Conflict Resolution|Mediation

"ADR Pledge" — Old School or a Useful Tool?

Some colleagues have been batting back and forth the idea of initiating a Corporate ADR Pledge in our jurisdiction.  They observe that business-to-business disputes continue to be litigated at an alarming rate, and that those who manage corporate disputes may not be aware of the efficiencies that mediation offers.  A Corporate ADR Pledge might raise awareness of the tool, and encourage its broader use.

Others are skeptical of the premises as well as the proposal.  Can there possibly exist a sophisticated attorney, any more, who is unaware of mediation?  Do dispute managers really make decisions while ignorant of their options?  And does an “awareness campaign” really result in increased use?

ADR is best understood by large corporations and by major, sophisticated law firms who represent them.  By contrast, many of the business disputes that are filed in my jurisdiction are “book accounts,” failures to pay contractors for home remodeling, disputes alleging damages to a commercial leasehold by vacating lessees, claims between insurance companies concerning property damage from leaking air conditioners, defaults on personally guaranteed business loans, and so on.  These claimants seek redress in court in the form of an enforceable judgment, and if need be a judgment lien.  How would an “ADR Pledge” reach that deeply into the commercial population, and offer an outcome that is preferable to these judicial remedies?

Still, the vision persists:  What if business managers were accustomed to managing disputes the way they manage other business contingencies, like inventory?  What if principled negotiation, leading to facilitation if necessary, were the default method of resolving inter-business claims, and the court were considered a last, expensive, uncertain and imperfect resort?

An ADR Pledge is, ideally, a statement both by business leaders and by business rank-and-file, that they recognize the commercial irrationality of most business litigation, and that they will engage in it only after having considered all other options.  It is a statement of a principle that one hopes, one day, will be part of rudimentary management training.  Its utility lies in two areas: 

First, it gives businesses an “excuse” to pick up the phone and have a conversation that goes something like: “My lawyer tells me I can sue you and win, but I see you’ve signed the ADR Pledge and so have I so we owe it to each other.  When are you free for lunch?”

Second, it is an example of corporate leadership in the very best and most effective meaning of the term.  A critical mass of endorsers to a Corporate ADR Pledge sends a message to the entire business community that something is going on that they are missing, and they had better catch up.  If businesses representing a substantial percentage of the region’s economic activity were to endorse a Corporate ADR Pledge, then those who haven’t begin to realize that, perhaps, they’d better.

Add to these considerations the fact that it doesn’t cost anything, doesn’t risk anything, and leaves the endorser free to initiate any claim any time and anywhere it chooses, then it seems it’s hard to argue with.

The joke is told of an announcement made during a performance at an old Yiddish theatre that the play cannot continue because of the sudden death of the leading actor.  “Give him an enema!” said a voice from the balcony.  But the man is dead, said the person from the stage.  “It couldn’t hurt,” came the reply.

Well, it couldn’t hurt, could it?

of the Yiddish Theater on

1 Comment
  1. Even if Pledge is not the definitive tool against litigation, it doesn’t mean it is not useful. But, obviously, it depends on the coherence of the ADR policy adopted. If you say mediation is an opportunity you’ll have to go to mediation whatever is the reason.

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