By Michael D. Levelle
Published in the Sussman Shank LLP Newsletter Summer 2008
It is well known that "reasonable people will disagree." Historically people generally used the courts as the primary form of dispute resolution which is a rights-based system and structured on an adversarial method of adjudication. In court a neutral decision-maker decides disputes, after the adversaries have argued the dispute in a contested proceeding.
However, since the 1970's there has been a steady trend for the courts to turn to alternative dispute resolution methods ("ADR") that are non-adversarial and are designed to reconcile the disputants' interests, rather than focus only on the disputants' rights. ADR has greatly expanded in the last several years to include many subjects and is used in almost every area of conflict resolution.
Dispute Resolution Methods
Generally, ADR refers to a wide variety of alternatives to litigation designed to manage and quickly resolve disagreements at lower cost and with as little adverse effect as possible on the relationships of the parties involved.
There are basic differences between adversarial and non-adversarial methods of dispute resolution. In the adversarial system if one disputant wins, the other must lose, and disputes may be resolved through application of a rule of law by a third-party. However, when the non-adversarial method of mediation is used, all parties can benefit through a creative solution to which everyone agrees. Each situation is unique and therefore need not necessarily be governed by any general principle other than acceptance by the parties, and possibly court approval.
A variety of non-adversarial methods of dispute resolution such as negotiation, conciliation/facilitation, and mediation have come into increasing use. The following factors can be considered in the determination of whether one of these methods can be used for the particular dispute:
- the nature of the relationship between the parties
- the environment in which the dispute exists
- the issues involved
- the present posture of the dispute
- the further costs of resolving the dispute through litigation
- the concern for privacy
- the relationship of the parties and with their attorneys
- the likelihood of settlement/resolution.
Also to be considered is whether the procedure will affect subsequent litigation, if settlement/resolution is not achieved.
Negotiation between lawyers to resolve their clients disputes has traditionally been the process used to arrive at a settlement of some disputed matter. However, the downside to the parties' lawyers handling negotiations is the fear of counsel that the first party to propose settlement weakens its negotiating position which may be viewed as a lack of confidence in one's case. As a result, both sides concentrate on discovery and preparation for trial to strengthen their cases for future negotiation while legal costs mount. The "catch-22" to this approach is that after so much energy and financial resources have been put into a case, the party then has little incentive to settle.
A new approach becoming popular is to have a third-party facilitate the negotiations with the parties and their lawyers being involved in the process. A neutral intervener ("facilitator") manages the discussion process. The facilitator's primary focus is on having the participants identify problems and procedures for resolving those issues. However, the facilitator refrains from offering settlement suggestions. This way the parties retain control over the process, decide what the important facts are, and together decide the best solution.
Mediation is the ADR process by which a neutral third-party works with disputants to reach a mutually agreeable resolution. Consequently, mediated settlements (and facilitated negotiations) have greater durability. The past decade has seen significant expansion in the acceptance and use of mediation as a process for handling disputes in the legal and business sectors. Mediation works well for disputes that have multiple integrated issues or where the resolution of one issue depends on the resolution of another. There are numerous advantages to the use of mediation:
- maintenance of at least some, if not all, privacy
- opportunity to deal with the emotional issues of a case
- best opportunity to preserve family and other ongoing relationships
- flexibility to construct a resolution the parties perceive as "fair"
Another advantage of mediation is that the parties retain a significant amount of control over the procedure and outcome of the case. However, this advantage can also be a disadvantage. Because the parties retain control, there is the potential for a more powerful party to overcome a weaker party. A power imbalance may arise in a variety of ways. It is the responsibility of the mediator to maintain the balance of power.
There are various models of mediation. One form of mediation, possibly the most recognized, is frequently called "transformative mediation." In this form of mediation, the mediator's entire role is to facilitate a conversation without a predetermined end. The mediator offers no advice or substantive direction as to either content or process. The mediator's focus is not on settlement per se, but on support for deliberation and enhanced perspective. The belief is that if the mediator supports communication between the parties, settlement will take care of itself.
"Facilitative mediation" is another model frequently used. It is similar in many ways to transformative mediation, but there are significant differences. First, the object of facilitation is to specifically resolve or settle the dispute. Second, in order to attain that goal, the facilitative mediator routinely offers both advice and substantive direction on matters of process.
A third type of mediation that is becoming more widely used is referred to as "evaluative mediation." Under this model, the mediator confidentially provides expert case evaluation (assessing strengths and weaknesses of each party's case), substantive settlement recommendations, and attempts to persuade the parties to accept those proposals. However, the parties retain the right to reject the mediator's advice Thus, there is a clear step beyond the transformative and facilitative models, which both maintain the mediator should have no role in influencing the ultimate outcome of the process.
When you find yourself involved in a dispute, consider early on whether there is an alternative to litigation. Alternative dispute resolution offers attorneys, their clients, and all other interested parties the opportunity to work together and avoid unwanted, unnecessary, and expensive litigation.
Related Practice Areas
Estate and Trust Administration/Dispute Resolution