What is it?

It is where the parties to a dispute agree to submit their dispute to an appropriately qualified and skilled arbitrator, rather than the court, for adjudication and binding determination.

It is different to mediation.

With mediation, the parties retain the services of a trained mediator who sets up a protocol and process to assist them to resolve their own dispute. There are different models of mediation that the parties can choose for their dispute. They might only want a mediator to facilitate the management of their dispute by helping them communicate in better and more effective ways and to help them circumvent obstacles and road blocks to settlement; or they may want the mediator to do more – for example, to provide non binding evaluative opinions on certain issues that are within the professional expertise of the mediator (e.g. commercial law issues); or they may ask the mediator to be more directional, giving an indication to them of whether or not a certain option is sound or viable.  Some mediators choose only to work within the facilitative model as they believe that this is all that a mediator should do. Others take a more dynamic and versatile approach.

It is always for the parties themselves to decide what sort of ADR they want to apply to their dispute.

This is why ADR is so attractive compared to simply opting into litigation right from the start of a dispute. Once parties engage in litigation they are, to a large extent, abdicating their personal influence over the way the dispute is managed, to their lawyers and to the legal process.  In a democratic society, everyone has their inalienable legal rights to pursue legal remedies via the courts and tribunals. However, to pursue such legal rights via litigation in ignorance of possibly better and more effective ways and means to manage and resolve the commercial dispute is a great shame. I am sure that most litigants, if they were properly aware of and understood the distinct benefits of the alternative non-litigious options, and had a proper opportunity to weigh those benefits up against the litigation option, would choose the alternatives to litigation. Who would not want to spare themselves a great deal of distraction from their usual business and a great expenditure of money that they could put to better uses elsewhere?  It is just common sense. It is sound commercial sense.

The sad fact is that many business owners and commercial entities resort to litigation without being made properly aware of alternative viable ways that they could manage and end the dispute on sound commercial terms they could live with.They end up paying a price that they would, had they been given the chance, have preferred to avoid.

Commercial arbitration differs from court proceedings in the following respects -

• It is governed by its own legislation – The Commercial Arbitration Act 2010;
• This legislation allows parties to any contract or commercial agreement or joint venture to insert dispute resolution clauses in their agreements to govern the way that disputes will be managed and dealt with when they arise.
• The parties to any commercial venture can decide to insert dispute resolution machinery into their contracts that require the parties to first go to mediation, and then if mediation fails to resolve the dispute, to appoint an arbitrator or arbitrators to adjudicate and determine whatever issues could not be fully resolved via mediation. They can agree to make such arbitral determinations binding on them, so that there is no room for any party to institute court proceedings regarding such disputes.
• The parties can decide on a mechanism for a third party organization to appoint an arbitrator for them if they cannot agree on choice of arbitrator.
• The parties can rely on provisions in their agreement and in the Commercial Arbitration Act to limit the length of time and cost involved in the arbitration proceedings.
• The parties can agree on placing certain limits or restrictions on rights of appeal from any arbitration determination and can also agree on what information and material used in the arbitration will be protected by confidentiality.

The key point to make here is that commercial arbitration clauses in commercial agreements can, if properly drafted and constructed, give the parties a large amount of flexibility in how their disputes are managed and ultimately resolved.

The parties can even agree, if they wish, to allow their choice of mediator to become their arbitrator if the mediation process fails to totally dispose of the all aspects of the dispute. This is called “Med-Arb”. It is a hybrid model of ADR.  Not many elect to use this hybrid process, but it is available to be used if the parties so choose. It is specifically provided for in the Commercial Arbitration Act.

The potential advantage of using the hybrid process is that it allows the parties to keep up their momentum towards finality of the dispute without interruption.

Its use will depend very much on the parties relationship with the mediator/arbitrator and their confidence in the process.

The training, skills and experience required of the ADR professional to manage the hybrid process will of course be much more extensive and demanding than if they were only acting in one capacity or the other.

Christopher J Whitelaw

Barrister and Mediator

Commercial Disputes Management Center

612 94208213

cwhitelaw@chriswhitelaw.com.au

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“ADR” is of course Alternative Dispute Resolution.

Both are ADR. Both are aimed at managing and resolving disputes outside of the court/tribunal system and with the goal of making litigation the very last resort.

But what are the key differences?

