As the song goes, every time it rains, it rains pennies from Heaven. Every CFO’s dream you might think. These days of extreme weather and medical events cause a perfect storm of times and tides to test even the best prepared of businesses.
Cash is King in good times or bad. Courts are bad for cash at any time.
Those General Counsel who have prepared well will have ensured there are appropriate dispute resolution clauses within their organisation’s contracts to nip expensive disputes in the bud long before they flower. Tiered dispute resolution clauses are increasingly used and usually involve conversation at the heart of each tier.
In older contracts there are usually clauses providing the classic binary solution: courts: win/lose.
Civil justice systems across the World are finding Backlogs of cases growing as a result of Lockdowns. The Backlogs are a deterrent in themselves. Some jurisdictions of course had severe Backlog issues before the Pandemic struck. For those jurisdictions the Backlog issue is particularly acute.
The solution is a non-binary approach introducing, if you like, the Multi-Door Courthouse approach that is seen in, for example, Nigeria.
Court users are offered a range of options from the binary – trial = win/lose to the nuanced possibilities of mediation with its potential to preserve commercial relationships whilst resolving conflicts and possibly avoiding altogether the damaging effects of cash being tied up in a dispute. The Courts in their binary mode serve only to burn cash which might otherwise be available for inward investment to grow business.
The State of New York, for example, has been developing a non-binary approach for some years and these developments led to the introduction of a system of State wide presumptive mediation for a range of claim types from commercial, personal injury and matrimonial cases to estate matters.
A Press Release issued by the New York State Unified Court System on 14 May 2019 explained:
“…expanding the scope of ADR to include the broadest possible range of civil case types ̶will play a significant role in decreasing costs to the parties and the judiciary and improving case outcomes as well as reducing case delays.” https://ww2.nycourts.gov/sites/default/files/document/files/2019-05/PR19_09_0.pdf
Unsurprisingly this has transformed the scene for ADR in the State of New York with mediators being overwhelmed by work which is processed on paper rather than online. These outcomes are inevitable when a civil justice offers a range of conflict resolutions options.
In Italy mandatory mediation information sessions were introduced in 2011 and saw the number of such events increase from 1,000 to 250,000 in its first year of operation. What is needed and was provided is more mediators and online management of the process.
In Turkey a similar system (which now includes commercial disputes) led to the recruitment of a professional cadre of mediators managed through Mediation Bureaux and an online platform developed by the State.
In New York State trial Attorneys have adapted well to the new landscape of litigation where automatic presumptive referral to ADR is now a required step before a claim is commenced in Court. As a measure of the State’s commitment to this programme The Office of Alternative Dispute Resolution has been established to spearhead future development of the project.
Automatic referral (with appropriate carve-outs) overcomes the concern, which many General Counsel will share, that a system of ADR depending on the alleged defaulter’s consent to proceed simply will not happen. Bringing people together to talk and resolve their issues is the State’s responsibility and part of its duty to make the most of the finite (and taxpayer funded) resource of Court and Judge time keeping those for the few disputes that cannot be resolved through presumptive ADR.
In the UK a serious Backlog of civil cases has emerged which is quite unusual for the UK. Whilst the UK was always a jurisdiction which suffered from slow access to trials it has never experienced near stationary conditions of case progression. Unsurprisingly thoughts are beginning to turn to compulsory ADR and a consultation is expected in the near future to explore that option. In a recent speech to the Law Society of England and Wales the recently appointed Master of the Rolls, Sir Geoffrey Vos – the second most senior member of the Judiciary, explained the significant economic benefits of resolving disputes early and using ADR to achieve that desirable end.
One result of an ADR by default approach to conflict resolution will be the development of new forms of ADR especially in the hybrid context. In London an ADR Service Provider, Independent Evaluation, has developed a hybrid of neutral evaluation combined with facilitative mediation which is attracting interest.
These are exciting times, despite the Pandemic, and a period from which civil justice across the world will emerge stronger, more resilient with enhanced effectiveness for getting business (and cash) moving!
Tony Guise is the Director of DisputesEfiling.com the specialist provider of ADR management platforms. He is a Past President of the London Solicitors Litigation Association and former member of the Civil Justice Committee of the Law Society of England and Wales.