1© B. Sambeth Glasner & J. Lack 2008-9. All rights reserved. Zürich Seestrasse 39 CH - 8700 Küsnacht Tel. +41 44 914

1 © B. Sambeth Glasner & J. Lack 2008-9. All rights reserved. www.altenburger.ch

ZürichSeestrasse 39CH - 8700 KüsnachtTel. +41 44 914 88 [email protected]

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NEGOTIATION AND MEDIATION -A THREAT OR A BUSINESS NICHE FOR LAWYERS?

Adapt or perish! The importance of ADR for the future of the legal profession

Jeremy LACK

CROATIAN BAR ASSOCIATION (Zagreb, June 1st 2009)


2

The “Old World” Paradigm


See: The World is Flat Thomas Friedman

e.g., The Internet:Asia Pacific - RedEurope/Middle East/Central Asia/Africa - GreenNorth America - BlueLatin American and Caribbean - YellowRFC1918 IP Addresses - CyanUnknown - White

The “New World” Paradigm

Source: http://www.opte.org/maps/


The growing influence of corporations

Sources: Interbrand (2007), Institute for Policy Studies (December 2000) M. Leathes, based on Richard Susskind’s “The End of Lawyers?” (2008)

• In 2000: 51 of the 100 largest economies were corporations

• In 2009: 56 of the 100 largest economies are corporations

• By 2038: 78 of the 100 largest economies may be corporations.

Hypothesis:

• Corporations may have their own laws (lex societatis?)

• In-house counsel will have greater influence

• This will translate into more use of mediation


“Turn your dispute from a business threat into a business opportunity”

Cees J.A. van Lede, Chairman of the Board of ManagementAkzo Nobel NV

Source: http://www.mediation-bedrijfsleven.nl/english.shtml#quote4

The commercial perspective of dispute resolution

WHY MEDIATE?


“The Legal Profession is on the brink of

fundamental change”Prof Richard Susskind

timesonline.com - October 19, 2007

What are the possible implications for Lawyers?

Source: Michael Leathes



Crisis is good

Danger + Opportunity



The legal profession will have to adapt

The 20th Century Lawyer

• Expresses desires• Threatens• Stamps feet• Tough shell• Legal expert• Claims Positions• Well-trodden path• Process orientated• Single-minded• <50% successful• Eye-wateringly costly

The 21st Century Lawyer?

• Satisfies needs• Warns• Choreographer• Tough core• Legal entrepreneur• Satisfies Interests• Beats new trails• Obsessed by outcomes• Kaleidoscopic• >80% value generation• Worth every cent

Source: Michael Leathes, based on Richard Susskind’s “The End of Lawyers?” (2008)


The 21st Century Lawyer




The new EU Mediation Directive 2008/52

“Article 3DefinitionsFor the purposes of this Directive the following definitions shall apply:

(a)‘Mediation’ means a structured process, however named or referred to, whereby two or more parties to a dispute attempt by themselves, on a voluntary basis, to reach an agreement on the settlement of their dispute with the assistance of a mediator. This process may be initiated by the parties or suggested or ordered by a court or prescribed by the law of a Member State. It includes mediation conducted by a judge who is not responsible for any judicial proceedings concerning the dispute in question. It excludes attempts made by the court or the judge seized to settle a dispute in the course of judicial proceedings concerning the dispute in question.

(b) ‘Mediator’ means any third person who is asked to conduct a mediation in an effective, impartial and competent way, regardless of the denomination or profession of that third person in the Member State concerned and of the way in which the third person has been appointed or requested to conduct the mediation.”


The Choices: Appropriate Dispute Resolution (ADR) Least Evaluative

Least StructuredLeast Formal

Most EvaluativeMost Structured

Most Formal

Consensual Parties in control

Adversarial Third party in control

NEGOTIATION

MEDIATION

INDEPENDENT EXPERT APPRAISAL

CONCILIATION

NEUTRAL EVALUATION

ARBITRATION

ADJUDICATION

Sourc

e:

J. K

alo

wsk

i, JO

K C

onsu

ltin

g


AA

P1P1 P2P2

Resolution

Arbitration

Source: Joanna Kalowski


… Conciliation …

P1P1 P2P2

CCPrecedent Justice

OBJECTIVE JUSTICE

Statute

Resolution


Zone of possible agreement


MM

P1P1 P2P2

Resolution

…Mediation

SUBJECTIVE JUSTICE



Although the “objective” aspects of the dispute may be apparent…

…the “subjective” aspects remain to be discovered.