The principal differences are these -

• The Mediator or Co-Mediators (if two mediators are working together) are retained by all the parties to the dispute with a brief to help the parties manage and resolve the dispute by use of a range of ADR models, methods and strategies. By contrast, in collaborative law ADR, each party will have retained his/her own lawyer who is trained in collaborative law practice. The collaborative lawyers then establish their own protocol to try and manage and resolve the dispute using collaborative law models, methods and strategies.
• The parties who retain a mediator or co-mediators may or may not have lawyers assisting them. It is not essential that they have independent legal representation. Whether or not a party chooses to have a lawyer involved in the dispute resolution process with a mediator is entirely for the party to decide.  If a mediator believes it would assist that party to have legal representation during the ADR process the mediator will communicate that to the party. With Collaborative law, the ADR process is being managed for the parties by their lawyers who are trained in collaborative law.
• With mediator facilitated ADR, the mediator will devise a blueprint or protocol to manage and resolve the dispute which may include a number of pre-mediation steps and actions to enhance prospects of success at mediation. This will be written up in the contract that all parties sign with the mediator. When they sign the contract with the mediator they agree to adopt that blueprint or protocol and abide by its terms and conditions. They agree to participate in the process in good faith. With Collaborative law ADR, the parties rely on their lawyers to draw up an agreement to deal with the dispute that will reflect and implement core collaborative law principles such as to act in good faith, not to take the matter to court or threaten court action during the negotiations, the withdrawal of those lawyers if ADR fails and the parties decide to go to court, to engage in principled and interest-based negotiation rather than positional rights and power based negotiation typical in litigation and so on.
• With Mediator ADR, if the ADR process is entered into pre-litigation and fails to achieve finality with the dispute, the parties are free to go to court if they wish. Often, and regrettably, many lawyers recommend to their clients that they commence litigation first and then make use of mediation services before they commit to a final hearing date being fixed by the court. This is called “mediation in the shadow of litigation”, and many lawyers prefer this style of mediation as they believe that without the threat of an imminent hearing and the costs of preparation for that hearing, and the uncertainty of the outcome at the hearing, their clients are not likely to settle their dispute. I personally totally disagree with this view and approach.  With Collaborative law, the ADR is always conducted before any litigation has been commenced and this is a key feature of collaborative law.

These are some of the key differences between Mediator facilitated and managed ADR and Collaborative law ADR.

I will go into some of the finer distinctions in a later post.

Christopher J Whitelaw

Barrister and Mediator

Commercial Disputes Management Chambers

02 94208213

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European Mediation training places a lot of emphasis on such ADR principles as -

• Mediation helps foster social harmony;
• Mediation is less abrasive than litigation to resolve disputes;
• Business is better off by utilizing ADR (alternative dispute resolution) in preference to litigation and binding arbitration methods;
• Mediation is easy to access at any time in the dispute and is comparatively inexpensive;
• ADR foster the spread of information to improve inter-party knowledge and awareness.

European Mediation Training is done over an very intensive 11 days in contract to 4- 5 days in Australia. The trainees are strongly grounded in both theory and practice. In Australia the trainee mediators are only required to do two simulated mediation sessions for assessment, each one lasting for about 1.5 hours; whilst in Europe they are required to to do a minimum of two with each session lasting 4-5 hours.

The European model does not favour the shuttle style facilitated negotiation mediation model now strongly in vogue in Australia with lawyer and ex-judge mediators. In fact the Europeans don’t believe that his style of mediation is really mediation. They tend to favour a more robust, dynamic and flexible use of mediation models that permit the mediator to employ a bigger repertoire of skills and strategies.  They regard the Australian model as quite limiting and confining.

The European approach openly recognizes that sitting under the surface of a dispute is usually a hierarchy of human emotions stemming from -

• Wants
• Needs
• Perceptions
• Assumptions
• Concerns
• Beliefs
• Values
• Fears

This leads each party to the dispute to hold certain strong convictions that drive their positions and attitudes in the dispute.

The shuttle style of mediation heavily used in Australia by Australian lawyer mediators, where they spend limited time in joint session (parties in same room and able to talk directly to each other) and maximum time in caucus (parties separated into their own private rooms) fails to recognize and address these underlying human factors and focus only on the tip of the iceberg – the more obvious symptoms of the dispute.  They focus mainly on the money and what each party is will to pay or accept in order to settle the dispute. They tend to avoid the human emotions and keep them out of sight.

The European model recognizes that unless the underlying human emotions that are driving the dispute are uncovered and addressed, there will never be any resolution of disputes that fosters social harmony and greater understanding and awareness. Shuttle style mediation that results in a deal being struck about the money to be paid invariably leave one or more parties feeling resentful, cheated and unhappy because they were never able to express their emotions or permitted to resolve their emotional needs as part of the process to resolve the dispute commercially.

