Dispute Resolution Processes
Professor Laura Kaster
1. Introduction:
a. Dispute Resolution Spectrum: (see week 1 chart) Items range from client having most control over outcome to least, and from most cooperative to most adversarial.
i. Direct Negotiation
ii. Facilitative Mediation
iii. Evaluative Mediation
iv. Neutral Evaluation
v. Settlement Conference
vi. Mini Trial
vii. Summary Jury Trial
viii. Advisory Arbitration
ix. Bracketed Arbitration
x. Final Offer Arbitration
xi. Traditional Arbitration
xii. Private Judging
xiii. Trial
b. Class 1 Overview
i. Mandatory Mediation is ordered in NJ and many other states prior to a case progressing to trial
ii. 98%+ of cases settle before or during trial. Less than 2% of cases end up submitting to court resolution.
iii. Transactional Attorney’s must know how to effectively draft Arbitration Clauses, and to anticipate a clients future resolution of disputes.
c. ADR Perspectives: Helpful to view a case from these perspectives in assessing positions.
i. Neutral
ii. Advocate
iii. Party
iv. Public Policy Perspective
d. Is the Phrase Alternative Dispute Resolution a misnomer?
i. Alternative
1. Alternative is wrong because it presumes that litigation is the norm. 98% of cases are not determined by litigation.
2. Alternative is correct in the sense that it is viewed as alternative to the standard litigation process. That is the system it is judged against.
ii. Dispute: Claim that has reached a ripeness to which a settlement privilege may apply
1. A Dispute involves at least 2 parties
2. A Dispute requires the assertion of a claim of right, and the rejection of that claim of right. The party asserting the claim must then pursuit resolution.
iii. Resolution: does not mean abandonment of the claim. Resolve may mean
1. Claimant is satisfied
2. All parties are satisfied
3. A just result
4. A fair process
e. Spectrum: ADR focuses on K. The process must be agreed to. It may also be looked at by determining who is deciding, who is participating, and who is the expert.
i. Negotiation, Mediation, Arbitration each require the parties to agree to participation.
ii. Arbitration: Only one of the three that may produce a binding result without a post dispute contract. The contract arises pre-submission.
1. Enforcement: Judgment lien, execution, garnishment, preclusion of subsequent court action
iii. Negotiation/Mediation result in an agreement that is not automatically enforced.
1. Negotiation Defined: Direct communications Between Parties and/or their representatives to arrive at a resolution or settlement of some issue. The resulting K or a settlement agreement may be legally binding or enforceable
2. Mediation Defined: Neutral facilitated negotiation.
2. Negotiation
a. Negotiation Defined: Direct communications Between Parties and/or their representatives to arrive at a resolution or settlement of some issue. The resulting K or a settlement agreement may be legally binding or enforceable
b. BATNA- Best Alternative To a Negotiated Agreement: An accurate estimate of the realistic outcome of your case together with factors in time value of money and the costs of obtaining the result.
i. Considers the bottom line or point at which you will walk away from the negotiation. It is the worst deal either party will accept without being forced to do so.
c. ZOPA- Zone Of Possible Agreement: is the range of agreements that can potentially satisfy both parties. ZOPA is the range to which both parties BATNA overlap, creating a zone in which both parties are willing to submit to an agreement.
d. Zero Sum (distributive bargaining): The only issue is money and any change in the settlement terms results in increased value for one party and decreased value for the other. Zero Sum negotiation diminishes the opportunity for a ZOPA to be found.
e. Positive Sum Negotiation: A Win/Win negotiation where various interests of the parties exist and are considered. So long as both parties may serve the needs of the other they can each win. The parties are likely to value different elements with varying degrees of importance.
i. Methods from Getting to Yes:
1. Separate people from the problem
2. Focus on interests not positions
3. Invent options for mutual gain
4. Insist on using objective criteria
f. Decision Analysis in Negotiation by Jeffrey Singer (wk 2 print)
i. Determining BATNA: In representing a client, it is necessary to determine with reasonable accuracy the probable outcome of not striking an agreement with the other party (whether the alternative is litigation, or negotiating with a different party). This requires calculating BATNA to determine the value of the negotiated deal. BATNA requires a calculation of the likelihood of success through alternative means
1. Statistical Likelihood of Success: Mul
from why you want it (interest).
c. Invent options for mutual gain: even where interests are different there are likely bargaining outcomes that may advance interests of both parties.
i. (two sisters have 1 orange and are debating who should get it. Once both explain their interests in the Orange the problem is solved because sister A wants to make juice, and sister B wants orange peel for baking.)
d. Insist on Objective Criteria: Where the value of something is up for dispute, find an objective tool to settle that issue. Use creative alternatives to supplement the value if it is lower to one party
e. Know BATNA and stick to it: The reason to negotiate is to produce better results than you can obtain without negotiating.
h. Initial Interactions and Offers:
i. Positioning: Opening position sets the stage for negotiation. It forms the expectations of each party, and forces each party to reassess the assumptions they may have brought to the table regarding the other side.
1. Maximalist Position: Asks for more than is expected to obtain.
a. Effectively hides real expectations
b. Provides a cover while you attempt to find information about the other side’s valuation/goal of negotiation.
c. Increases risk of deadlock
d. Raises tension between parties, may be sign of minimal good will and unreasonableness
2. Equitable Position: Ask for an outcome that is fair to both sides
a. Requires trust
b. Risk being taken advantage of
3. Integrative Position: Ask for an alternative solution in the hope of finding the most attractive combination (maximum win/win) for both parties.
a. Increases chance for agreement because of increased communication and effort required.
i. Concessions: Concessions are the public readjusting of one’s position. Concessions will move within a parties ZOPA, and may be necessary to fall within the zone of the other party. Concessions typically depend on (1) the opening position (2) the position of the other party.
