Candy, anyone?\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 The session started with a brief presentation by Patrick Green of the London firm Resolex<\/a>, which specializes in designing dispute management and prevention systems for companies and individual projects.\u00a0 The challenge, he suggested, was to persuade enterprises that early detection and management of disputes is most effective.\u00a0 Knowledge of the events giving rise to the\u00a0problem is very high right at the time of the incident,\u00a0but rapidly deteriorates with the passage of time.\u00a0 The knowledge base begins to be rebuilt as litigation proceeds and trial approaches, but that effort is a very expensive way to reconstruct what was right at-hand at the time the event occured.\u00a0 Moreover, the “re-build” may or may not be accurate.\u00a0 David Burt of E.I. DuPont’s legal team<\/a>\u00a0forcefully attested, based on his years of managing law department budgets, that “mediation is great for the bottom line” and that the practice needs to be driven into other areas of the business.\u00a0 The model of litigation is not business-rational, he said.\u00a0 Indeed, it is the epitome of unbusinesslike conduct in dealing with other enterprises.\u00a0 Every case at DuPont is subjected to an Early Case Assessment process.\u00a0 Once put through mediation, Burt reported, personal injury cases result in a savings of $76,000 per case; employment mediations save an average of $61,000 per case; and business-to-business mediations save a whopping $350,000 per case<\/em>.\u00a0 DuPont’s mediation policies also mean that offers to mediate a particular case are not perceived as a suggesting “weakness”\u00a0because, as Burt put it, “I mediate anything and I mediate all day.”\u00a0<\/p>\n What about the client-lawyer relationship?\u00a0 In-house counsel is there to save the company money, and early engagement does that.\u00a0 Outside counsel is there to put itself out of business, and if they are good at it Burt says they will be engaged to do so repeatedly and be appropriately rewarded for their efforts.\u00a0 Outside counsel need to understand the goals of their client, said Burt: “The business client\u00a0doesn’t want to win — we want the matter over with.”<\/p>\n Al Hilber of insurance giant Swiss Re<\/a> said that, as a reinsurer, his company’s clients are insurers who have ceded risk.\u00a0 These are relationships of very longstanding and are the core asset of Swiss Re’s business.\u00a0 As a result Swiss Re doesn’t use mediation a lot because matters don’t usually get to that stage — they are talked through and accomodations are made.\u00a0 These relationships are mutually beneficial and individual disputes should not be allowed to threaten them.\u00a0 As a direct insurer to Fortune 500 companies, Swiss Re takes a similar approach and “sits down directly” with customers to iron out differences.\u00a0 Indeed, Hilber said, “Swiss Re wants to sell itself” on its willingness to do so.\u00a0 In disputes involving multiple parties, mediation is especially useful in getting the best results for a coordinated group.\u00a0 Everyone involved in mass disasters wants to reduce the total loss amount and to avoid the added expense of litigation.\u00a0 So, said Hilber, “mediation to us is an investment, not an expense.”<\/p>\n David Talbot of Coca-Cola Enterprises presented a dispute avoidance model that was unfamiliar to some in the international audience: the Orgnaizational Ombudsman.\u00a0 Most of the audience was familiar with the “classical” ombudsman, from Skandinavia, being a legislatively-created office to assist people in dealing with the government.\u00a0 By contrast, the Organizational Ombudsman first arose on college campuses in the United States during the unrest of the 1960s.\u00a0 It soon spread to corporate entities.\u00a0 A central reference for the practice is the book Organizational Ombudsman<\/em> <\/a>by Charles Howard.\u00a0\u00a0<\/p>\n Talbot explained that the function of the office is to provide a confidential and trustworthy resource for participants of an enterprise (faculty and students in the case of colleges; employees and managers in the case of companies) to raise substantive issues in a safe environment.\u00a0 Communications are off-the-record, informal, and do not constitute legal notice to the company.\u00a0 The Ombudsman’s office\u00a0is structurally independent of legal or management functions and is designed for those relatively rare instances when Human Resources, Compliance, Legal and other functions are inappropriate.\u00a0 The Ombudsman can provide non-attributed information to management that can improve the functioning of the organization and divert potential disputes.\u00a0 The Ombudsman reports directly to the President’s office, avoiding exposure to individuals implicated in the issue.\u00a0 Talbot called the Ombudsman “impartial and multi-partial: We treat everyone the same way.”\u00a0 The desired effect of the office is to identify problems and permit their being addressed before they mature into more serious issues.\u00a0 Rumors are answered, concerns are followed-up, and the organization is run in a healthier way.<\/p>\n Roland Schroeder of General Electric Company noted at the outset of his remarks that “ADR is not an alternative — it is a management tool like any other,\u00a0to be used when the situation calls for it.”\u00a0 The core of the challenge is to identify problems that need to be litigated, segregate them from problems that don’t, and proceed accordingly.\u00a0 But this seemingly straightforward task is usually not done well enough, unless it is formalized, monitored and measured for performance achievement.\u00a0 GE, said Schroeder, is not in business to fight with shareholders, governments, customers, service providers and other essential stakeholders.\u00a0 It is in business to create value, and litigation emphatically does not create value.\u00a0 The company seeks to identify exposure early, book liabilities accurately, find out whether payment will be due and in what quantum, and get liabilities behind it.\u00a0 Therefore, Early Case Assessment is at the heart of the system.\u00a0<\/p>\n Actions need to be taken, not postponed.\u00a0 Decisions should be made on the basis of the 80% that you know, not on the 20% that you don’t.\u00a0 The 2 or 3 notebooks of critical documents can be made early on in a matter, and they will seldom be significantly changed.\u00a0 What does GE consider a “win”?\u00a0\u00a0That is a function of what GE needs out of the case and how soon it gets it.\u00a0<\/p>\n Lawyers are invited to the business table early at GE to learn the deal or the project and to take part in ongoing problem-solving efforts.\u00a0 Lawyers are better problem-solvers than a lot of their clients give them credit for, said Schroeder.\u00a0 They can look around the corner, be alert to what is happening, report on what issues competitors are facing.\u00a0 Similarly, after every case Schroeder conducts a “lessons learned” session with inside and outside counsel and the business people to learn what went wrong, what should be done differently, and what changes might be called for in other contracts or deals.\u00a0 When asked what advice he would give an outside law firm seeking work from GE, Schroeder said “Make yourself a partner of the company.\u00a0 Tell us how to get rid of this quickly.”<\/p>\n<\/a><\/p>\n
<\/a>He concluded that early convening,\u00a0when the actors are still on-site, memories are fresh and remedial options are immediately available, is the ideal timing.\u00a0 \u00a0<\/p>\n