool for their younger lawyers or as a vehicle for discussing the benefits of mediation with corporate clients. The video is equally useful to FDCC’s in-house counsel members. I use the video as a training tool for attorneys in my chief litigation office to enable them to become more effective advocates in a mediation context and thereby achieve satisfactory outcomes.
Editor: Please talk about the process of training litigators in the techniques and goals of mediation. Does this represent a cultural shift in their practices?
Lorell: Mediation does not represent a cultural shift but rather a change of emphasis to a conciliatory, as opposed to an adversarial, approach. The goal of litigation, of course, is to win, while the goal of mediation is to resolve disputes by mutually agreeable settlements.
Mediation emphasizes different skills, such as being a good negotiator and compassionate listener, and the participants must be willing to explore creative solutions that reach beyond a simple exchange of money. Mediated settlements may involve negotiating business terms or corrective action.
In all events, mediation is about consensus building, and good trial lawyers can and should be effective advocates once they adapt to the different environment and style. Our training program helps them appreciate the differences between mediation and litigation and understand what special skills and sensitivity may be required in representing and managing the expectations of corporate clients in mediating disputes.
Pratt: While some corporate defendants opt to hire separate mediation counsel, Jeff’s point about transferable skills is well taken. My colleagues and I have done some thinking about this issue and agree that many litigation skills apply in mediation.
Executing those skills, however, is a different process for each method of dispute resolution. The mediation room is more intimate and involves a smaller group of participants working with shorter timeframes. It is very different from a courtroom. Adopting an aggressive, saber-rattling attitude in the mediation room often doesn’t succeed, given the goal is for both sides to be satisfied with the outcome.
Thus, the goal of the training video is to take the good trial lawyers, which we have in abundance in the Federation, and educate them about how their courtroom skills can be adapted to the mediation forum.
Editor: What are the challenges for corporate counsel in deciding whether to use ADR more extensively?
Pratt: As in-house counsel, I can’t force the other party to engage in mediation, though it is increasingly more commonplace for judges to mandate the use of mediation. The most common impediments I encounter are general resistance to the process and lack of understanding as to how mediation can drive successful outcomes.
Most mediation decisions are driven by several key objectives. These include not only achieving a reasonable settlement and mitigating the risks of a jury trial, but also learning more about the other party’s case, and for the other party to learn more about our case. All of this allows us to set the stage, through relationship building, for a successful resolution that may take place immediately or over a period of six months to a year. Again, the only real impediment is the failure to be open-minded about the ADR process.
Lorell: One significant advantage of mediation over litigation is that the company makes the final decision about a negotiated settlement and one forged by its own in-house or outside counsel. The outcome of litigation is that a court makes the decision for the company.
I can echo Tim’s comments with my own observation that some companies can be fearful of the decision to mediate, both in itself and in light of the accompanying need to stand behind a mediated settlement. Enlightened corporate governance acknowledges the benefits of ADR in certain cases, and its use should increase as state and federal courts now require mediation in almost every case. As a result, companies should become more familiar with and less resistant to the adoption of ADR.
Editor: Are you seeing increased use of ADR clauses that require parties to use mediation before resorting to arbitration?
Pratt: It is not unusual in my world to build an arbitration provision into agreements with suppliers and vendors because each party enjoys the mutual benefits of speedier dispute resolution. Given the amount of litigation relating to contractual arbitration issues, including new jurisprudence from the U.S. Supreme Court, we are watching these developments with a view that reaches beyond our individual business relationships.
FDCC’s ADR Masters project focuses squarely on mediation and seeks to raise awareness of this option. Whether we have a contractual obligation or right to mediate a dispute, if we have a dispute – and before a lawsuit is filed – I often will suggest that we attempt to resolve the issue through mediation. It is not a contractual obligation but rather a good, cost-effective practice for resolving disputes between parties with open minds.
Lorell: I have seen a number of contracts that require mediation before arbitration or litigation. In some industries, those clauses can be very effective, particularly in handling business issues versus traditional legal disputes that require costly discovery.
Often, mediation can resolve the entire dispute early on or, at minimum, can narrow the scope of the dispute so that the subsequent arbitration or litigation hinges only on a few of the most contentious issues. Clauses requiring the initial step of mediation are common in the construction industry, and mediation has been very productive in reducing or eliminating disputes in construction-related cases we’ve handled.
