ADR Preparation Measures

As alternative dispute resolution (ADR) methods become more popular and complex¹ following the Covid-19 pandemic,² it is important that parties make early investments in pre-dispute measures to facilitate ADR. These measures make ADR a less costly and more expeditious alternative to litigation.

Trends in Modern ADR

Adversarial litigation, generally understood to be costly and undesirable, is only becoming viewed as more onerous and disruptive.³ At the same time, however, proactive pre-litigation use of ADR has declined.⁴ This is in part because, as demand for ADR increases, more lawyers untrained in ADR are participating, deploying familiar adversarial techniques.⁵ Additionally, inertia and emotions make it difficult for parties to constructively negotiate to a resolution.

This dilutes the usefulness of ADR as an early intervention tool to resolve disputes with a participant-centered, interest-based approach. One primary goal of ADR is not only to get a deal, but also to resolve the underlying dispute itself, prevent escalation of conflict, and preserve relationships.⁶ To accomplish these lofty goals and prevent the further dilution of participants’ direct control over ADR, parties need to implement early pre-dispute measures.

Legal observers are beginning to recognize this trend.⁷ Already, in cases involving complex commercial disputes, multiple parties, or strong emotional overtones, parties recognize that early mediation measures facilitate quicker and less expensive negotiated resolutions.⁸ This recognition need not remain narrow. As a mediator, I often hear parties express how contact with the mediator is the first time they have had meaningful discussions to resolve the dispute. This demonstrates the need for pre-dispute efforts. The benefits of pre-ADR contact include:

• Saving time and costs;
• Less entrenchment and more mobility in crafting creative resolutions; 
• Easily expressing underlying needs and interests;
• Less sunk cost bias;
• Fewer surprises;
• Confidentiality that shields parties from reputational risks associated with a public dispute;⁹

What Pre-Dispute ADR Measures Can Clients Take?

Most importantly, clients should include pre-dispute mediation and arbitration clauses in contracts. A written agreement provides security in the event that ADR becomes necessary. Without such a written agreement, resolving the dispute inside or outside the courtroom will almost certainly be more challenging and will involve a lot of he-said-she-said arguments.¹⁰ Standard components of these clauses often provide:

• A statement of intent;
• The scope of the agreement;
• The applicable forum and law (CBA ADR, AAA, JAMS, private selection);
• Appointment of mediators and arbitrators;
• Other procedural rules.¹¹

Additional measures parties can implement include:

• Considering, from the outset, how to pursue a faster and less expensive process;
• Considering a mediator for issues that parties suspect will not become a problem, yet may later catch the parties off-guard;
• Seeking legal advice from a lawyer who is experienced with ADR, rather than the best litigator, as early as possible;
• Discussing with counsel any conflicts of interest, whether mediation is court-ordered or voluntary, deadlines, experts, whether or not to give an opening statement, and more;¹²
• Preparing for an increasingly diverse workforce;¹³
• In challenging situations, hiring an experienced mediator to assist with strategy on resolving disputes pre-litigation.

A well-trained and highly experienced mediator can guide parties through every step of the ADR process. They can also work with you to develop appropriate pre-ADR measures.

1 “Record-breaking caseloads (and amounts in controversy) have been seen across most of the arbitration institutions.” “The ICC reported 946 new arbitration cases in 2020, the highest since 2016.” Mica Nguyen Worthy, 2021 Trends in International Arbitration, Cranfill Sumner, LLP, (Apr. 23, 2021) (https://www.cshlaw.com/resources/2021-trends-in-international-arbitration/).

2 “Today’s pandemic [has] interrupted the normal progression of most cases regarding when they will go on trial. As a result, mediation has assumed a more important role in the process of disposing of cases by settlement.” Thomas F. Reilly, The Impact of Pre-Mediation Caucuses on Efficient and Effective Mediations, The Legal Intelligencer (Feb. 3, 2021, 10:38 AM) (https://www.law.com/thelegalintelligencer/2021/02/03/the-impact-of-pre-mediation-caucuses-on-efficient-and-effective-mediations/?slreturn=20210614140434).

3 Flavia Pizzino, Think Before You Arbitrate – Practical Considerations to Make the Most of Arbitration, Clyde & Co. (Jan. 18, 2021) (https://www.clydeco.com/en/insights/2021/01/think-before-you-arbitrate-practical-consideration). See also Michael Z. Green, Mediating Psychiatric Disability Accommodations for Workers in Violent Times, 50 Seton Hall L. Rev. 1351, 1388 (2020) (“a survey of both employers and employees indicated that both groups agreed that ‘litigation is unfair.’”). 

4 Nina Meierding, Looking to the Future: Is There Still A Place For Proactive, Early Intervention Mediation in Our Changing Field?, Mediate.com.

5 Id.

6 Id.

7 See, e.g. John S. Kiernan, Reducing the Cost and Increasing the Efficiency of Resolving Commercial Disputes, 40 Cardozo L. Rev. 187, 205 (2018).

8 Hon. Richard J. Billik, Jr., The Benefits of Pre-Mediation and Post-Mediation Contact in Commercial Mediation, ADR Systems (Feb. 5, 2016) (https://www.adrsystems.com/news/the-benefits-of-pre-mediation-and-post-mediation-contact-in-commercial-mediation/).

9 Pizzino, supra note 4.

10 Michael Paiva, 8 Proactive Steps for Avoiding Litigation, Rodrigues Paiva, LLP (https://rplawyers.ca/8-proactive-steps-for-avoiding-litigation/).

11 ADR Times, A Predispute Arbitration Clause – Arbitration Agreement Explained (Mar. 17, 2021) (https://www.adrtimes.com/predispute-arbitration-clause/).

12 Reilly, supra note 2.

13 Worthy, supra note 1.