Page 10 - July August 2021 CBA Report
P. 10
Feature
Planned Early
Dispute
Resolution:
The Why and How
Protracted disputes remain a major concern for most busi- nesses where time truly is money. Most disputes (95% - 99%) are resolved before they get to trial or the arbitra- tion hearing. Yet too often parties and their attorneys do not hire mediators until late in the litigation, after months or years of expensive and distracting discovery and other pre-trial activities. Since most cases eventually settle, companies and their attorneys should prioritize, plan, and implement strategies for resolving disputes as early as possible, before the costs, disruption, and risks mount.
Creating a “Sweet Spot” for Early Resolution
The typical rationale given for delaying mediation is that the parties need more information about the claims before they can make an informed settlement decision. Another frequent assertion is that the parties are “not ready” to settle and need to feel some “pain” of litigation before they will be motivated to make mean- ingful compromise. So almost by default, litigation discovery and motion practice often take on a life of their own until the parties either become exhausted with the process or otherwise reach a “sweet spot” where they are ready for mediation and serious settle- ment discussions.
Rather than wait for a settlement “sweet spot” to occur through protracted litigation, parties and their attorneys can hire a mediator experienced in early dispute resolution to actively help create conditions for a successful early mediation soon after the dispute arises. Depending on the circumstances, the mediator can be hired before or after a lawsuit or arbitration is filed, but the mediator should be hired early enough to be able to help the parties and their attorneys collaboratively develop a dispute reso- lution process tailored to their needs and circumstances.
Although the process should be tailored to the unique aspects of each dispute, there are several key common features of a successful early dispute resolution process.
By Scott Gurney
10 l July/August 2021 CBA REPORT
www.CincyBar.org
1.AGREEMENT TO MEDIATE
Of course, since mediation is a consensual process, the parties must first agree to mediate. The best time to agree on an early dispute resolution is when negotiating and drafting the dispute resolution clause in the contract, while the parties are still in the “honeymoon” stage. The clause typically will require medi- ation before litigation or arbitration is filed, spell out when and where the mediation is to occur, and provide other details of the mediation process. To further streamline the process, the parties can also designate a mutually agreeable mediator by name in the dispute resolution clause.
If there is no mediation clause in the contract, the parties can – and should – agree to mediate as soon as practical after a dispute arises that cannot be resolved by direct negotiations. Despite the commonly held misconception, a request to mediate is not a sign of weakness.
2.EARLY RETENTION OF A MEDIATOR
Retaining a mediator as early as possible, before signif- icant pre-trial discovery and motions, is key to the early dispute resolution process. If mediation is delayed until late in the liti- gation process, the parties may be ready – or feel forced – to negotiate, but the parties’ relationship will likely have deterio- rated and their positions become further entrenched, making settlement more difficult. The parties should retain a medi- ator experienced in the early dispute resolution process as soon as possible so the mediator can help customize the settlement process for their situation. If one party is reluctant to partici- pate in early dispute resolution, the mediator can confidentially explain why it may be in that party’s best interest.