The Australian model of mediation tends to give too little time and attention to the exploration phase and tends to heavily focus on the negotiation phase and bringing the parties to a negotiated outcome and final agreement.

The European model accepts that most of the time disputes are not “just about the money”; they are invariably being driven by deeper and more complex emotional issues. The job of the skilled mediator is to uncover what lies beneath the tip of the iceberg and help the parties “resolve” their dispute on both the emotional level and the financial level.

The European model favours keeping the parties in joint session as much as possible and also favours the use of co-mediators rather than a lone ranger mediator.

From my own personal experience working with commercial disputes over the last five years, I strongly favour the European model and apply that model to how I work with managing and resolving commercial disputes.

Christopher Whitelaw

Commercial Disputes Management Centre

Lane Cove | Sydney | NSW | Australia

612 942 8213

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Prepared by Christopher Whitelaw[i]

The objective of the new model is to open up a new commercial disputes pathway or roadmap for business that –

• Allows the parties to the dispute to remain in control of the dispute and its management from start to finality, rather than divesting that control to others, such as their lawyers;
• Allows the parties to the dispute to manage the dispute with the assistance of a neutral expert in commercial disputes management and resolution who may or may not be a lawyer but who must be an accredited and experienced practitioner in alternative dispute resolution (“ADR”) under the Australian National Standard;
• Allows any party to the dispute to access appropriate legal advice when needed or necessary to help achieve early resolution of the dispute;
• Is structured in a way that aims to reduce legal costs incurred during the entire dispute resolution process;
• Is structured in a way to promote and facilitate quick and equitable resolution of a commercial dispute;
• Keeps the focus on the issues and matters that are identified as “central”, or “core” or “primary” or “critical” by the parties themselves to promote the early and just resolution of the dispute on acceptable commercial terms, rather than on legal issues, strategies and tactics that tend to alienate, antagonise, threaten, intimidate and polarize the parties, thereby exacerbating the risk of eventual litigation;
• Seeks to contain the losses to each party coming from lost productive time, being diverted from core business activities and planning, legal expenses, damaged commercial relationships and so on.

The new model is all about maximising the use of Alternative Dispute Resolution (ADR) pre-litigation, so that the costs and harm associated with litigation can to a large extent be eliminated and avoided.

ADR is a mindset, a philosophy and a set of strategies and tools. Its highest potential and maximum benefits lie in its pre-litigation use to achieve early and comparatively low cost dispute management and resolution.  The parties, under expert assistance, have a unique opportunity to keep the focus on finding common interest and reasons to achieve quick resolution of the dispute and to salvage the relationship for mutual future benefit.

As soon as litigation is commenced the dynamic between the parties is changed because commencing litigation is a akin to a declaration of war with the lawyers then acting in the role of power brokers. It shifts the focus away from common interest, common cause and mutual benefit (i.e. “common sense commercial thinking”) to power based positional negotiation and tactical thinking and manoeuvres where the object is to use the law and evidence to demonstrate a superior position and “to win” so that the other “loses”. Litigation has a great tendency to wreak havoc all round, divert the protagonists attention, time and resources away from their core business and to destroy commercial relationships irrevocably.

This is a potential that is yet to be fully realised in most countries where ADR is now a well-accepted “tool” within the legal justice system. This is because over the last 10 years or so the legal “justice system” that is controlled by lawyers, judges and former judges now acting as mediators have succeeded in making the use of ADR an adjunct to the litigation model for dispute resolution. They have stripped the entire “ADR” skill set and tool box (set of strategies) down to just one thing – Mediation.

Further, they have created a mainstream model of mediation, used only within the litigation funnel (production line) that strips out of it almost all its transformative potential and converts it into something else – a hosted settlement conference where the parties, using their lawyers as their agents, simply barter for the price both parties are willing to settle their dispute for. They usually do this using what is now called the “shuttle ” style of mediation, where the parties have minimum face to face contact, hide behind their lawyers as their voice and spend most of their time during the so-called mediation ensconced in their separate rooms at the mediation facility with the mediator shuttling between the two enclaves trying, with the help of the lawyers, to broker a settlement.

Such hosted settlement conferences are usually scheduled just a few months out from the likely trial /final hearing date in order to put maximum pressure on “the clients” to settle their dispute or face the uncertainty of a judge or jury’s decision and the risk of being the declared loser. The loser not only loses any benefit of a favourable verdict or award after all the rigours and cost of the litigation, but is left to shoulder the burden of their own legal costs as well as the added burden of an adverse costs order from the court where they are ordered to pay the costs of the victorious party.

