Dispute resolution: what do clients really want?
In a word, efficiency. A more efficient way of getting disputes resolved effectively, while minimising waste, including time and money.
Yes, of course parties want justice and resolution. But, according to last week’s Global Pound Conference Report, they also want an efficient way of getting it, and more thought needs to be given to bringing appropriate resolution in acceptable timeframes and at realistic costs. That means clients and advisors being clearer, not just about what they want to achieve, but about the best way of getting ‘the other side’ to give them what they want.
The Report recommends looking at ways of resolving disputes that combine adjudicative and non-adjudicative methods, and being more flexible and collaborative than has traditionally been the case. The suggestion of a more ‘collaborative’ approach may sound heretical to traditional litigators, but not to a new generation of lawyers who have grown up in an information sharing culture.
There was near universal recognition from contributors (including parties and in-house counsel, private practice lawyers, judges, academics, mediators and arbitrators) that:
(a) Parties need to be encouraged to consider processes like mediation before they commence adjudicative proceedings
(b) Non-adjudicative processes, like mediation or conciliation, can work effectively in combination with litigation or arbitration.
Disruptors like technology and globalisation may have changed the business landscape beyond recognition but, according to the Report, dispute resolution has yet to catch up. The Report lays the blame for this on external lawyers, claiming that they are the primary obstacle to change. Surprisingly, the Report found that the reason that advisors prefer litigation as a process was less about the potential for them to earn fees, and more to do with a lack of familiarity with other dispute resolution processes.
So who is going to make the change happen?
Well according to the Report, in-house counsel. Disputes are generally about protecting corporate value and we control the purse strings.
The Report also highlights a key discrepancy between how external lawyers see their role when it comes to dealing with disputes, and how clients would prefer their lawyers to behave. While external lawyers see their role as their client’s advocate, Clients increasingly want to see greater collaboration from their advisors. As two of the three main areas where organisations engage external lawyers are for contentious legal work and dispute management, the pressure for external lawyers to adapt is likely to intensify, while we all discover ways to minimise unnecessarily expensive or drawn out procedures, reduce risk and find more efficient outcomes.
Better use of Dispute Escalation Clauses
One way to do this may be to consider inserting mediation into contractual dispute escalation clauses more often, especially given that while 73% of international contracts provide for arbitration, only 29% of cross-border disputes in fact use it.
The Report also advocates giving more thought to designing appropriate resolution processes and that’s where experienced neutrals can really assist by making the process easier, and ultimately more effective and efficient too.
Here’s a link to the full report.
Andrew is also co-hosting an event with us on Tuesday 9 October - Cutting the cost of conflict: Getting disputes resolved and getting the result you want. For more information click here.