Tuesday, September 30, 2014

Guided Choice: A New Approach to Mediation

As you may have seen posted here at the Dispute Resolver late last week, our Division Lunch in Chicago will be discussing Guided Choice. Speaker Paul M. Lurie from Schiff Hardin LLP in Chicago and I will be discussing this approach to mediation that has attracted major users of litigation services, AGC and AAA. This post is intended to give a brief introduction to the concepts underpinning Guided Choice dispute resolution, and it will also raise some questions to consider for the presentation.

The information below has been distilled from articles and additional resources located at the Guided Choice Dispute Resolution blog, located at this link.

The Context: The Current Lay of the Land

As most of us know, construction trials in any forum – whether in an arbitration, in a bench trial, or before a jury – are becoming rarer and rarer. More than 10 years ago, the American Bar Association Section of Litigation featured a story by the then-chair of the Section Patricia Lee Refo discussing what she called “The Vanishing Trial.” As the statistics from Professor Marc Galanter cited in the article mentioned, nearly every type of civil case has seen a marked decline in the number of cases that go to trial.

What happened to these cases? There are a few possibilities. First, with the changes in law related to being successful at the summary-judgment stage, perhaps there are more factually lacking cases that are filtered out before they reach a trial. Second, judges and court systems encourage – some would say pressure – parties to explore settlement options and mediation more frequently and earlier in the process. Third, the ever-increasing costs for trying cases has pushed parties to settle cases. Finally, there often is a business reason to settle a case before trial – risks of outcome,  business distraction and use of resources, relationship preservation and business ethics.

As construction litigators, we encounter pressures from our clients to settle cases to avoid the potential downside at trial. Yet, even when we file a lawsuit in which two parties appear to hate each other more than any two business entities should, we end up settling the case anyway. At that point, we hear complaints from our clients and the other side about how much money they spent getting to what was always the most likely resolution.

This is where Guided Choice comes into the discussion.

What Is Guided Choice?

Since a settlement is almost always the most likely scenario, Guided Choice encourages a faster, earlier resolution of a dispute that also reduces expense Because it is based on standard mediation clauses the Guided Choice  procedures for resolution are incorporated into most  construction contracts without additional language.

The main purpose of Guided Choice is to have a more active, involved mediator who is working to confidentially diagnose the basis for the dispute and suggest  an effective  settlement process before any negotiations begin. Parties should not be required to negotiate until they believe they are ready. Guided Choice helps get them ready.  The mediator is brought into the process very early in the dispute, and he or she is engaged to review the existing problems and identify ways to resolve the case before discovery rumbles onward for years.

For example, the mediator begins talking in confidence to the parties and the attorneys early in the process. This helps the mediator to identify potential areas for impasse before the parties have spent thousands of dollars on mediation statements, experts, depositions, document exchanges, and the like. By identifying these problems early, the mediator can help the parties to engage in limited information exchanges. The amount of information that enables parties to make the business decision to settle is less than the amount needed for a lawyer to prepare for trial. Guided Choice helps the parties recognize the distinction.

Even if an impasse occurs, the mediator may be involved to assist the parties to craft a limited or modified  process for the parties focusing on the impasse issues where positions need to re-evaluated. This may involve the use of experts, Dispute Review Boards and binding or non-binding opinions from arbitrators or judges.. This assistance allows the parties – again, confidentially through the mediator – to design a dispute-resolution process that is appropriate for the size, importance, and complexity of the dispute.

What Are the Questions About this Approach?

As we will discuss in Chicago, this approach raises a number of questions in the minds of litigators. Since much of our presentation in Chicago will focus on these questions, I am only going to raise them here for folks to consider before the presentation.

1.         It sounds like the mediator being involved more in the process is just another layer of expense for our clients. Why would we pay a mediator in this way in addition to all of the other costs in litigating a case?

2.         With the mediator being so involved in the process and the process including deeper investigation than most mediations, it sounds like Guided Choice will delay the process of getting a case to arbitration/trial. Is this true?

3.         Look, all this touchy-feely stuff sounds great, but I know that the other side in this dispute is entirely irrational and unreasonable. Why would I waste my time and the client’s money engaging in a mediation that we know won’t work?

4.         My clients understand mediation is important. That is why we have written step-negotiation clauses into their contracts. Isn't that enough? Shouldn't those executives meet to work things out before we get a mediator involved?

5.         This does not sound like anything new to me. Isn't this the same process we have already in mediation?

6.         Why would I keep a mediator involved after an impasse is reached? That sounds like a waste of time and money and it sounds like it could cause me to have to disclosure trial strategies.

7.         Hold on a second – this sounds interesting and all, but it feels like that my clients and I are ceding control over the negotiations to the mediator. Why should I do that?

8.         Okay, you have me convinced that this is a great idea and will save my clients money, time, and effort. But, hey, I am a businessman too and this sounds like you are taking money out of my pocket. I mean, I want the best for my clients and all, but isn’t this set up going to cost my law firm and me money?

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