Robert Trizna Questions ADR's Usefulness in Commercial Litigation
Schuyler Roche's Robert Trizna, one of several speakers at the January 24, 2002, Business Litigation Seminar sponsored by the Illinois Association of Defense Trial Counsel, challenged the effectiveness of alternative dispute resolution (ADR) in resolving commercial disputes. Originally a proponent of ADR, Robert spoke from years of experience as an arbitrator, a past chair of the Chicago Bar Association's ADR Committee, a former member of the Illinois State Bar Association's ADR Section Council and the lead attorney on hundreds of commercial cases.
In challenging as "a myth" the ADR industry's claims that ADR is less expensive and more expeditious than litigation, he identified problems inherent in arbitration and mediation—the two ADR methods most commonly employed to resolve business-related disputes—including problems securing qualified arbitrators and mediators; non-existent, limited and unpredictable discovery procedures; non-appealability of erroneous arbitration awards; and unanticipated and excessive costs.
Robert noted that "some businesses have spent tens of thousands of dollars paying arbitrators and mediators on an hourly basis when it would have cost only a few hundred dollars to file in the court system." In addition, assessing the competence and predilections of prospective arbitrators and mediators is often complicated by two facts: most mediated resolutions and arbitration decisions are not reported, and most reported decisions tend to be bare-bones rulings that defy the kind of substantive analysis to which judicial opinions can be subjected. Consequently, agreeing on a mediator or arbitration panel—with anecdote and speculation often dominating the selection process—can take weeks, if not months. Scheduling the arbitration or mediation can cause additional delays as the parties and neutrals struggle to find a block of days or weeks agreeable to all.
Robert also related how delays and additional expense can arise from disputes about discovery, especially where no definitive rules are in place governing whether discovery will be permitted and, if so, how much and what kind. This uncertainty, warned Robert, can result in the parties arguing among themselves and with the arbitrators—and even resorting to the courts, "ostensibly defeating one of the central purposes of private arbitration."
Not surprisingly, his years of experience in addressing these problems with arbitration have made mediation Robert's ADR format of choice for resolving commercial disputes. "Mediation," he explained, "is a settlement procedure, but with a structure and insight furnished by the mediator that are not present in a parties-only settlement conference." A skilled mediator can often motivate and facilitate a negotiated resolution by, among other things, distinguishing between real and illusory issues, by identifying common ground and by sharing with one or both sides the mediator's informed views regarding the merits of each party's position.
Notwithstanding his preference for mediation, Robert offered several suggestions for improving both mediation and arbitration in the commercial context. "Drafting contracts that contain detailed ADR provisions which anticipate and address the procedural problems inherent in ADR," said Robert, "can greatly enhance the cost-effectiveness of whatever process will be employed." All such provisions should include a workable arbitrator and mediator selection process. Arbitration provisions should also include a deadlock resolution process, a discovery plan, hearing procedures, evidentiary rules and cost allocation.
"The effectiveness of ADR for commercial disputes depends on deciding what goals you want to achieve through ADR, and then seeing past the hype to determine whether—and which type of—ADR is the best vehicle for achieving those goals," concluded Robert.