Editor: What are the key components to a successful ADR program?
Dreier : I see six basic components to a Corporate ADR program: Executive Education; Counsel Selection; Administrative Assistance; Neutral Selection; Pre-hearing Preparation; and Resolution Assessment.
First : Educate management. Objective studies prove the effectiveness of ADR programs when they are supported by both top executives and line management educated in ADR principles.
Second : Select counsel skilled in mediation and arbitration, but capable of litigation if the process fails. Counsel should understand the client's long-term interests. The key is counsel attuned to reasonable resolution, not the "killer" attorney.
Third : Choose administrators such as AAA, CPR, or the like, for staff services when the complexity of the case warrants the expense.
Fourth : Maintain a list of competent and sophisticated mediators and arbitrators with expertise in the subject matter, a good track record, and an available venue for hearing the case. A good neutral maintains rapport with counsel and parties and helps them resolve the matter.
Fifth : Support a full preparation for the mediation or arbitration sessions so that all understand the best and worst alternatives to a negotiated agreement. Be sure that there is adequate discovery, but not in a litigation mode that can cause costs to skyrocket.
Sixth : Be open to a reasonable resolution. A willingness not to demand the last dollar can result in tremendous savings in costs and can create future goodwill.
Meanor: The hallmarks of arbitration are economy, efficiency and privacy. The agreement to arbitrate should spell out the jurisdiction whose law should govern, except for conflicts of law. Discovery should be limited. Interrogatories should be no more than twenty (20) questions. No depositions except for witnesses who cannot or will not appear voluntarily. The agreement should spell out the hearing dates and the date after closing papers are submitted when a decision is to be rendered. At the option of any party, direct examination can be presented by affidavit with the right of the opponent to require the witness to be produced for cross-examination. If the parties want the rules of evidence to apply, the agreement should say so.
Editor: What characteristics of an ADR venue should corporate counsel consider to optimize results?Dreier : The venue for the ADR proceeding should provide for privacy, break-out rooms for individual conferences, audio and video conferencing capabilities, food service, and sufficient creature comforts. "Venue" can also include the supervising organization such as AAA, CPR, JAMS or the like, and such an organization should aid in the neutral selection, provide a buffer between the parties and neutral, aid in collection of fees, standardize the paperwork and if necessary, provide a physical locale for the proceedings.
Meanor: Choice of venue is not apt to have any advantage with respect to the outcome. Venue should be the place which makes it easier to obtain evidence. That may be in the home of either party, where the claim occurred, near the location of the most important witnesses and the like. If these factors balance out equally for each side, a good compromise might be to pick a location equidistant from the headquarters of the parties.
Published April 1, 2008.
