The Early Dispute Resolution Institute Practice Protocols are guidelines for the process of early dispute resolution. The Protocols should not be construed as legal advice or as creating a lawyer-client relationship.
©EDR Institute 2019-2023 (revised April 26, 2023)
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Cases rarely go to trial or arbitration hearing. Some are dismissed early through motion practice; almost all others settle. But settlement often comes only after the parties have invested considerable time and money in discovery and motions. EDR is a process for avoiding these costs by reaching settlement early, economically, and through principled negotiation based on informed risk-benefit analysis.
The EDR process is simple to summarize. Lawyers quickly and economically obtain sufficient information regarding disputes, enabling them to confidently forecast the expected value of a case and determine reasonable settlement ranges. Clients then have sufficient information to make informed decisions regarding resolution of the dispute. EDR has four steps: (i) initial dispute assessment, (ii) information and document exchange, (iii) risk-benefit analysis, and (iv) final resolution. The Protocols set procedural and ethical standards and guidance for each step of the process. EDR is flexible and parties should cooperate to adapt the process for their particular dispute.
EDR works best when facilitated by a trained neutral with a comprehensive understanding of the processes, concepts, skills, and ethical standards in the Protocols, and their practical application. The EDR Neutral can help parties tailor the process appropriately to their dispute, assist the parties in avoiding impasse, and keep the process on schedule.
The Institute first published Protocols in 2019. Since then, neutrals, judges, and lawyers have been applying the process described in the Protocols to resolve disputes. Based on lessons learned from the application of the process, the Institute periodically updates the Protocols to reflect best practices, and shall continue to do so. This is the Institute’s third published version.
1.1 EDR is a Process
Dispute resolution under the Protocols is a process, not an event. At the inception of the process, the parties and EDR Neutral should set a date for a formal mediation session, and then the EDR Neutral begins the process promptly through individual or joint caucuses with the goal of resolving the dispute as expeditiously as possible. If the parties do not resolve the dispute by the date of the formal mediation session, their work leading up to it should result in a focused and shorter session that avoids the negotiating tactics that parties commonly use in traditional one-day mediation.
1.2 Flexible Application
The Protocols have defined steps, processes, concepts, skills, and ethical standards that guide counsel and parties in seeking speedy, economical, and principled resolution of disputes. Parties may formally adopt the Protocols in whole or part for their dispute resolution process, or may use them flexibly as general guidelines.
1.3 The Protocols and Professional Rules of Conduct
In the EDR process, counsel remain subject to the rules of professional conduct in their respective jurisdictions. The Protocols set additional ethical standards that are specific to the EDR process and that the applicable rules of professional conduct may not directly address.
2.1 Ethical Standards for Counsel and Parties
In proceeding under the Protocols, either formally or by using them as guidelines, counsel and parties shall comply with the following ethical standards:
2.2 The EDR Agreement
Before starting the process, the parties should prepare an EDR Agreement to reflect the terms under which they will proceed. The EDR Agreement may be in the form of the EDR Neutral’s retention letter, a dispute resolution clause in a contract, or stand-alone agreement.
2.3 Confidentiality
State statutes and court rules governing the confidentiality of mediation may not apply to EDR under the Protocols. As a result, parties should consider stating in their EDR Agreement that they intend for the statutes and rules to apply to the process. To maximize confidentiality protection, parties should also consider providing affirmatively that:
(a) The conduct of any party, lawyer, or retained expert in EDR and all communications, whether oral or written, between or among them, including those with the EDR Neutral, should constitute compromise negotiations under Federal Rule of Evidence 408 and its state counterparts; and
(b) Communications and any written materials, tangible items, and other information used in the EDR process shall not be discoverable or admissible in any proceeding relating to the dispute, or in any other proceeding between or among any parties to the dispute, unless the communications or materials would be admissible or discoverable independently of the EDR process. This restriction does not apply to the admissibility of a full or partial settlement agreement entered into as part of the EDR process, which would be governed only by the confidentiality or other restrictions, if any, in that agreement.
2.4 The EDR Neutral
EDR works best when the parties retain an EDR Neutral, trained in the Protocols, to facilitate the EDR process.
2.5 Permissive and Mandatory Withdrawal by Parties
Parties may withdraw from the EDR process at any time for any reason. Parties must withdraw if they cannot continue the process in compliance with the Protocol’s ethical standards or the terms of their EDR Agreement.
2.6 Permissive and Mandatory Withdrawal by EDR Neutrals
EDR Neutrals may withdraw from the EDR process at any time or for any reason. If they become aware that either party is not compliant with the Protocols’ ethical standards or the parties’ EDR Agreement, the EDR Neutral must provide notice, ex parte, to the non-compliant party. If that party does not timely cure the non-compliance, the EDR Neutral must withdraw but may not provide an explanation for the withdrawal.
2.7 The Four Steps
The EDR process consists of four steps:
(a) Initial Case Assessment;
(b) Information and Document Exchange(including, if appropriate, EDR Experts);
(c) Risk-Benefit Analysis; and
(d) Final Resolution.
2.8 Sufficient Information – Counsel, Parties and Experts
Sufficient Information refers, respectively, to the limited set of information that:
2.9 Expected Value
Expected Value, calculated as part of Risk-Benefit Analysis to determine a reasonable settlement range for the case, is the average of the likely damage amounts discounted by the likelihood of their being awarded. EDR is based on the premise that skilled lawyers with Sufficient Information can forecast the Expected Value and reasonable range of settlement early and economically as confidently as they could after full discovery and motion practice.
3.1 Determine the Strengths and Weaknesses of the Case
In light of the expedited nature of the EDR process, counsel need to promptly develop an understanding of the material facts by interviewing the key people involved; locating and reviewing key documents; and identifying other material information, both helpful and harmful to the case.
