Planned Early Dispute Resolution


By: Peter W Benner

About a year ago I wrote an article published here about the benefits of and barriers to early mediation. That continues to be one of my favorite subjects—even a mantra—for a few reasons.

First, despite the increased incidence of mediation to help resolve legal and other disputes, mediation early in the life of a dispute remains slow to take hold, despite its clear benefits. I addressed that problem in the prior article and will summarize below.

Second, there is no doubt that cognitive biases drive decisions within a conflict. These biases are largely responsible for escalating litigation in intensity cost and time to resolution, all to the detriment of clients, sometimes substantial. Early mediation helps counsel and the parties identify and manage those biases, allowing for improved decision-making leading to solutions that advance client needs rather than just reconciling legal positions.

Third, the system is stacked against adoption of informal early resolution processes because we operate largely within an adversarial structure that, most often,reflexively defaults to litigation. Once litigation is undertaken, getting on a resolution track in a positive way within any reasonable time becomes very difficult. From my experience, truncating the litigation process in favor of superior resolution opportunities runs counter to lawyer self-interest and litigation training, requiring considerably more than an ordinary dose of client sophistication and determination to overcome.

Over the last few months, I have been blogging with Prof. John Lande (see http://www.indisputably.org/?p=7464) of the University of Missouri School of Law and the author of Lawyering with Planned Early Negotiation: How You Can Get Good Results for Clients and Make Money, among many other credentials relating to the value of what Prof. Lande calls Planned Early Dispute Resolution (PEDR).   Our shared thesis is that PEDR, or something like it, is underutilized, perhaps vastly so, notably in business cases where it has particular value to the disputants. And we’re not entirely sure why.  After all, the potential value, including cost savings and quicker resolutions, is so clear, with no risk or downside if managed correctly.

Prof. Lande began the blog with a refrain he had heard from lawyers representing large corporations: “Early mediation is a waste of time”. Among the concepts we then proceed to address in our blog exchange is that the perceived waste of time results more from poor planning and execution, and misplaced objectives, than from any inherent limitations of the approach.

Lawyers often operate under the misapprehension that they cannot productively engage their client in mediation until formal discovery has taken place and the parameters of the risks are more fully understood. What they miss, or for whatever reason do not take the initiative to explore, is how they can more quickly and cost-effectively reach that point through informal planned processes such as mediation, or even direct party negotiation with lawyer assistance. Instead, the dispute defaults to the adversarial positioning of the litigation system and then works its way through the ponderous and expensive steps of motions and discovery (including of ESI!) before a lawyer comes to the point of raising with the client the possibility of mediation to avert the intolerable risks and costs of a trial that have materialized into clear and present view—after two or more years and litigation costs with lots of zeros.

Regarding cognitive biases, a great deal of research and writing has been done that makes plain their effect on prolonging and intensifying litigation. Lawyers, as much as they might like to believe otherwise, are susceptible to those biases, and litigators may have them even more deeply embedded. Confirmation bias (filtering facts and other data to support your preconceptions, while rejecting non-supporting information) runs rampant; the sunk cost bias makes cases more difficult to settle constructively the further they advance; loss aversion deters parties from confronting the opportunity for resolution until they must approach settlement discussions only out of necessity. These are just a few of the several biases that have been documented which adversely affect decision-making within a dispute, whether or not the subject of litigation.

In the hands of a skilled neutral mediator or facilitator operating early in a dispute on the basis of interests rather than purely evaluating legal positions, those biases can be identified to enable more rational decisions regarding a mutually acceptable, and even advantageous, outcome. Without such neutral intervention, biases can well be too powerful (and undetected) to overcome, inevitably leading both the lawyers and the parties to poor decisions and bypassed opportunities, causing the dispute to drag on much longer than necessary or beneficial to the client.

A lot of lip service is given to reducing the cost and delay in litigation. Much of that is focused on cost containment, budgeting and litigation management. Missing is a greater awareness of the big picture of what is driving the dispute–biases, emotions, misconceptions about the other party–and how effectively to address those in order to reach the most favorable resolution possible as early as is appropriate.

One common misunderstanding is that early mediation must be designed to reach an early settlement. While early assistance from a creative, insightful mediator can lead to that result, the process has a much more comprehensive utility. Issues can be narrowed, lines of communications opened in order to help dispel misconceptions and implement a structure and strategy for getting to the key issues necessary to unlock the opportunity for resolution. Even if a settlement is not reached immediately, the chances that the dispute will not take on an unbearable life of its own, and can be resolved sooner and much less expensively, are increased dramatically.

A principal benefit to early mediation in the hands of a skilled, experienced and empathic mediator is the opportunity to focus on interests and what really matters to the parties for an optimal outcome to occur, rather than the posturing and outflanking the opposition on factual and legal positions as so often occurs in late stage mediation. By engaging early, focusing on what caused the dispute in the first place and what they need from a resolution, rather than who is right or wrong or will win or lose, the parties can accomplish much more than litigation ever could, regardless of who wins or loses. The parties, who often stand anxiously on the sidelines of litigation as the lawyers duke it out, can become directly involved. Once that happens, the hostility and other emotions causing the dispute can more readily be diffused, discussions become more productive, and even inventive, and the opportunity for, as well as likelihood of, a favorable resolution is enhanced significantly.

Lastly, but by no means least, early “reframing” of the dispute can change the game. Reframing is an essential ingredient to the mediation process at any time–asking the disputants to pause, take stock and think about the problem from different perspectives, including that of the other party. That encouragement from the mediator helps reduce the impact of corrosive biases, allows the discussion to move toward interests and needs, and brings the parties closer together through diminishing perceptions of their opponent being “the other” with whom they have nothing in common, when that is virtually never the case.

As strong a case for Planned Early Dispute Resolution as this may be, as Prof. Lande and I addressed in our blog exchange, change is most likely to come when clients themselves understand the value of well-conducted early resolution efforts, which goes beyond their current focus on cost control and litigation management.  Litigators trained in the adversarial system, and whose livelihoods depend on the continuation of that system, do not possess, by and large, the motivation to accomplish this shift in paradigm toward lower-cost, quicker and better resolutions that clients themselves must demand for pervasive change to occur.  Early mediation has not caught on as much is it could because it has not been client-driven.  Impressing upon clients that they have it within their power to move the case toward a process that can accomplish a better, faster and less expensive result will hasten the change that thus far has been slow to occur.