The invisible side of all conflicts

The FactsThe Law(s)

The Positions

Misunderstandings Perceptions

EmotionsInterestsConcerns FeelingsBeliefsValuesNeedsFears

A dispute is never about what it is about…


Arbitration & Conciliation = rights-based approaches

THE LEGAL SYLLOGISM (an algorithm):

Facts (past & present)+

Applicable law(s)=

Outcomes(« conclusions »)

“We have to rely only on objective facts”.“Arbitrators have a ‘sacred duty’ to establish the

truth.”

The FactsThe Law(s)

The Positions




The Right Brain vs Left Brain test ... do you see the dancer turning clockwise or anti-clockwise? If clockwise, then you use more of the right side of the brain and vice versa. Most of us would see the dancer turning anti-clockwise though you can try to focus and change the direction; see if you can do it.

http://www.news.com.au/dailytelegraph/story/0,22049,22535838-5012895,00.html

LEFT BRAIN FUNCTIONSuses logicdetail orientedfacts rulewords and languagepresent and pastmath and sciencecan comprehendknowingacknowledgesorder/pattern perceptionknows object namereality basedforms strategiespracticalsafe

RIGHT BRAIN FUNCTIONSuses feeling"big picture" orientedimagination rulessymbols and imagespresent and futurephilosophy & religioncan "get it" (i.e. meaning)believesappreciatesspatial perceptionknows object functionfantasy basedpresents possibilitiesimpetuousrisk taking

But “Facts” depend on unconscious biases & perceptions


All our senses are processed by our emotions & biases

Source

: http

://cti.itc.virg

inia

.ed

u/~

psy

c22

0/k

ala

t/JK3

79

.fig

12

.13

.am

yg

dala

_con.jp

g

Perception is 100% emotional (whatever we would like to believe)

The Amygdala act as a rapid relevance detector:They act as a switch between the reptilian and neocortical brains


A new approach to conflict resolution is needed

Source: J. Kalowski


“We can’t solve the problems

by using the same kind of thinking

we used when we created them”

Albert Einstein


Arbitration or litigation

Mediation

Mediation + Arbitration = more choice & better outcomes?

The FactsThe Law(s)

The Positions



+

=

The “big picture”: a more complete

dispute resolution process?

Current thinking:

Medor Arbor Med-Arbor …?


Private Sessions

FUTURE

PASTOpeningParties’

opening statements

Summarising and Agenda setting

Exploration of issues and interests

Option Generation (v.Alternatives)

Negotiation(s) (joint & private sessions)

Agreement/ Closure

UNDERSTANDING & EXPLORATION

PROBLEM SOLVING

RESOLUTON

Post-mediation: Enforcement of agreement

Pre-mediation: Preliminary Conference

Why try mediation? Three specific considerationsSourc

e:

Joan

na K

alo

wsk

i


Why not aim for “Holistic Dispute Resolution”?

The FactsThe Law(s)

The Positions



1. Is one integrated “hybrid” process possible?

2. Can one neutral do it all?

3. Should we use two neutrals?

4. Can the neutrals work as one team?

The drivers:

• Costs

• Time

• Outcomes


“We have to start bydefining the process as

part of the problem”

David Plant


What type of process will the parties want?

Facilitative (process)

Directive (process)

Non

-Evalu

ati

ve

(su

bje

ct

matt

er)

Evalu

ativ

e (s

ub

ject m

atte

r)

Sou

rce:

Based

on

L.

Ris

kin

“Th

e N

ew

Old

& N

ew

New

Gri

ds”

DirectiveNon-Evaluative

DirectiveEvaluative

FacilitativeNon-Evaluative

FacilitativeEvaluative

Arbitr

atio

n/

Conci

liatio

n

Concilia

tion

Med

iatio

n

Med

iatio

n


Fundamentals

Tim

e

Money

Laws

VALUES NEEDS Constraints

Strategies

ISS

UES

OU

TC

OM

ES

The Holistic Approach

Focus


First Step = Diagnosis

Together intothe abyss

Limited destr-uctive blows

Fragmentation of the enemy

Management ofthreat

Images andcoalitions

Deliberate loss of face

Actions, not words

DisagreementThe Problem

Debate+polemicThe people

1

2

3

4

5

6

7

8

9

WIN-WIN

WIN-LOSE

LOSE-LOSEInspired by: Tina MonbergSource: F. Glasl’s “Confronting Conflict”

De-escalation

Escalation

Target zone for conflict resolution


“Early Dispute Resolution – the earlier ADR processes are implemented in the conflict cycle, the less risk there is of the dispute escalating out of control.”

