The quality and suitability of the process in which the parties engage, and entrust to Peter to manage and work to successful conclusion, makes all the difference.
The right process and an accomplished, insightful neutral are critical to making the most of dispute resolution alternatives to litigation.
Do not underestimate the value of a third-party resolution professional skilled at developing and guiding this kind of dynamic approach, particularly in the early stages. Such assistance will have a significant impact on moving the case through barriers of like-minded group dynamics and confirmation bias, which are powerful forces that fuel escalation and impede resolution.
Enhanced process design that uses the following steps and approaches will cut costs and produce faster and better results:
- Begin at the outset of a dispute to consider implementation of processes that will allow for positive, even informal, interactions with the opposite party to diminish escalation rather than promote it. No early concessions need to be made to get this underway.
- Focus on interests and objectives within the dispute and design resolution processes–straight mediation being only one option–tailored to achieve them.
- Create opportunities for a real exchange of ideas between both counsel and the parties. Disputants should be encouraged to see the opponent not as “the other” whose interests are antithetical to their own, but rather someone with whom to work to discover mutual interests and goals that uncover value and common ground, leading to a settlement not otherwise obtainable.
Effective Case Management Through Process Design
- Active and adept case management is critical to reducing litigation costs, avoiding unnecessary delays, and producing favorable outcomes.
- Courts and current state and federal rules recognize the importance of case management and require litigants to collaborate to alleviate the burden on the court.
- Courts usually do not have the resources to supervise truly active and tight case management plans or provide sufficient oversight early in the case that might avoid substantial expense.
- Due to the increasing burden and expense of litigation, parties in a dispute are looking for means to manage expense and expedite positive outcomes.
- Despite the success and clear advantages of private mediation, disputants customarily do not retain a professional neutral early in the case to assist in streamlining and moving the case forward without wasted time and expense. That role, by default, is left to the courts, which generally do not provide the attention and value available through private, professional assistance.
- We know that positive settlements become increasingly difficult as the expenditure of financial resources and time causes clients, and even counsel, to get dug in and become emotionally invested in the case.
- The cost of the neutral’s services can be recovered many times over in a more well-managed case that starts with realistic expectations and leads to a more prompt and satisfactory outcome than would have been possible by relying solely on judicial oversight or self-management.
- It boils down to a simple matter of spending a modest amount on a seasoned professional to reduce expense, more effectively pursue litigation strategy, and find a better resolution.
Please call or email Peter to obtain process illustrations most suitable to your dispute.
Simply put, dispute resolution can be substantially improved by attention as early as possible to how the dispute can best be resolved. See my blog post on the accompanying page.
Very little attention generally is paid by lawyers or other disputants to what can be called “process design” early in a case. That needs to change, and my goal is to see that it does change, because it can make all the difference in any number of cases that currently drag on far too long, become way too expensive, and for which settlements are prompted by late stage exhaustion with the dispute and avoidance of the risk of trial.
For purposes of illustrating the mechanics and value of process design, I include a couple of examples and will update them regularly through my blog and on this site.
If you would like more information on how I can assist with process design in your particular case, please contact me at firstname.lastname@example.org or by using the contact page of this website. Further process illustrations are available upon request.
For a company. Ajax Distributors has entered into a requirements contract with Delta Manufacturing to supply all of its requirements for a specially designed and engineered product that Ajax sells at a competitive price in the market. Sales volume increased substantially from 2000 through 2007, and declined quite dramatically from 2008 three 2011. During that period of declining sales, Ajax worked with Delta on product modifications to address certain customer complaints and reduce manufacturing costs to make the product even more competitively priced. The two companies developed a close working relationship.
Those joint efforts began to pay off in 2012 as sales picked up. In the second half of 2012, Ajax landed its largest contract ever to supply over $2 million a year of the product to Big Box Inc., that had the prospect of increasing up to $5 million annually once economic conditions improved.
By the beginning of 2013, the prospects for both Ajax and Delta were better than they had been in years. But as Delta began increasing production quantities of the product to fulfill the Big Box contract requirements, quality began to deteriorate, leading to a spate of returns by Big Box retail customers.