As soon as a dispute is drawn into litigation it becomes hijacked by the legal mindset and will become subject to the court based or tribunal based litigation model for resolving disputes via case management and adjudication. This model tends to polarise the parties and limit their thinking and perspectives on the dispute and how to resolve it to legal concepts that tend to focus on who has the stronger or weaker case based on legal principles and measuring sticks (legal issues, evidence and onus of proof etc.). The litigation model for dispute resolution is also very expensive.

If, on the other hand, the parties and their representatives were clued up on how to use early ADR right from the start (i.e. when a dispute first crystallizes) they might choose to adopt the following sequence of steps before even considering litigation –

1. Exchange their own Position papers regarding the dispute within an agreed timeframe and do this in an entirely non-confrontational and friendly way;
2. Respond as objectively and non-aggressively as possible to each other’s position statement within the agreed timetable; and with permission to express themselves frankly and without hiding emotions and feelings ignited by the dispute provided that an attempt is made to explain those emotions and feelings to help the other party understand them. This is what is called “transformative” ADR because it recognises that beneath most disputes resides a set of wants, needs, perceptions, beliefs, values, fears and convictions that unless properly recognised and allowed to surface and be expressed as part of the process, it will be hard, if not impossible, to resolve the dispute in a way that the parties will embrace and take full ownership of. Rather, if they do settle, they will settle for reasons and on terms that they resent, usually because they were not prepared to accept the uncertainty and risks of going to trial. Settlements achieved under pressure are very rarely transformative in quality and they hardly ever achieve any kind of rapprochement between the parties.
3. Each party then draws up a set of possible options for settlement and this is exchanged within the agreed timetable;
4. If this does not lead to resolution by an agreed date, the next step will be for the ADR specialist to draw up a blueprint to further manage the dispute and submit that to the parties for approval;
5. The ADR specialist works with the parties to help them manage and resolve the dispute as quickly and cost effectively as possible. The ADR specialist will design a process, methodology and strategies to suit the dispute and to suit the parties involved in the dispute.  This can end up being a versatile and dynamic mix of strategies and methods rather than trying to apply a single model of mediation to all disputes.
6. Broadly speaking, whatever ADR model or methodologies are used, they will tend to assist the parties move through three phases – the exploration phase, the negotiation phase and the reaching a concluded agreement phase.

It is suggested that for most business owners adopting the above 8 steps pre-litigation, and with the aim of avoiding litigation if at all possible, makes not just good common sense but good commercial sense. Unless one or other of the parties in dispute has a private agenda that favours using litigation, or there is some other good reason to litigate (e.g. to obtain an important legal precedent to clarify the law in some important way for future commerce and trade), it might even be said that adopting the above 8 steps as the first response to deal with a commercial dispute is a “no brainer”.  I mean – why wouldn’t you?  The main reason why this is not the preferred model for managing most commercial disputes is simply because most business owners are not aware of it and most lawyers tend to favour the litigation model.

If you would like to gain further insight into “early ADR” and its inherent benefits to business as opposed to the litigious mindset and litigation model for resolving disputes, please visit www.australiandisputeresolvers.com.au.  This is a blog set up exclusively to explore and explain the considerable benefits of ADR.

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“Tactics” is not the same as “Strategy”.

An expert in ADR (alternative dispute resolution) will be mainly focused on developing an appropriate strategy for the dispute. The chief elements of the strategy will usually be -

• Contain the dispute and stop its further escalation;
• Create better forms of communication between the parties to the dispute;
• Isolate the core issues in the dispute;
• Understand the different perspectives concerning the origin of the dispute and the main issues;
• Find out what each party really wants to be able to exist the dispute;
• Seek out any common ground and mutual reasons to end the dispute;
• Develop a process for managing and resolving the dispute that each party is willing to commit to as a better alternative to taking the dispute to court;
• Manage that process skilfully to keep the parties engaged and committed to reaching an out of court resolution or settlement of their dispute;
• Safeguard and restore important pre-existing relationships wherever possible.

“Tactics” are usually employed before the parties choose to embrace ADR, when they or their lawyers are still aligned with the adversarial approach to the dispute. Different tactics are employed to gain the upper hand and score points or gain an advantage over your “opponent”.  They can variously involve -

• intimidation and stand over tactics;
• bending the truth tactics;
• up the ante tactics to scare your opponent;
• faked rejection of offers, with intent to walk away and file proceedings tactics;
• pretend outrage/outbursts tactics

and so on. This is all part of what is called “positional negotiations” (that aim to make one party look stronger and the other weaker) rather than “interest based” methods of negotiations.

