What is Early Dispute Resolution?
Traditional Mediation.
Under a traditional mediation model, a mediator is chosen and a date is set many months into the litigation process. The parties then appear for a one-day mediation, where real negotiations don’t even begin until the end of the day. Many cases do settle at mediation, but at a real cost, as the parties have already incurred substantial expenses in discovery and preparing for a trial that statistically will never occur (even without mediation, almost all cases ultimately settle before trial).
One way to avoid this cost is to mediate right at the beginning of a lawsuit. This poses many challenges, though. Oftentimes, what led to a lawsuit being filed is that the parties’ attempts at settlement broke down. They may then be locked into contrasting views of the dispute and in no mood to restart settlement discussions. Or, even if one or both parties want to restart the discussions, they don’t want to appear weak. Another early roadblock is that once a suit is filed, both sides may feel they need discovery to know what a fair settlement would be. And while we’d prefer not to believe this is the case, some attorneys may prefer to continue billing for discovery, motions, and trial rather than settle early, or some may want to be known as the toughest litigator in town regardless of their clients’ wishes.
The question all lawyers need to ask is this: “What serves their clients’ interests best?” Much of the time, what serves clients best is an early, economical, and fair resolution of their dispute. To assist in this regard, this Court has instituted a pilot program to encourage dynamic “early dispute resolution” mediation.
Early Dispute Resolution (EDR)
Once an answer is filed, the parties engage a specially-trained EDR mediator. The mediator’s goal is to help parties resolve even contentious disputes economically, fairly, and within 30 days of starting the EDR process. The mediator’s training covers the techniques used, the ethical issues that can arise, how to overcome the roadblocks to early resolution and, depending on the issues and amounts at stake, whether to apply the process flexibly or rigorously. The rigorous approach could involve the parties making contractual commitments to each other to participate in good faith and to comply with the higher ethical standards required in the process. If either party doesn’t want to participate in the process in good faith or commit to the higher ethical standards, they should simply state they decline to participate in the process.
For those parties who do want to attempt to find a fair and economical resolution to the dispute in good faith, the process involves five steps:
First, using several evaluative and facilitative techniques, the mediator will see if there is enough common ground to work out a prompt resolution without the need for any further steps.
The second step, if that doesn’t work, is to ask each party to give the mediator their analysis of the case and the limited information they need from the other side to make an informed decision as to the fair value of a case. This should be only what the parties need – what in EDR is called “sufficient information” – to make that judgment (this is not the time for traditional discovery that leaves no stone unturned). The mediator will then work with both sides to trim down the requests to only the sufficient information needed, and will work with the parties to make sure the process is not unduly burdensome. This step should take no longer than five business days.
The third step is to exchange the information. This requires an ethical commitment from each side that they’ll produce the information the other side reasonably requests. If a client doesn’t want to produce the information, the attorney must end the process. If necessary, this step may involve some interviews or short depositions, most likely “off the record.” This step should take no longer than seven business days.
The fourth step is that each party presents its valuation of the case to the mediator and the other side. Here, you’ll need to be specific so that each party knows clearly where the other stands and so the mediator understands each view. You’ll be required to specify numbers and an explanation for: (1) How much does each side expect to spend on fees and expenses to take the case through trial? (2) What would be the best and worst outcome for each side from trial? (3) What is the percentage likelihood of winning on each of the core claims in the suit? (4) If a party prevails on a claim, what’s the low, middle and high range of damages, as well as the likelihood of winning at each level? This process should take no longer than four days.
The fifth step is to try to resolve the dispute. At this stage, with all the information the parties learned, they may be able to promptly negotiate a settlement. The mediator can aid in this negotiation or, if negotiation isn’t successful, conduct a formal mediation. If the parties still can’t resolve the dispute, they should try to negotiate a schedule for discovery (if any more is needed), motions, and a hearing to expedite resolution of the case. The mediator can assist with this. The Court will also cooperate with parties who seek an expedited, economic schedule. This process should take no longer than six days.