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Alternative Dispute Resolution
Villanova University School of Law
Gafni, Abraham J.

I. Chapter 1, DISPUTING PROCEDURES. This course will cover arbitration, negotiation, and mediation. All other processes really take place within the context of mediation. The growth area is mediation. Arbitration has become more involved and is beginning to look more and more like a trial.
A. Primary or most significant of the dispute resolution processes. Table 1.1 is the A list and Table 1.2 is the B list. Table 1.1 contains the following
1. Adjudication – misnomer because most cases are settled outside the court. This is the biggest in terms of time and resources required
a) Involuntary – if you are sued you must answer or face the possibility of the default
b) Binding subject to an appeal
c) Imposed third party neutral decision maker
d) Formalized and highly structured by predetermined rigid rules
e) Opportunity to present proofs and arguments (nature of proceeding)
f) Outcome is based on principled decision supported by reasoned opinion
g) Public proceedings
2. Arbitration
a) Voluntary but may be subject to an agreement that may be voluntary
b) Arbitration is binding (more binding than adjudication). The grounds for getting an arbitration ruling reversed were slim. Historically, you had to prove the arbitration proceeding was corrupt to get it overturned (it would not be overturned even if the wrong rules of law were used). Credit cards and employment contracts commonly have exclusive arbitration clauses. Courts are validating such contracts with caveats as long as the disputants have more or less the same rights they would have had in adjudication and courts will allow review of arbitration decisions if there is manifest disregard for the law so arbitration
c) Has the third party facilitator who has the ability to cram down a decision on the parties
d) Less formal than adjudication, you don’t change the rules you just modify them (i.e., instead of unlimited discovery you are only allowed 5 witnesses thereby making it more efficient since you will find out 99% of what you need with 5 witnesses)
e) Opportunity to present proofs and arguments
f) Can have an outcome not based on precedent and it is not grounds to have the decision overturned
g) Private proceedings but may have a written decision but it is private (this may be changing in mandatory arbitration clauses)
3. Mediation
a) Voluntary
b) If there is an agreement it is enforceable as a contract which is the beauty
c) Has a third party facilitator
d) Very informal
e) Unbounded presentation of the evidence
f) The outcome is what the parties agree to and it is not that the get exactly what they want, it is more that they don’t get what they REALLY DON’T WANT
g) Private
4. Negotiation
a) Voluntary
b) If agreement, enforceable as a contract but not binding relative to an outcome
c) Negotiation has no 3rd party facilitator
d) Very informal
e) Unbounded presentation of the evidence
f) The outcome is what the parties agree to and it is not that the get exactly what they want, it is more that they don’t get what they REALLY DON’T WANT
g) Private (privacy may be beneficial but it means that jurisprudence in this area grows slowly because everything is private)
B. What is it an alternative to? Courts and adjudication. The processes may overlap in that there may have been negotiation prior to filing of a lawsuit and the mere filing of a lawsuit may not stop the negotiation process and there may be attempts to mediate prior and after filing the lawsuit. Also mediation requires a great deal of negotiation.
C. The modern movement can be traced to Roscoe Pound who had a PHd in botany and he became dean of the Harvard Law School and Justice Berger convened the Pound Conference because of perceived dissatisfaction with the court system due to problems of delay, high cost, technicality and unsatisfactory outcomes so t he process as well as the result was all too often unsatisfactory so alternatives were sought. The Chief Justice sought an economic compromise because we have a publicly supported judiciary and there is incentive to keep these costs low but the appeal for alternative was not just for economic concerns and considerations but also the quality of the process such that if a satisfactory result is reached the participant may still be dissatisfied. The formality of the court process prevents the use of alternative. The judge cannot ask the parties what they really want or interject his view or opinions on the parties. The court system as we know it may be problematic in a number of respects but on the other hand our court system is a great leveler which should not be minimized in that pauper to king can partake and have and independent adjudicator. However, one size does not fit all.
D. Adjudication is our ultimate referent because it is always in the wings
E. Fault is more the focus of adjudication and arbitration and the focus of mediation and negotiation is a solution and how can we work together in the future and is not concerned with who was right or wrong
F. Table 1.2 processes (the B list)
1. Private judging is a lot like arbitration
2. Neutral Expert Fact-Finding is not a stand alone process and usually affect or is used in some other process
3. Mini-trial is a trial with such limitations as the parties agree to and if it is non-binding it may just to be to inform or influence settlement because it may be representative of a jury trial outcome or it can be binding
4. Ombudsman can do findings and make recommendations, for examples a nursing home having complaints against it and the solution may be to appoint a doctor to investigate and make recommendation
5. Summary Jury Trial similar to a mini-trial typically will have a jury whereas a mini-trial may not have a jury
G. The goals for ADR are on page 8
1. To lower court caseloads and expenses
2. To reduce the parties’ expenses and time
3. To provide speedy settlement of those disputes that were disruptive of the community or the lives of the parties’ families
4. To improve public satisfaction with the justice system
5. To encourage resolutions that were suited to the parties’ nees
6. To increase voluntary compliance with resolutions
7. To restore the influence of neighborhood and community values and the cohesiveness of communities
8. To provide accessible forums to people with disputes, and
9. To teach the public to try to more effective processes
H. The process and the outcomes that are an alternative to adjudication and arbitration. There may be appropriate occasions where compromises is not in the best interest and in fact we need fundamental change rather than compromise that the ADR movement provides. Adjudication that gives yes/no answers that does not allows things like discrimination may be better. ADR may make society worse off is the concern.
I. HYPO – representing a business concern may decide they will lose and lose big in an adjudication and the loss will attract attention. What one wants and where one stands depends upon where one sits. Coke adjudicates every rat in Coke case and bus wreck adjudicates where there were only 26 people on the bus and yet 77 people sue as passengers.