ADR practitioners tend to align with principled and interest based negotiation and try to steer the parties away from the adversarial style and tactics. The chief aim of the ADR specialist is to improve the conversation and communication between the parties in principled and ethical ways to influence an outcome that the parties will prefer to resorting to the courts and the adversarial process. It is not about who wins or loses, but about joint problem solving to come up with a solution that both sides can say “I can live with this”, and I would rather this than take my chances with an all out fight with the final decision left up to a third party (judge or tribunal).

Those who try to use tactics after agreeing to opt in to or participate in an ADR  have either fundamentally misunderstood what ADR is about or have some other agenda. Whatever the case, the use of adversarial type tactics has the potential to derail the ADR effort.

Christopher Whitelaw

Barrister and Mediator

Commercial Disputes Management Centre, Lane Cove, Sydney

02 9420 8213 viagra

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I sit on the “Access to Justice” committee of the Law Council of Australia. This committee meets about once every 3 months.

The last meeting of the A2J committee was just last week. At that meeting I spoke about a new model for ADR (alternative dispute resolution) that I believed had the potential to make a very large contribution to access to justice around the country.

The members of the committee are barristers and solicitors representing all the States and Territories.

The traditional focus of the committee is on gaps in legal aid funding and services by Federal and State governments. The committee has been the instigator of some very serious research by Price Waterhouse Coopers (PWC) that shows beyond all doubt that commonwealth funding of legal aid services has lagged so far behind since the Howard government implemented the “Commonwealth/State Divide” in the funding of national legal aid that it will cost over $1 billion now to ever catch up. The political reality is that this will not happen any time soon.

I pointed out to the committee that there was very little focus on ADR, and even less focus on “early adr” when discussing “access to justice” in the context of the federal funding of legal aid services. The predominant focus has always been on the the ability to access justice via litigation in the various courts and tribunals. This is how it is usually measured.  When “gaps” are identified, they are “gaps” in lower income persons’ ability to seek legal redress for alleged or perceived civil wrongs via the courts and tribunals of the land.  When they speak of ADR, they speak of it only in its current role and place WITHIN the litigation system.  ADR is now fairly well entrenched and embedded WITHIN the litigation system. But here is the point – you have to commence litigation in order to access ADR WITHIN the litigation funnel.

In my view, and based now very much on my own empirical evidence from the work I do with EARLY ADR OUTSIDE OF THE LITIGATION FUNNEL, this sort of “ADR” (which is way more than just mediation before trial WITHIN the litigation funnel) has huge untapped potential to increase access to justice and to reduce the ever increasing burden of the litigation justice system on the taxpayer and on the limited resources of the courts and tribunals.

After I outlined my views to the A2J Committee one of the lawyers there said “But isn’t that just collaborative law”?

No, it isn’t. Not at all. Collaborative law is an entirely different system, but both Collaborative law and Early ADR do have one major thing in common – they both provide a mechanism for parties to resolve their disputes early and less expensively OUTSIDE OF THE LITIGATION SYSTEM.  To this extent, early ADR and collaborative law are processes with specific sets of strategies that have huge potential to provide access to justice and to reduce the burden on the taxpayer and court system.

I will explore this in more depth in my next post.

Until then – take care and sign up the RSS feed (email notification) on this blog so you will know straight away when the next post appears.

Christopher Whitelaw

Barrister and Mediator

Commercial Disputes Management Centre, Sydney.

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His theme was all about innovation in the use of Alternative Dispute Resolution (ADR) in the commercial context. It all starts with cultivating a different mindset from the start of any commercial relationship – a mindset that is attuned to ADR and ADR techniques that can be applied before a dispute occurs.

Most lawyers who become engaged in ADR are engaged after a dispute has already come into existence, and lawyers who are not well versed in “early ADR”, and not skilled in the art of “dispute management” (where the focus is on how to deescalate a dispute, quarantine it, and then open up productive communications to resolve it without resort to litigation) tend to (deliberately or unwittingly) fan the fires of the disputes by adopting a positional and confrontational stance on behalf of each party to the dispute that heads it into litigation and then only after it is entrenched in the litigation system do they start to talk to their clients about the need to consider the possible benefits of mediation before they fully commit to going to trial.  Regrettably this has become the predominant approach of most commercial litigation lawyers. Early ADR hardly gets a look in, let alone what Philip Argy talked about – how to make use of ADR techniques early on in a commercial relationship so that the chance of any dispute occurring during the course of the relationship is vastly minimized.

So what wisdom did Phil Argy impart to us? That is what this post is about. I want to expose as many business people and commercial managers to this way of thinking as I can.  Adopting a new mindset could end up saving them not just a huge amount of legal fees, but also a huge amount of productive business hours that might otherwise be squandered by being led down the path of litigation – all because of lack of awareness of a better alternative.

