This is Part 6 to my 8 Part Series on ADR and Access to Justice.
In my last post (Part 5) I addressed Questions (a), (b) and (c) below.
a. How long does this take?
b. What does the “ADR protocol” for tackling the dispute include?
c. What is in the ADR toolbox that makes a successful outcome a high probability?
In Part 6 I will address the following question –
WHAT DOES IT ALL COST?
The best way to answer this is to put up two entirely different systems, side by side, and compare them.
The first system is the conventional system. The conventional system is the one that is most prevalent out there in the market and the one that most people engaged in a dispute seeking dispute resolution assistance will encounter.
The second system is the alternative and fairer system, which is the one I adopt and recommend as the preferred system. Why the preferred system? Because I have no doubt at all that my system is far more equitable and reflects what most potential clients want.
This begs another question – If my system is more equitable and is what the client really wants, then why isn’t it the conventional and prevalent system?
The answer can be broken into a number of parts –
1. Lawyers dominate a huge section of the “market” for these services. They dominate it because a great number of them have become qualified as mediators (and they tend to refer to themselves as “mediator”, rather than an expert is alternative dispute resolution strategies and methodologies) and they market themselves as mediators in a way that nicely dovetails with the mainstream litigation model for dealing with disputes. They tend not to market ADR services in a way that totally distances and differentiates those services from mainstream litigation. They market “mediation” services in tandem with “litigation” services. This is because most lawyers take the view that you first need to litigate with the opponent to demonstrate your client’s superior strength BEFORE going to mediation, so that they can try to leverage that demonstration of superior strength to bargain for a better negotiated outcome at mediation. People who represent themselves as ADR specialists in the market don’t usually adopt that approach, as they know from experience that many disputes can be effectively resolved, and resolved more quickly and more cheaply, by NOT focusing on the law, legal issues and the strengths and weaknesses of each party’s evidence to support their legal causes of action. They know that in the majority of cases the parties can find their own good reasons, reasons that make good sense to them, to resolve their disputes without any need to file legal claims and defenses in court.
2. Lawyers are wedded to a time based method to charge for their services. Their preference is the charge by the hour or by the half day or full day of their involvement. Lawyer mediators apply this same method to the mediation process. However, there is one key point of difference. In the litigation process, the losing party is usually ordered to pay the costs of the winner. When parties elect to or are sent to mediation by court order, the parties share the cost of the mediation process in equal parts. Nevertheless, it is an unwelcome added cost burden if mediation fails to resolve the dispute and the parties have to return to the litigation process to achieve finality. In an average sort of case the total cost of the mediation process can easily be $5000 to $20,000 (or more), and so for those with tight budgets it is a painful pill to swallow to have to fork out $2,500 to $10,000 for no apparent gain or benefit.
3. Mediators engaged by lawyers acting the the parties in the dispute will require their fees to be paid irrespective of the outcome of the mediation.
4. Lawyers acting for parties to the dispute will require their fees to be paid irrespective of the outcome of a mediation.
This is the “conventional system”.
In the conventional system, mediation is simply seen as a pit-stop on the way to the final destination – the court hearing. If the dispute is resolved at mediation, then the parties avoid the court hearing; if it is not successful then they make final preparation for war and go to the hearing.
In the conventional system, lawyers and mediators make hay all the way along the continuum from the taking of initial instructions until final resolution of the dispute either via mediation or via a court hearing.
In the conventional system, the client pays for everything, win or lose, along the entire continuum of legal and mediation services.
The financial burden can be considerable, hugely stressful and, in some cases, totally devastating.
If, at any point, the client runs short of or out of money, the services are stopped, and if the client is not able to remedy the situation fast enough, the client is left abandoned and at the mercy of an opponent that has deeper pockets.
How is the alternative system fairer?
It adopts an entirely different approach to the conventional system.
Here are the mains elements of it –
– It first focuses on properly and fully understanding the nature and background of the dispute and those involved in it;
– It moves quickly to bringing the parties (and their lawyers if they have engaged lawyers) together in a collaborate setting to tone down the dispute and avoid its further escalation;
– It then seeks to identify the best approach and best strategies to apply to the dispute to permit quicker resolution and finality, without large expense, and with all effort made to preserve prior beneficial relationships rather than destroy them;
– It puts center stage the importance of each party making an open and genuine commitment to work together, with the assistance of the ADR specialist, and with the assistance of their lawyers (if they are legally represented) to identify possibilities and options for final resolution of the dispute that they can live with, that will endure and that will not close the door on the parties continuing to do business together in the future;
– It focuses on commercial realities and commercial interests and on the issues identified by each party as being important to them rather than on the law, legal causes of action and who has the stronger case to take to court.
In this environment, and in this set of circumstances, the alternative way is to align with the parties genuine commitment to find their own solution without resort to litigation and support it by declining to charge a fee for service unless and until a successful outcome is achieved.
In my experience of working this way, when you combine the elements of the parties own genuine commitment to the process with the skills and ability of a a highly trained ADR specialist, a good outcome is almost inevitable, and in the small number of cases where a good outcome is not achieved I am more than happy to sacrifice my fee to a good cause.
With this approach, everyone feels that they are being treated equally, and we either all win together, or we finish up knowing that we gave it our best shot but that some of the issues were irreconcilable and will need to be determined by an external umpire.
Any fear by an ADR practitioner or legal practitioner that to adopt this alternative model would lead to financial ruin for them should be dispelled as unfounded and misconceived.
The focus should rather be on creating the right set of circumstances to manage and resolve the dispute, the total genuine commitment of all the players to the process and on the skills of the ADR practitioner to facilitate and manage the process.
As usual, where the skilled practitioner is willing to accept the risk of “no win no fee” terms of engagement, where success is achieved the remuneration then payable by the parties to the practitioner should be considerably higher than the practitioner’s usual fee rates when charging in the normal manner.
An ADR practice constructed along these lines will survive and thrive even if there is the occasional dispute where successful resolution fails to eventuate.
In PART 7 I will address the interesting issue of how LATERAL THINKING is a key aspect of ADR methodology to resolve disputes and contrast this with the LINEAR approach that is all too common in the Litigation model.
Until then,
Christopher Whitelaw
Barrister and Mediator
The Dispute Management Centre
02 94208213
cwhitelaw@chriswhitelaw.com.au
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