Tuesday, March 08, 2005

THE COMPANY WE KEEP: ADR, tort reform, and the erosion of justice

Over the years alternative dispute resolution (ADR) in all its forms has proliferated, increasing in popularity and accessibility. Mediation and arbitration are widely perceived as affordable, time-saving, private means for resolving disputes, presenting an appealing alternative to the expense, delay, and uncertainty that can characterize litigation.

Mediation and other forms of ADR can certainly spare people the emotional toll and financial costs that adversarial processes like litigation can produce. A friend of mine who mediates workplace and family disputes recently worked with a divorcing couple who came to mediation after spending thousands of dollars on attorneys’ fees. They had realized that they were wasting both time and money battling over issues that they could work out far more cheaply, efficiently and painlessly with the help of a mediator. And what is true in divorce cases is equally true of other kinds of disputes.

My first exposure to ADR came through my initial training by and subsequent volunteer work with grassroots community mediation programs, where mediation is used to bridge differences and empower individuals to become themselves the architects of positive change. Programs like these, which are founded upon idealism, optimism, and an abiding faith in humankind, undoubtedly do much good.

ADR’s success extends well beyond the grassroots level. ADR exists on both micro and macro levels, and today ADR is equally at home in the private and public sector, in schools, in neighborhoods, in federal agencies, in workplaces, in the military, in local, national and international conflicts, and even of course on the Internet.

But the Force, as any Star Wars fan can tell you, has a dark side.

The advantages that ADR offers over litigation have not gone unnoticed by corporate America. Litigation is an expensive proposition for corporations, and the public nature of trial and the evidence that discovery produces can result in embarrassing public revelations regarding corporate policy. Mediation and arbitration, on the other hand, conducted in private and shielded by confidentiality, produce speedy resolutions without public disclosure. ADR has become increasingly attractive to corporations who want to find ways to limit their liability and reduce exposure. Private remedies like arbitration and mediation shield corporate acts from public scrutiny and can result in the concealment of patterns of corporate misconduct.

The prevailing view in Washington is that litigation and jury trials have been bad for corporate America and that reform is urgently needed. Powerful business interests have been lobbying hard to limit access to courts, place caps on the amount of damages a jury can award, and place restrictions on class action lawsuits. (For example, Congress recently approved legislation aimed at restricting the power of state courts to hear class action lawsuits, requiring many of these suits to be filed in federal court instead where class action plaintiffs are less likely to enjoy a sympathetic reception. Good for business, very bad for consumers, patients, employees and others affected by negligent, unethical or illegal corporate practices.) Those sounding the drumbeat for litigation reform have been successful in influencing public opinion of trial attorneys and plaintiffs.

ADR unfortunately has become a piece of this overall pattern, increasingly utilized by the powerful to limit access to the courts by those less powerful. Mandatory arbitration, for example, has become a common feature of many consumer agreements, including everything from health care coverage to the purchase of an automobile. If you have a credit card or motor vehicle insurance, read the fine print—your agreement with either your credit card company or your insurer may well require you to arbitrate any disputes that arise—and most likely in a forum convenient for the company, not for you. And many large corporations—not surprisingly, Halliburton, friend of the current White House, is among these—have instituted mandatory ADR programs to address workplace disputes.

This trend is an alarming one. Those of us who are ADR practitioners need to be very careful of the company we keep and the uses to which ADR is put in our name.

ADR was conceived as a way to do much good, to provide a cost-effective process in which all parties participate on a level playing field, resolution can be achieved quickly, and which produces outcomes capable of creating winners out of everyone. We need to ensure that the affirming principles on which ADR was founded do not become distorted or manipulated for harmful ends.

We should resist the lawyer-bashing that seems to characterize much of the public conversation about litigation today. And let us stop spreading the notion that all litigation is bad—a view I have heard even well-meaning mediators advance in a misguided effort to promote the ADR field.

Litigation and ADR each have their place. There is much that each can offer, depending upon the parties, the case, and the issues at stake.

Mediation can result in what litigation by its nature does not typically allow for: dialogue, reconciliation, and closure. Arbitration avoids the delays of trial, bringing speedy resolution in an informal and private setting. And litigation can be the surest path to uncover truth, right wrongs, and achieve justice.

We need to ensure that all these avenues remain open and be cautious in our enthusiasm to promote the ADR field that we do not risk closing any of them.

May the Force be with you.