Greater awareness and a new mindset will open the door applying option generating skills in aid of dispute avoidance rather than waiting till a dispute exists and applying them only in aid of dispute resolution.

Philip conducted a survey with practitioners who have been involved with IT disputes.

Here is an interesting statistic – over 46% of IT Contracts eventually fall into dispute.

Philip Argy is an ADR specialist in IT disputes. The survey identified two main causes – (1) Failure to conform with the specific requirements of the contract and (2) failure to agree on what the contract recipe meant.

Most of these disputes fell into the $50,000 to $500,000 range.

Here is a breakdown on how they were resolved -

• 17% were litigated and went to a hearing;
• 14% were litigated and resolved at mediation before trial;
• 13% went to commercial arbitration and were resolved there;
• 5% were resolved by some form of conciliation;
• 8% were resolved via neutral expert determination.

Most of those resolved without going to a court hearing were disputes under $50,000. Most of those that went to a court hearing were over $500,000.

For the disputes that were resolved via ADR there was a 75% satisfaction rate.

Participants identified the following key factors that supported their satisfaction rating -

• Fairness
• Efficiency
• Cost
• Speed

The survey uncovered the following facts concerning corporations that fell into dispute -

• 50% of them had no formal dispute avoidance procedures in place;
• There was widespread lack of understanding of ADR processes and strategies
• Most of them were caught up in the legal mindset and had low awareness of the “ADR” mindset.

How can ADR be applied so as to help avoid disputes occuring?

• Apply ADR in the pre-engagement stage of the relationship;
• Apply ADR during the contract formation stage;
• Apply ADR during the contract administration phase;
• Install ADR stairways to quick and efficient resolution should a dispute occur.

ADR applied in the pre-engagement stage is about teaching the client how to more carefully evaluate a project to minimize the risk of dispute occurrence.

The ADR expert will work with the client to identify and manage the risks of the business case not being delivered in accordance with the contract schedule of deliverables. It is often the case that certain terms of the contract cannot be strictly complied with because the schedule of deliverables do not properly align with terms of the contract. This paves the way for an eventual dispute to arise.  The early engagement of an ADR expert will ensure that contract parties are educated about the risks and how to eliminate many of them pre-signing of the contract. Sometimes the people who will approve and sign the contract are not the same people who worked up the original business case for the project. Engaging an ADR expert early will ensure that those who will sign the contract are re-familiarized with the original business case and their attention drawn to terms of the contract that are clearly not congruent with that business case and hence containing the seed of future dispute.

The skill of the ADR expert is to raise all the “What ifs” before the contract is signed. By identifying the risks up front it is possible to elicit the party’s expectations of what they want to achieve and see if those expectations are compatible with the terms of the contract.

According to Philip Argy dispute avoidance is not well understood or implemented by commercial organizations or by their lawyers. It is a gap waiting to be filled by competent ADR specialists.  The ADR specialist is needed to play the role of devils advocate as clients who are entering into a new project for mutual benefit tend to get too cozy and comfortable with their contract partners. The ADR specialist needs to reality test their expectations re outcomes in the project with what is actually in the contract.

The role of the ADR specialist is to identify and intercept the issues that are “accidents waiting to happen” and bring the necessary focus to them before the contract is executed.

Philip Argy’s survey confirms that the commercial world wants and needs this service, but very few of them are gaining access to it.

If a dispute does break out, the job of the ADR specialist is to contain it, minimize the costs flowing from it and to maximize the strengths of the relationships in the venture to help keep the chief focus on the business case and its chief outcomes that brought the parties together in the first place. He or she works to re-invigorate the participants with their original rationale for engaging with each other.

I hope you enjoyed this post.

Christopher Whitelaw

Commercial Disputes Management Centre

02 9420 8213

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Edward de Bono is one of the world’s most celebrated exponents and teachers of lateral thinking. So, to get my point across here, I am going to draw on his writings to help me expound some key principles.

Here they are -

• “Usual Thinking” is based on analysis and judgment. However, when trying to resolve conflicts we often need to design a way forward rather than judge a way forward influenced by our personal beliefs and conditioning.

• Conflicts are often best resolved using creative thinking strategies and techniques. This means shedding our perceptions and conceptions and cultivating an open mind to seek fresh possibilities.

• Potential barriers to this will usually come from egos, emotions and adversarial and competitive behaviour.

• A skilled dispute resolver will try to find ways to get the players to contribute to an idea or proposal on the table using collaborative and parallel thinking.

