By James R. Keller
This article originally appeared as "Alternative Dispute Resolution is Here to Stay," 13 MISSOURI LAWYERS WEEKLY 586, May 24, 1999.
Many of us went to law school because we wanted to try cases in a courthouse. There is great appeal in presenting our client's case to a judge and a jury. Even when we win, however, the monetary expense and emotional toll on our clients may outweigh the trial victory.
Trial means the lawyers and/or their clients could not reach a settlement, assuming they even tried. Quite often, and for a variety of reasons, early efforts to settle may have been nominal or nonexistent.
We all have been through the drill of settling a case on the courthouse steps because the other side refused to discuss the issue earlier. When this happens, even a favorable settlement is frustrating. By then, you were ready for trial, and your client is trying to figure out why this result did not occur many months and dollars earlier.
Far too often, it takes a judge's disapproving look during the pretrial conference or worse yet during opening statement before one or both sides "gets religion" and settles the case. This generally happens because an attorney failed to evaluate correctly the case at an early stage, or his or her client is stubborn. Either way, the result is the same. The judge decides the trial is without merit or a waste of time and absent a fire-sale settlement, someone will pay the price. The attorney then blames the judge for being unreasonable. Even if this scenario produces a good settlement for the clients, they will be unhappy with the process. ADR may have avoided this ugly mess.
Unfortunately, we lawyers need to work harder on deciding which cases must be tried, which cases should be settled early and which ones are appropriate for some form of Alternative Dispute Resolution. More and more, the thoughtful answer will be ADR. In fact, settlement shortly before or during trial should be the rare exception, instead of the norm.
In the world of ADR, binding arbitration replaces a jury or bench trial; mediation replaces an early settlement. ADR also offers many creative methods to resolve a dispute. While arbitration is less sexy than a jury trial, the final results are no less real. ADR may be a trend but it is not a fad. It has merit and staying power. The law schools realize this and now include at least some teaching on ADR in their course curriculum. The University of Missouri at Columbia is a shining example.
While Missouri as a state lags behind many states - such as California - in aggressively promoting ADR, the basics are in place. We trial lawyers should embrace what we do have and probably push for more. Here is what we have at present:
1. Rule 17 of the Missouri Rules of Civil Procedure covers ADR. Rule 17.02(b) requires that if you are involved in a lawsuit "counsel shall advise their clients of the availability of alternative dispute resolution programs." While this provision is mandatory, participation is voluntary. Even so, if you are a trial lawyer and have not yet done so, you should acquaint yourself with all the provisions of Rule 17.
2. Chapter 435 R.S. Mo. covers arbitration. Everyone knows the magic language required in 10 point capital letters to enforce arbitration in Missouri: "THIS CONTRACT CONTAINS A BINDING ARBITRATON PROVISION WHICH MAY BE ENFORCED BY THE PARTIES." 435.460. Other provisions include how to vacate an award - ( 435.405) - which anyone who loses an arbitration will want to consider, and 435.395, which provides that the fees and expenses of the arbitrators shall be paid as outlined in their award. Effective January 1, 1999, the provisions of the American Arbitration Association (AAA) provide that the award can include attorney fees if requested by all parties. See R-45 Commercial Dispute Resolution Procedures and R-43 Construction Industry Dispute Resolution Procedures.
3. Circuit court local rules now include ADR. While the provisions generally parrot Rule 17, and thus the parties can opt out at just about any point, it is a start in the right direction. Let the unreasonable lawyer explain to his client why ADR will not work for them. As presiding judges become more familiar with how this method can reduce their case docket - and thus please the Supreme Court - ADR may explode in popularity and enforcement.
4. The federal courts in the Eastern and Western Districts of Missouri have substantial ADR programs. The Western District's federal program is called an "Early Assessment Program" and it really is just that. The program begins 30 days after the responsive pleadings. The Eastern District's federal program allows a judge to impose sanctions for "any willful or negligent failure to attend any ADR conference, to comply with the Order Referring Case to Alternative Dispute Resolution, or to otherwise cooperate with the ADR process." Local Rule 16-6.05. This is the opposite of Missouri's opt-out- when-you-want plan in Rule 17, and perhaps the state courts in Missouri need to consider a similar approach.
Many contracts, such as construction contracts following the forms from the American Institute of Architects, now require non-binding mediation, and then binding arbitration through AAA. This is two layers of ADR in place of a traditional trial.
There are other signs that ADR is here to stay. ADR provisions (including binding arbitration) now appear in employment agreements for new lawyers joining law firms. This represents an interesting contrast. Established trial lawyers are asking new, aspiring "Perry Masons" to agree their disputes will be resolved without a judge or jury. The very people who make a living from trying cases are contractually agreeing to resolve their own disputes through ADR.
Clients, too, are asking for arbitration, even when not contractually bound. They realize that trials are time consuming and expensive. Business owners must focus on the bottom line, which often means early resolution over eventual trial success.
Arbitrators and mediators are well trained. They have become legitimate adjunct judges. No longer can you expect the simplistic "split-the-baby" approach that dominated some early ADR proceedings, at least in perception if not reality. In fact, both defense verdicts and awards of actual damages, punitives and attorney fees are becoming much more likely results. If you have a bad case, ADR is not an escape hatch to avoid this problem.
There are several reasons why ADR works. Among them are:
1. Secrecy - Leaving aside sports' arbitration, which seems to feed on press leaks, most ADR participants want - and sometimes need - complete confidentiality. If you have ever tried to get the results of a case from a reputable ADR service - such as AAA - you know that it would be easier to rob Fort Knox.
2. Trial by your peers - Clients frequently complain that juries do not understand their situation. They are not true "peers". In arbitration, the panel members are much more likely to understand the industry involved. If you are disputing construction design, for example, you can expect to have an architect or an engineer on your panel of arbitrators.
3. Speed - The proceedings and results are quicker, even with today's emphasis on speedy trials and "rocket dockets". Faster results - absent undue haste - save money and benefit everyone.
If you have not examined recently the laws and procedures for ADR, you really should. Good advocacy requires that we use this method to resolve client disputes. Everyone knows that lawyers love to tell war stories about trial, and the stories seem to end with the same question and answer: "Who won the case?" "I did." While fun to tell, a happy client is still worth more than a good war story.
Trial lawyers need not worry. ADR can make a winner out of all of us. ADR helps to clear the court dockets for the civil cases that still need to be tried the traditional way. This may actually create more trial work by allowing the remaining cases to go to trial more quickly.
Mr. Keller is a partner at Herzog, Crebs & McGhee, LLP in St. Louis, practicing civil litigation with emphasis on business disputes and construction law. He also is a panelist for the American Arbitration Association.