Nearly three decades ago, the Harvard Business Review printed a profound and prescient article on the challenges of implementing alternative dispute resolution, or ADR.
Sadly, what was written back in 1994 – when there were more than 2,800 locations of Blockbuster Video and zero social media – remains largely true. This article could be run today with minimal revisions.
The promise of ADR, while not yet fulfilled, remains a worthwhile one. As we look ahead to the next three decades, it’s imperative to see what has gone wrong with implementing ADR, what has gone right – and where we can go from here.
What goes wrong
Todd B. Carver and Albert A. Vondra wrote back in 1994 that “the bad news is that ADR as currently practiced too often mutates into a private judicial system that looks and costs like the litigation it’s supposed to prevent. At many companies, ADR procedures now typically include a lot of excess baggage in the form of motions, briefs, discovery, depositions, judges, lawyers, court reporters, expert witnesses, publicity, and damage awards beyond reason (and beyond contractual limits).”
In other words, ADR has become just a different species of legal proceeding, without the expectation and excitement of an official government verdict at the end. Sterling Miller at Thomson Reuters wrote a piece this very year — 2022 — that suggests just how little has changed in perception of ADR since the Review article.
“Let’s face it, people are people and both sides are striving to find ‘neutrals’ who will best support their position,” MIller writes. “In many arbitrations, each party picks one arbitrator and the service picks the chair of the panel. You can bet that the arbitrators picked by the parties are pre-disposed to their respective party’s position.”
That’s close to becoming the adversarial system we’ve become used to in litigation. Miller also points to cost issues — while the ADR process can save money, it’s not a given — and the power imbalance implicit in a process in which some have enormous resources while others have few.
What goes right
Even in 1994, it was clear that ADR had a vital role to play if those entering into the process did so with good faith, patience and dedication.
“The good news is that a number of companies have learned to use ADR effectively, and those companies are in fact reaping ADR’s predicted benefits: lower costs, quicker dispute resolutions, and outcomes that preserve and sometimes even improve relationships,” Carver and Vondra wrote.
There’s an important word in that quote, one that anyone interested in alternative dispute resolution would be well-advised to note: learned. So many in the legal world have been through exhaustive schooling and may feel they don’t need or want to learn a different approach.
That would be a profound mistake.
The different approach of ADR, when genuinely pursued, can lead to breakthroughs. “Clients — including in-house counsel — can get wrapped up tight in their version of the case,” Miller writes for Thomson Reuters. “Sometimes, hearing from the other side and hearing the thoughts of a neutral third party can get both sides to focus on the realities of the dispute versus the dug-in positioning.”
Where we go from here
Alternative dispute resolution has a bright future, thanks to companies like Alterity that have emphasized a commitment to diversity and their clients. But making that bright future a reality means learning lessons from nearly three decades ago, as well as last week.
“Ultimately, any company’s view of arbitration and mediation boils down to whether or not top management insists on winning at all costs,” Carver and Vondra wrote back in 1994.
Prioritizing alternative dispute resolution means truly internalizing the process as an alternative. It’s not a court proceeding in a different set of clothes meant to produce the same outcome that corporate leaders expect. It’s a fundamentally different path, one undertaken in a new spirit with different outcomes.
“For most paths you must come to the table expecting to compromise your claim — the parties use ADR to avoid protracted litigation,” Miller pointed out. “Unfortunately, many business leaders want to roll the dice for complete and total victory; they will not likely get that outcome with ADR. If that is what the business wants, alternative dispute resolution may not be the best path.”
Understanding and appreciating this approach changes your attitude. It changes what you want, and what you want for your clients. That kind of change takes commitment and, yes, time.