Editor: Please talk about ADR in the context of substantive areas, such as IP, employment law or consumer law.
Lorell: History has shown that both mediation and arbitration can be very effective in resolving employment disputes, and we know of a number of employment or union agreements that require mediation first and then arbitration rather than litigation. From an employer’s standpoint, ADR removes the emotions of the jury from the equation and places matters before an objective professional who can help the parties negotiate a settlement in mediation or who can render a decision in arbitration.
We have also seen success with mediation and arbitration in disputes between merchants and in matters involving sophisticated equipment leasing. It has enjoyed great success in environmental cases, particularly in remediation cost-sharing disputes among numerous potentially responsible parties (PRPs). In the latter circumstance, mediation is an invaluable tool to help parties come to terms without incurring extensive litigation costs.
Pratt: I see limitless opportunities to leverage the benefits of mediation and achieve desirable, cost-effective outcomes in all substantive areas of the law. In my former role as a product liability trial counsel, I mediated hundreds of cases, and I continue to see value in this forum.
Companies are using ADR, for instance, in complicated intellectual property disputes, attesting to the broad range of its effective use. As Jeff mentioned earlier, mediated resolutions often eschew financial settlements in favor of other considerations, such as supplying materials. You don’t know what you can accomplish until you sit down with an open mind and talk through the issues from both sides.
Lorell: The Supreme Court’s recent decision in the AT&T Mobility case increases the likelihood that consumer contracts will include pre-dispute arbitration clauses that preclude class-action arbitration. No company wants to be a respondent in class-action arbitration. Therefore, to the extent that the AT&T decision allows the Federal Arbitration Act to preempt state statutes precluding anti-class-action provisions, we will see more pre-dispute arbitration clauses in contracts.
On the employment side, I have seen cases where the EEOC took action on behalf of employees who had individual arbitration clauses and felt that a broader approach was warranted. Rather than let the individuals arbitrate alone, the EEOC jumped in and filed a federal action against national companies. In other instances regulations may apply, as with the securities industry under FINRA, which precludes class-action arbitration.
Pratt: In practical terms, fewer judges are available to handle the increasing number of cases filed each year; the time to disposition is lengthening, particularly in state courts, and the costs of civil litigation are rising in the wake of mushrooming e-discovery volumes. As a result, I anticipate that more litigants will turn to mediation and arbitration, not only as a result of contractual provisions mandating their use, but also, and more importantly, because there is a growing acceptance of these forums as quicker, less expensive and more satisfying.
Editor: Does the training video support FDCC’s broader goals in advancing ADR and serving its members’ needs?
Pratt: Given the tremendous percentage of civil cases already being resolved through mediation, our goal with the training video was not so much to encourage the use of ADR but rather to develop a training program so that mediation could be used more effectively. Abraham Lincoln once said that if he had six hours to cut down a tree, he’d spend the first hour sharpening his axe, and this statement captures the spirit of the Federation’s efforts. We want our members to be prepared.
In serving a highly accomplished membership, we are always challenged to provide services and resources that deliver value and are truly useful. Our members don’t need to be taught the basics, such as opening statements, closing arguments or cross examinations, because they are seasoned litigators.
FDCC can add value for our members with the ADR training video because it presents the components and specific tactics of mediation, which may be outside their core practices. It is user-friendly in presenting a list of key takeaways at the end of each chapter and was engineered to be a very practical resource.
Lorell: Without question, the training video advances the Federation’s broader goals in serving our corporate and outside counsel members because ADR is an essential and increasingly popular tool for getting results for their clients. Further, the video is not a dry CLE presentation; it really does a masterful job of presenting hypothetical cases, covering all stages of the process and including breakout sessions along the way. It is fun to watch.
Editor: Do you have any final thoughts for our readers?
Pratt: I am pleased to report that the video has been well received and used exactly as we intended. I’d like to add in closing that I am a huge fan of The Metropolitan Corporate Counsel and am equally pleased to extend the Federation’s invitation for your corporate counsel readers to request a copy of the video by sending an email directly to Jeff or me. As we mentioned, our Federation stands for sharing knowledge.