• Complexity needs to be replaced by simplicity and effectiveness in the thinking processes applied.

• Seeking solutions is a collective exercise, and strategies like de Bono’s ’6 Hats’ provides a structure for arriving at decisions by harnessing the focused thinking of the participants.

• The skill of the dispute resolver is to get people working co-operatively, thinking in parallel on an idea or proposal – not in opposition or in a confrontational way.

• Lateral Thinking tools and techniques are designed to find alternative solutions and options for settlement that bypasses the more obvious choices and approaches to the presenting problems and issues.

• New angles will start to emerge that may at first seem illogical, but if the participants follow through with their thinking process, an “aha” moment may be just around the corner.

• Lateral thinking strategies are used to help break people out of their heavily conditioned responses that limit the options and possibilities for settlement.

• The dispute resolver needs to create an environment that will foster better ways for the participants to interact, in order to encourage their interaction.

• They move the players away from being polarized and stuck in their positions to being willing and eager to share knowledge and ideas with a common goal to find solutions that will work for both of them.

• The dispute resolver needs to be astute and alert to the need to redress gaps in the participants own knowledge and expertise by making use of neutral experts to fill those gaps.

• There is a need to unfreeze the brain from being too logical and stuck in linear conditioned and conventional ways of thinking. This is done by using techniques that will allow the participants to view the issue from new angles and perspectives.

Regrettably for those in dispute who trot off to their nearest lawyer, most lawyers are not skilled in creative and lateral thinking.

Taking the time to find an expert in alternative dispute resolution who is skilled in the art of creative and lateral thinking, at the inception of the dispute, could well save the disputants much valuable time, stress, and heaps of money.

Lawyers have a useful role to play, but quite often their early involvement in the life of a dispute does more to exacerbate it and ripen it for litigation than to foster its quick, just and relatively inexpensive resolution.

Until my next post,

Wishing you a Merry Christmas and a Happy New Year in 2012.

Christopher Whitelaw

Barrister and Mediator

Commercial Disputes Management Centre

www.chriswhitelaw.com.au

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“Mediation has impacted on the nature of practice at the Bar. More time is now spent in chambers advising how best to settle the dispute than how best to fight it in Court. Advocates have had to adjust to the change in the way the system operates so that the they now advocate strategies for settlement behind closed doors rather than utilising the forensic skills and persuasive advocacy in open court. Although the burden on the advocate in mediation is different from the burden on an advocate in a hearing before the Court, the advocate’s experience, knowledge and forensic judgments are integral to the client achieving the best outcome from mediation.

The issue of the “ripe” time to refer a matter to mediationis vexed. Some matters have a better chance of a mediated settlement if referred later in the litigious process whilst others may settle earlier in the process. It will depend very much  on the particular dispute.

However, I stress that the Court depends on the legal representatives to analyse not only the legal issues in the dispute but when it comes time to picking the time for referring the matter to mediation, to also analyse the financial, motivational or emotional issues that are driving their clients. These matters, about which the Court will know little or nothing, may be pivotal to the prospect of reaching a mediated settlement.”

I would like to offer some commentary about this extract from her Honour’s opening remarks at the ADR Workshop -

Firstly, her Honour’s remarks are hugely important for the following reasons -

• She, as one of the most senior judges of the court,  identifies a critical trend – the movement away from heavy reliance on adjudicative justice from the courts towards mediated settlements.

• Secondly, the statement is significant in that there can be no doubt that the Supreme Court supports and encourages this trend

• Thirdly, it points to the importance of “timing” and the need to go beyond the legal issues and legal analysis and to make room for other types of relevant information and analysis – the financial, motivational and emotional issues that are driving the clients. These matters need to be brought out into the open and properly looked at rather than being kept behind the scenes and out of sight.

Over the last 5 years or so we have seen a very unfortunate development – a style of mediation that lawyers have embraced as the predominant model that is a direct product of the legal mindset rather than the mindset of a true practitioner of alternative dispute resolution. I call it the “hosted settlement conference” model of mediation, a model that literally throws most of the arsenal of ADR tools out the window and relegates the mediator to being no more than an official host of lawyers from both sides of the dispute conducting a settlement conference with their clients present a few months out from the trial.This model fits very snugly into a lawyer’s overall litigious approach to resolving disputes. This model continues to foster litigation as the predominant mechanism for resolving disputes but makes it almost mandatory now for lawyers to persuade their clients to “go to mediation” before the court case manager fixes a date for trial. It is no more than a pit stop just prior to trial that is now “part of the justice system”. Lawyers get to pick up their litigation  fees all the way to the pit stop, and they have a clear financial incentive to fix the pit stop later, rather than earlier, in the litigious process. If mediation is successful the billing cycle for that matter comes to an end.