Hans Peter Frick, Group General Counsel, Nestlé SA

Source: http://www.mediation-bedrijfsleven.nl/english.shtml#quote4

When to try mediation?

WHEN?


Factors• Parties• Certainty of

outcome• Costs• Time & deadlines• Applicable law(s)• Languages• Skill sets• Venue & distances• Institutional rules• Nationalities/

cultures• Counsel• Neutrals (roles &

no.)• Availabilities• Advisors & Experts• Confidentiality• Discovery• Implementation• Enforcement

Process Design: More Freedom of Choice & Autonomy Sequential

• Med-Arb• Arb-Med• Arb-Med-Con-Med-Arb• Consent awards

Parallel• Med//Arb• Carve-outs• Windows• Shadow

mediation• Partnering

Hybrid• MEDALOA• Dispute Board• Co-“medarbiters”• ???


The ethical obligation to try to settle firstUs et Coutumes de l’Ordre des Avocats (OdA) genevoisArt. 7 - L’avocat doit autant que possible favoriser les solutions transactionnelles. Il

n’engagera pas de procès sans s’être rendu compte qu’un arrangement n’est pas possible. Il informe le client des risques, des difficultés, du coût prévisible et de l’évolution de l’affaire dont il ne doit garantir l’issue.

Code suisse de déontologie de la Fédération suisse des avocats (FSA)Art. 9 - Règlement amiable des litiges - L’avocat s’efforce de régler à l’amiable les

litiges, dans la mesure où l’intérêt du client ne s’y oppose pas. Il tient compte, comme représentant d’une partie en justice ou conseiller, d’une médiation en cours ou du souhait de l’une des parties d’en instaurer une.

International Bar Association (IBA) International Code of Ethics (Ed. 1988)Art. 11 Lawyers shall, when in the client’s interest, endeavour to reach a solution

by settlement out of court rather than start legal proceedings. Lawyers should never stir up litigation.

Is it malpractice not to advise clients about mediation? Will clients be justified in refusing to pay their litigation

invoices?


The statistics are compelling (Source: ACB, NL 2006)

Average duration of a mediation 4 x ½ day sessions

No. of disputes resolved in a single mediation

15%

Percentage of cases reaching a settlement

79%

Willingness of the parties to repeat mediation

92%

Average value of thedispute Euro 5 million

Average cost Euro 3,500.00 / party

http://www.mediation-bedrijfsleven.nl/english.shtml


The role of the lawyer in mediation

TASK ORIENTATIONTASK ORIENTATIONLOW HIGH

ADVISOR

COUNSEL

LITIGATOR

HIGH

“JOINTPROBLEMSOLVER”

RE

LA

TIO

NS

HIP

RE

LA

TIO

NS

HIP


When NOT to mediate or rely only on mediation

GOOD REASONS• A precedent is needed• There is an abusive imbalance in power• One of the parties is dishonest/cannot be trusted• The neutral is dangerously unqualified• Certainty of outcome is needed by a specific date

BAD REASONS• “Mediation is a sign of weakness”• “It is too soon to mediate”• “We tried to negotiate, so a mediator won’t add anything”• “You cannot negotiate with people who are in bad faith”

Mediation is not a magic drug, but should be used much more!


• How satisfactory is national court litigation?• How easily are court decisions enforced

abroad?• How satisfactory is arbitration in resolving IP

disputes?• Is it responsible to avoid a cheaper process

with a 70-80% track record?

You can tailor somethingfaster

cheaperbetter!

Can you afford NOT to try mediation?


““In the new economy, In the new economy, those who live by the sword those who live by the sword

will be will be SHSHOTOT by those by those who don’t “who don’t “

Gary Hamel

“The world’s leading expert on business strategy”

Fortune Magazine


In conclusion

Documents

1© B. Sambeth Glasner & J. Lack 2008-9. All rights reserved. Zürich Seestrasse 39 CH - 8700 Küsnacht Tel. +41 44 914