J. If you have a weak case you want ADR because you can’t afford adjudication and you can’t find a lawyer to represent you. If plaintiff has a strong case he will go to the best lawyer.
II. Chapter 2, Negotiation. The main problem is the other side knows what you want. If you want to negotiate on your turf you will have to give up something so you will usually negotiate on neutral turf. Always remember to keep the economics and costs involved. Sometime you will not have negotiation and you will go straight to mediation. Mediation is cheap, no one in Texas charges over $500 per hour but may require a minimum of 4 or 8 hours. Typically, in a non-extraordinary matter it will be concluded in one day. If you have a young mediator it will be a long day because he has a mortgage payment whereas an older mediator has paid everything off and wants to get home and have a drink and watch the news. ADR follows the money just like other areas of law.
A. Preparatory Tactics
1. Where the negotiation will take place, try to make it be somewhere you are comfortable
2. Know who is showing up, the participants
3. Timing is one of the most important factors. Classic example is the landlord who is involved in a dispute such that he cannot collect rents – you should just wait him out
a) May be a violation/unethical to use ADR to extend or buy time. Will do ADR if you want sue me and then I won’t do ADR in good faith
b) Nothing unethical in not participating in ADR if time is on your side
4. Know the facts (most important), try to know as much as possible about the facts that are important to the other side.
5. Establish preconditions – any guarantees you an get are good
6. Locking yourself in – Professor says not to do this, it is too risky
B. HYPO – there are a dozen oranges and the parties dispute the ownership of the oranges. One party to the dispute wants to make orange juice and the other party wants to make a cake. Give the juice to the one who wants to make juice and the rinds to the one who wants to make the case. Mediation can do this whereas adjudication will be just concerned with who owns all 12 oranges. It allows for real inquiry into what the needs or interests of the parties really are, this is an important aspect of mediation
C. Negotiation has become a type of career and it will only grow, people will retain professional negotiators.
D. Preparation for negotiation must be thorough as for litigation
E. Both parties cannot make the first offer but what is important is knowing how to respond or retort, the counteroffer. An offer of $5M and a counteroffer of $25K. The important thing is to have you offer out there and being considered. You want your offer to be just short of ridiculousness and still have the other party consider the offer and stay in the negotiations. You don’t want to leave money on the table but you do want a settlement.
F. Must define the beginning of the negotiations and you don’t want the item that is most important to you to be discussed first or last but it should be up front. Try to get agreement on the easy or unimportant stuff t

whether there will be a trial and they view it as free discovery. The facts will come out at trial but not the goals and objective. Sharing information may be more a matter of timing than content. Since there are no procedures governing negotiation you have to be better prepared in negotiation than for trial. Settling via ADR is almost always more cost effective than litigation. You can combine doing discovery charged by the hour while conducting negotiations. Your success in settling the matter alternatively will be better than going to trial
M. Preparing for negotiations. Know your adversaries (do some background information) and know their alternative. For logistics choose whatever is convenient, if there are a number of negotiation sessions you can alternate between locations. Role-playing may be done for free if the lawyer is inexperienced and not done if experienced (or if so will be charged to the client). Need to know your walk away price as well as your aspiration price. Open gambits – go in high but not so high that the other side walks away unless you are really not interested in a negotiated settlement. The other party should not let the first offer lay, MAKE A COUNTER OFFER. Don’t say I can’t take that, say I don’t want to take that or that offer won’t get me to where I want to be so the other side won’t question your integrity.
N. The negotiation dance, your movements should be in terms of gradations. If you go down $1M as the first step then you don’t go down $2M as your next step. It also involves reassessing perceptions and this is where listening and body language becomes important.
O. Increasing the pie or broadening the domain – always look for those opportunities.
P. Question 2.1 on page 37 deals with the dichotomy of distributive bargaining (dividing up a finite pie) and integrative bargaining where the emphasis is not based upon dividing a finite pie. Selecting a July wedding date via a distributive solution that should have involved an integrative approach. There are two problems, they get a wedding date that is not preferable to either one. A better approach may be to give in on the wedding date in exchange for choosing the honeymoon locale. The second problem is they are not being forthright with each other.
Q. Problem 2.2 on page 38 saying this is the minimum and not going to take part in the negotiation dance. The lawyer is supposed to represent the client zealously so if the lawyer can get more than the minimum he should try to do so (try to get the aspirations), not doing the dance may not be adequate advocacy for the client, and it may not give the other side a feeling that they are a party to the settlement. It would violate the Federal Employment Labor Act in that the employee must take part in the settlement and take it or leave it does not allow this. The negotiation dance is important.
R. “Getting to Yes” by Fisher and Uri is the Bible of negotiation.
S. Interests are oranges (I want them for rind and you want them for juice) and position is the oranges are mine. Focus on interests not positions, See objective criteria more in mediation. Invent options for mutual gains. Insist on using objective criteria. Know your alternative to a negotiated settlement (BATNA)
T. Uris’s getting past NO
1. Don’t use stonewalling (may work sometimes), attacks, and tricks and if the other side is using it you need to ignore it (take a break from negotiating). Don’t resort to the same behavior that the other party is using. Called principled negotiation.
2. Why don’t people want to cooperate (knowing this doesn’t help you much)
a) They are afraid
b) They don’t know better
c) The don’t see what’s in it for them
3. The method to use
a) Don’t react/ignore – called going to the balcony – deals with your own reaction
b) Acknowledging the other party – Defuses his fears
c) Re-framing changes the game to problem-solving negotiations
d) Building him a golden bridge entices him with the benefits of agreement This deals with an approach or an attitude.
e) Using power to bring him to his senses impresses him it is not worth trying to exploit you