I mention this before drawing attention to some other aspects arising from her Honour’s remarks which in my view will operate to strengthen the legal grip that currently exists on “ADR” (alternative dispute resolution) that will ensure that “ADR” continues to be dumbed down to just one thing – “Mediation” – and that mediation will continue to predominantly occur later in the litigious process rather than earlier or even before commencement of litigation.

Here are my further comments and points -

• My own direct experience and my conversations with other legal and ADR practitioners convinces me that whatever discussions and conversations are going on “behind closed doors” between lawyers and their clients (as suggested by her Honour) the majority of solicitors still favour commencement of litigation as the first step and then building up the case as a show of strength before they open the door to mediation and a mediated settlement.
• Most lawyers are not highly skilled at conducting early negotiations and entering into early conversation with the opposing lawyer to establish an early framework and opportunity for the use of ADR strategies and methods to resolve the dispute BEFORE the parties are asked to commit to often very expensive process of building up their cases via affidavits and documents and expert reports in order to demonstrate superior fire power if the matter goes to trial.
• Most lawyers do not really know how to make effective use of the ADR approach early on in the dispute.
• Most lawyers have little training on how to implement and set up strategies and approaches PRE-MEDIATION that will foster early ADR and early settlement often without any need to “go to mediation”.

Bottom line, in my opinion, is that most lawyers DNA, training and mindset works against the probability of early ADR and early resolution of the dispute.

When her Honour states that the issue of when the time is “ripe” to refer a matter to mediaton is a “vexed” one, she regrettably is falling victim to her own legal DNA and is failing to recognise and allow for what those freed from the mental bondage of legal DNA know to be true in almost 99% of disputes – the keys to success and early resolution usually lie outside the bounds and boundaries of what absorbs the minds and focus of lawyers – i.e. the legal issues, the law, the evidence and the forensics of proof and probabilities.  They reside in the minds, principles, values, attitudes and emotions of their clients and very often, when properly identified and understood have nothing at all to do with the law, legal issues, evidence and onus of proof.  But what I am referring to here is often like a foreign language to lawyers and they simply don’t get it. Therefore they bypass it and continue to try and force square pegs into round holes (the round holes being legal fictions that they understand but which is like a foreign language to their clients).

That being so, for myself I lack optimism that the majority of the legal profession will be able to pick up the gauntlet thrown down by her Honour – “to also analyse the financial, motivational or emotional issues that are driving their clients.”

I will be very pleased if I am proved wrong on this.

My current view is based on empirical evidence from the last 10 years or so.

As always, the readers views about this are most welcome on this blog and are guaranteed publication.

All The Best,

Christopher J Whitelaw

Barrister and Mediator

Commercial Disputes Resolution Centre

Lane Cove – 02 9420 8213

Thirdly,

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Title: Access to justice costing us more
Author: JULIAN SWALLOW
Source: The Advertiser
Circulation: 176517
Page: 17
Date: 19-Jul-11
INDIVIDUALS and companies must pay up to an additional $1200 to launch legal proceedings under a new state
government measure opponents claim will affect the public’s ability to access justice.
The increase, a State Budget measure introduced on July 1, means companies with more than 20 employees
now pay $3000 to issue a summons through the Supreme Court, while individuals pay $2126 – up from a flat fee
of $1797 last financial year.
It makes South Australia the most expensive state in the country in which to issue a summons, and compares to
$2142 for a company in NSW, $1529.20 in Western Australia, $1050 in Queensland, and a flat fee of $767.40
for both companies and individuals in Victoria.
Australian Lawyers Alliance state president Tony Kerin yesterday expressed concern the fee hikes could affect
people’s ability to access justice.
“The higher the fees, the greater the hurdle that South Australian plaintiffs have to jump through to obtain
justice,” he said.
Law Society President Ralph Bonig said it was the first time the filing fee had been split between individuals and
companies, and was part of a pattern of government-mandated legal fee increases aimed at raising revenue
rather than upgrading court infrastructure.
A spokesman for Acting Attorney-General Patrick Conlon yesterday said the hike was part of steps to ensure a
strong Budget position.

If this new law is passed, just the cost to file a claim in court will be close to $3,000.

Disputes that are channeled early to an alternative dispute resolution specialist can often be totally resolved and disposed of for under $5000.

Based on this stark comparison, shouldn’t everyone be focused on how to maximize the use of ADR in the justice system?

Christopher Whitelaw

Barrister and Mediator

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