3.2 Identify Core Claims/Defenses
Based on this understanding, counsel should identify the core claims and defenses in the dispute, disregarding those that are peripheral. To the extent claims and defenses have similar elements, they should be grouped together.
3.3 Request Information/Documents Needed to Develop Sufficient Information
Counsel should determine the limited information or documents, if any, needed to make a Sufficient information Request. The EDR Neutral should work with counsel to ensure that the requests are narrowly tailored to seek only Sufficient Information. This is not general discovery as practiced in courts. The EDR Neutral should facilitate conveying each party’s requests to the other, and should ensure that each counsel concurs that the other’s requests are reasonably limited to Sufficient Information.
4.1 Construe Sufficient Information Requests Broadly
In determining whether documents are responsive to a Sufficient Information Request, the responding party should construe the requests broadly and provide the material information or documents that could be deemed reasonably covered by the request. This is not meant to invite a document dump, but a recognition that requests should elicit the documents needed for Sufficient Information, and should not be parsed to avoid providing what the other party is seeking. Responsive documents that are unfavorable to a party must be produced.
4.2 Questioning Other Side’s Witnesses
4.2.1 Limited Use. If needed to develop Sufficient Information, counsel may ask to interview witnesses, on or off the record, whom the other side controls. The number of interviews and the questions to the witnesses should be narrowly tailored to what is needed for counsel to develop Sufficient Information. The process should be used sparingly; these are not depositions.
4.2.2 Procedure. Parties should agree on a procedure that seeks to elicit information fairly, which may include requesting the EDR Neutral to ask the questions that counsel provides. The responding party should encourage its witness(es) to answer questions responsively and not to unreasonably parse questions in a way that would hold back relevant information.
4.3 Verification of Compliant Response
A requesting party may ask the responding party and its counsel to declare in writing that the responding party has made a Compliant Response to the requesting party’s Sufficient Information Request, which means that:
If the parties resolve their dispute in EDR, the settlement agreement might include a material representation from each party that it made a Compliant Response to the other party’s Sufficient Information Request.
4.4 EDR Experts
4.4.1 Experts Discouraged. Using experts in EDR (“EDR Experts”) is discouraged because they add significant cost and time, while adding little value because they simply contradict each other with opinions already known by the parties. If counsel does need an EDR expert to develop Sufficient Information, counsel should retain the EDR Expert to perform the limited scope of preparing an EDR Expert Report.
4.4.2 EDR Expert Sufficient Information Exchange. If an expert is needed, counsel should request from the other side the limited information or documents, if any, that the expert must have to issue an EDR Expert Report. Counsel should cooperate in providing the necessary information to each other, and the EDR Neutral should facilitate the process.
4.4.3 EDR Expert Report. The EDR Expert Report should be limited to a concise statement of the expert’s opinions and key findings. Unless the parties otherwise agree, parties may not use the EDR Expert Report in litigation or arbitration following an EDR process that does not result in settlement.
4.4.4 Joint Experts. The parties may jointly retain an EDR Expert to issue an EDR Expert Report. The written agreement to retain the Joint EDR Expert should address guidelines for (i) communications between the expert, on the one hand, and either or both parties’ counsel, on the other, and (ii) access to the expert’s work product. Unless the parties otherwise agree, parties may not use the joint EDR Expert Report in litigation or arbitration following an EDR that does not result in settlement.
5.1 Overview
In this step, each counsel, working with the EDR Neutral, prepares a risk-benefit analysis of the case based on a set of seven Risk-Benefit Factors, three of which are used to compute Expected Value, and four of which address key subjective risk-benefit factors (“Subjective Risk Factors”).
5.2 Forecasting the Expected Value Variables
To calculate the Expected Value of the client’s case, each counsel forecasts three variables:
5.3 The Calculation of Expected Value
Based on these variables, counsel should calculate Expected Value using probability logic and the statistical formula for calculating Expected Value. The EDR Neutral should be skilled in this process and can assist counsel with forecasting, probability logic, and calculation of Expected Value. In most cases, this process is best accomplished by using a decision tree. Absent consent, the EDR Neutral may not share one party’s calculation of Expected Value with the other party.
5.4 The Subjective Risk Factors
Counsel should also assess four Subjective Risk Factors that parties should consider in making informed decisions on settlement: risk tolerance, leverage, collectability, and impact on the business.
5.5 Reasonable Settlement Range
Based on the Expected Value and Subjective Risk Factors, each counsel should recommend to their client a reasonable range of payment (paid or received) and non-monetary terms for resolution. Each party’s settlement range, whether exchanged with the other party or only with the EDR Neutral, serves to bracket the parameters for settlement. When appropriate, interest-based options should also be explored as a way to settle the dispute.
6.1 Principled Negotiation
Based on the Risk-Benefit Analysis, each party in the Final Resolution Step should be prepared to engage in Principled Negotiation, which is negotiation based on objectively discussing the Expected Value variables and the effect of the Subjective Risk Factors. The EDR Neutral facilitates Principled Negotiation through shuttle diplomacy or, if appropriate, joint sessions, to help the parties resolve the dispute before the scheduled mediation.
6.2 Mediation
If the parties have not resolved the dispute before the scheduled mediation session, they continue to engage in Principled Negotiation in the formal mediation session.
6.3 Binding Procedure Absent Final Resolution Through EDR
If the parties do not resolve the dispute before or at the mediation session, the parties should consider agreeing to a binding resolution process that is expedited and economical. This might be standard arbitration with limited discovery, tight deadlines, and an early date for the hearing, or it might be some variant like baseball arbitration with fee shifting.