by Andrew Flake
When it comes to our favorite dishes, while we may not ourselves be chefs, most of us can at least name the key ingredients. A great sirloin is cut just so, perhaps seasoned with salt and pepper and some olive oil. Fresh sourdough bread requires fermented dough, with yeast, sea salt, and special flour sprinkled on perfectly golden-brown crust.
But a list of ingredients is not enough, is it? We also need to know exactly how much olive oil, how much heat, how much time in the oven, how long a dish sits — to prepare a great meal, we need to know the how everything fits together, the recipe, the process.
Isn’t that also true with settlement discussions in our cases? Counsel managing commercial litigation, and many times the corporate clients, recognize what needs to happen to get a case negotiated and settled — good rapport or at least open communication among parties and counsel, plus the surfacing of not just positions but interests, plus exchange of sufficient information to evaluate and understand, all handled in a context of trust, good listening, and confidentiality.
We recognize these “ingredients,” but like gourmet meal preparation, that’s not quite enough. In my example, it is the chef — a trained neutral, guiding a thoughtful resolution process — who puts everything together. In mediation, it is the timing and sequencing, the process, the “recipe” that the mediator develops for each dispute, that is crucial.
And not every recipe, or every process, is the same, because no two cases are the same. Unlike a chef, who may employ the same recipe to great success in her restaurant for years, the effective mediator has to adapt and customize the basic process to produce a resolution strategy for every matter.
With that said, I have found that there are several approaches that are particularly useful for our business cases, which often come to us with significant unknowns and differences, both as to facts and as to the parties’ respective views of the case, not to mention very particular intangibles and party-interests having to do with the particular businesses, markets and products at issue.
I want to focus on one of them here, which is the emerging approach of “early dispute resolution” or EDR. It involves helping the parties and counsel reduce uncertainty and improve their decision-making even before the formal or in-person mediation session, using mediator-guided information exchange and easy-to-understand but very powerful decision analysis. My ADR colleague Michael Hawash in Houston, who has worked with other thought leaders to formalize EDR protocols, has used the phrase “dynamic mediation” to describe EDR, which I like.
It resonates with me because I view mediation itself, not as a discrete event, but as a guided process that starts with the first communications with counsel. What EDR or dynamic mediation then accomplishes is adding structure and additional tools to the process with the goal of getting disputes involved very quickly, meaning as quickly as 30-60 days from inception, even pre-litigation, and certainly pre-discovery.
Here’s an overview of how it works.
- Necessary Conditions/requirements: To be successful, counsel for all parties have to be on board, willing to engage in some early-information sharing. Critically, that includes good faith and thoughtful requests and responses for information. The goal is getting enough information and clarity in both parties hands to enable “principled negotiation,” a discussion based on open-minded and sound assessment. As you can imagine, accomplishing this exchange smoothly itself involves assistance from the mediator, and many of the traditional tools of good mediation.
- Opening assessment of case issues: With assistance from counsel, an EDR mediator can help crystallize what the key disputes are as to liability and damages, as well as begin thinking early about some of the “intangible” and business/industry/decisionmaker interests that need to be addressed.
- Information exchange: One of the objections we hear sometimes to mediation is that “It’s too early” and that discovery is needed first. In reality, it is not fulsome discovery, but a much more discrete subset of information, that is necessary and sufficient for resolution. In virtually every business case, a smaller group of key documents speak to the main issues. They are the deposition exhibits and then trial exhibits, the ones that appear again and again. EDR does not look to deploy early discovery, but to surface for the benefit of the parties only that class of “sufficient information” — the answers to questions each side has that will help them make good decisions and engage in principled negotiation.
- Objective analysis and valuation: Among many fascinating studies on cognitive bias, a famous one from Harvard Business School shows that negotiators with the same set of facts consistently overvalue their own positions as compared to others, with collective estimates of success landing in mathematically impossible ranges. This also happens naturally when counsel and parties view their own positions, reinforced by another engrained tendency to reject information that does not support preexisting beliefs. EDR brings excellent techniques of decision analysis to help both sides better understand their own and their counterpart’s risks and importantly, expected case value.
- Final resolution: With the proper case valuation in hand, and intangibles and interests surfaced, the mediator then helps move forward a principled negotiation. That could mean resolution before the formal mediation session, but at a minimum, with an early dispute resolution process in place beforehand, the parties start a mediation session already well on the way to a deal. They can bypass the positional bargaining and challenges that can often confront us at the beginning of more traditional mediation.
If you’ve read the policy discussions in Richard Susskind’s “Online Courts and the Future of Justice,” you’ll know the concepts here are not brand new, though they are in many ways, transformative. Susskind focuses more on technology and the courts, but he shows that where parties have a pre-court process in place that helps them assess their case early, with good information and a neutral guide (or app/program), disputes can be avoided entirely. The same is true with EDR, which itself has a wider range of applications than does the projects Susskind discusses to complex commercial cases.
Given enough time and dispute-resolution resources, every case will eventually be resolved, with the most time and resource-intensive route remaining traditional litigation. Do you remember the “Family Circus” cartoon, in which the little boy, Billy, would meander all over the place first instead of just going where he was supposed to? I think litigation, and even settlement discussions themselves in some cases, can feel like that to the lawyers and parties. What I like so much about EDR is that it gives us a predictable shorter route.
That is especially true when deployed by a trained neutral. Putting together the traditional skills and art of mediation — the ability to be curious and listen deeply, creative thinking about solutions, empathetic communication with the parties, and guided negotiation — with the process-orientation and tools of EDR really does gives us a great recipe for success.
If you have a commercial matter that could benefit from mediation, but have been wondering “is it too early,” it’s most likely not. Give EDR a look.