Legal View: Litigation vs. ADR - Different strokes for different folks and times

By Steven I. Platt
The Daily Record Newswire

My last column described the cultural, economic and structural changes in the legal and business communities that have transposed
Alternative Dispute Resolution from a “cross-practice” litigators engage in when they are contractually required or court-ordered to do so to a fully-integrated but increasingly separate and distinct set of dispute resolution services to be offered by law firms or other private “dispute resolution firms” and “groups.” The Judiciary has also, albeit belatedly, recognized this primarily economic, but also legal and political reality and begun to provide or at least encourage individual and corporate litigants to seek cost effective and time sensitive alternatives to full-blown litigation.

That trend is now firmly in place and developing to the point where even some courts, specifically the Chancery Court in Delaware, have begun formally to offer other dispute resolution services as alternatives to their traditional inventory of services. This has produced a further change to the structure, operations and culture of mid- to large-sized law firms, albeit slowly because of entrenched resistance based on law office economics and egos.

Until recently, for example, under the prevailing law firm business models and processes, transactions belonged to the corporate department, wills and trusts to trusts and estates and bankruptcy to its own discrete practice areas or boutique law firms. Within these typical structures, disputes have been the exclusive domain of the litigators.

It should not, therefore, be surprising to encounter resistance to this change by litigators who have historically settled almost all of their cases without help from a third-party neutral either privately retained or court-imposed. Many litigators on their own have adapted to the changing client expectations for a faster and less expensive resolution of their disputes by engaging in more extensive and intense settlement negotiations as a part of the litigation process – or, as Robert Marguilies, a business litigator in New Jersey calls it, “Litigotiation.”

Fundamental misunderstanding

This resistance and the reason for it, however, are based on a fundamental misunderstanding of the purpose and processes of ADR. What those who resist the expansion of the techniques used to resolve disputes beyond the traditional litigation process, even when it includes a large element of “litigotiation,” do not comprehend is that the use of ADR techniques is not just to settle the specific dispute before them but to resolve latent client goals and concerns which have led to their dispute. These other concerns almost always include addressing the underlying causes of the dispute as a means of preventing future conflict between the parties or even with third parties.

This is not always the case, as for example where the dispute is purely over money in negligence cases resulting from automobile accidents. But even in cases where professional liability issues are to be resolved, there are clearly other issues and interests to be addressed besides purely dollars and the merits and value of the claims and defenses. These can include reaching a resolution that does not engender future litigation or conflict between the policy holder and the carrier, as well as future underwriting issues between the policyholder and the carrier. There can also be issues and interests related to professional discipline and registration involved.

The resolution of these issues is not easily achieved by lawyers’ standard “position-based” settlement negotiations that typically occur at various stages of a case which is being litigated. Furthermore, it is clear to anyone who has engaged in both that settlement discussions between litigators with multiple and alternating agendas are of a different nature and quality than those led by a qualified, neutral ADR professional committed to only finding an amicable comprehensive resolution to the dispute and the underlying cause of it. The former is most often intermittent, limited, not concentrated (mixed in with litigation issues) and unfocused on a comprehensive resolution. The latter is structured, concentrated and focused solely on a comprehensive settlement of all issues including those which caused the dispute to occur in the first place.

Constrained by case law

Litigators who are not trained as mediators are also likely to confine their position-based negotiations to remedies available through the court where the litigation is filed. This arbitrarily restricts the ability of the parties to satisfactorily and comprehensively resolve their dispute in a way that addresses the underlying issues which produces the conflict as well as eliminate the conditions which might create future controversies.

Finally, position-based negotiations directly between lawyers acting as advocates for their clients are of necessity constrained by case law from the Court of Appeals. The top court has, in effect, made the issue of whether an attorney for a party who recommended a settlement based on what an “expert” now says was “insufficient information” as a result of inadequate or incomplete discovery a jury question. This exposes lawyers to professional liability if there is not universal acceptance that he/she complied with the standard of care within the expert witness community, whose ads can be found in many legal magazines.

This exposure, as a practical matter, can be limited if not eliminated by skillful drafting of retainer agreements and/or settlement agreements. But if it is not, then the attorney in order to insulate himself or herself from a future adverse finding by a jury will instinctively refuse or at least delay engaging in settlement discussions. This will have the effect of adding both unnecessary time and expense to the conduct of the case before even discussing settlement.

So, which dispute resolution technique should the parties use in the courthouse or conference room of the future? I’ll have answers in next month’s column.
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Steven I. Platt, a retired associate judge on the Prince George’s County Circuit Court, can be reached at info@apursuitofjustice.com.