Delta brought in a production consultant, who make the initial determination that the cause of the quality problems was attributable to the increased manufacturing quantities and the cost reduction production adjustments on which Delta and Ajax had collaborated during the low sales period.
Experiencing continuing customers returns for product defects and failures, Big Box issued a notice of immediate termination of the contract with Ajax and made demand for $500,000 in damages for the costs and lost business relating to the returns, as well as the price differential anticipated for a replacement product.
Ajax notified Big Box that the contract called for a 30-day cure period, and that Ajax would work with Delta to remedy the quality problems within that period. Big Box responded that the damage had been done and that cure was infeasible, rendering the cure provision of no effect.
Each party retained separate counsel. Big Box’s counsel notified counsel for both Ajax and Delta that it intended to file suit as soon as a complaint could be prepared.
Ajax’s counsel, having just attended a conference on the merits and means of implementing a process design solution as soon as litigation was threatened or initiated, suggested to counsel for Delta and Big Box that they hold a meeting, to which he would bring a proposal for addressing the dispute. Seeking to put up a strong front, Big Box’s attorney agreed to meet, but indicated she would file suit in any event and deliver the complaint at the meeting.
Most litigation counsel operating under current practice would either abandon the meeting or take unwavering, and even antagonistic, positions at any meeting, readying themselves for extended motions and discovery practice—and in doing so they would be passing up a tremendous opportunity. Compare these two scenarios:
- A. No meeting occurs, or if it does, both Delta’s and Big Box’s counsel say they need at least six to nine months of discovery to have sufficient information to fully evaluate the respective legal positions and trial prospects. They proceed on that course. Within one year of filing the complaint, each party has spent in excess of $200,000 on attorneys and expert fees, as well as consultants for e-discovery. After 18 months, Big Box files a motion for summary judgment, incurring another $25,000 in fees per party. The federal judge presiding over this diversity case issues a decision a year later denying the motion. So, that decision is issued two and a half years after the case had been filed, with a trial date no sooner than six to 12 months later. In the meantime, the parties have completely terminated their business relationship, sales for both Ajax and Delta have suffered dramatically, and Big Box took over six months to find a replacement for the Ajax/Delta product, losing considerable sales to competitors. Costs of trial remain, and each party has confided to its litigation attorneys that they do not want to incur further cost or burden in the litigation—they have had enough.
This type of scenario has been repeated over and over again within the system in which litigation is currently practiced. Instead, consider this alternative:
- B. The meeting that Ajax proposed does occur and is attended by senior level management for Delta and Big Box. The CEO for Ajax brings with her a proposal that she has prepared together with her outside counsel for a process referred to as “co-mediation”, as follows:
appoint a team of two neutrals, one of whom acts as a process-oriented, mediator and the other, who is preferably a respected former judge known for strong analytical and persuasive abilities, acts evaluatively (the “conciliator”).
The neutrals work closely as a team with complementary roles: the mediator focuses on process issues and promoting connections and positive interactions among the parties to allow for incremental agreements building a foundation for and momentum toward an overall resolution; the conciliator addresses substantive issues, providing legal and factual analysis and conclusions, proposals and reality checks.
This approach confers the advantages of co-mediation. The judge gives each party a non-binding, although persuasive, evaluation in a private meeting and works alongside the mediator, who can focus on mediating in a facilitative or directive way, depending on the case or the stage of the process. The evaluative component of this hybrid process lowers the risk of overconfidence bias by both parties or their lawyers and facilitates the job of selling the mediated outcome to the respective constituencies.
The parties proceed with this approach which, in short, leads to a settlement that reinstates their relationship upon reimbursement to Big Box of $75,000. Manufacture and sale of the repaired product resumes almost immediately. This positive business outcome would not have happened had the parties proceeded only with the litigation—and they collectively have saved over one half million dollars in legal fees, have avoided uncertain protracted litigation and have reached a result far more advantageous than could have been possible in litigation. The cost of both neutrals totaled $30,000, which expense would had value even had the case not settled, because the process could have resulted in streamlining of discovery and case development, thereby saving the parties well in excess of that cost on terms of legal expense and time.
This is not fantasy, but because it is “outside the box”, it is not commonplace, as it should become with more creative approaches to dispute resolution process design. Breaking out of the old mold will lead to superior, less costly and faster results.