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August 03, 2006

First-Rate Mediators Are Worth Their Weight In Gold.

Robert Ambrogi is an interesting guy. A lawyer and ADR specialist, he is also a polished journalist and wordsmith. Bob writes well, and economically--yet not enough of us take the time to rave about it. Go figure.

His new piece, "Do Mediators Sell Themselves Short?", in Law.com's Legal Blog Watch, started me thinking. A late convert to abitration 10 years ago, I now speak about ADR before groups, especially international ones. I finally learned that smart non-US companies--especially those based in certain European jurisdictions where court litigation really is more efficient--are not that worried about what law gets applied. Instead, they insist on binding arbitration clauses in their deals where American companies are participants because they do fear that even a fast-track federal court in the U.S. will mean excessive fees and delays.

So is ADR is always "cheaper, faster and better"? No. The quality of the arbitrator(s)--not the rules you adopt--is everything. Period. In large commercial cases, binding arbitrations are not cheap. A panel of three blue-ribbon arbitrators, experts, far away venues, and travel and lodging will cost you. Arbitrations, moreover, often take on the tenor and procedures of "real" trials, and many are quite lengthy. Finally, many decisions and awards are honest but "less than scholarly". If you have great facts and winning law, you might be disappointed.

And why mediate? If it's not binding, what's the point? Isn't it just another expense? I used to ask the same questions. The answer is that mediation is very effective when you don't want a binding result and if you have a very good mediator. I concluded this in 1999 during a productive eve-of-trial mediation in Salt Lake City in which a hard-working mediator gave three pumped-up parties and their counsel new takes on their respective cases in a day's work. If a mediator pro-actively, thoughtfully and energetically guides all parties, mediation can serve as a sober reality check on how a judge, or even a jury, might view the facts and decide.

So in Utah my GC--who loves trials as much as I do--and I settled it. And we settled "well", without regret and with our eyes open. We paid the arbitrator, handsomely, as I recall, and it was worth it. Since then my firm has used mediators sparingly, at the right times and in the right circumstances. Getting back to Bob's article, a skilled and skillful mediator works (a) very, very hard and is (b) worth his or her weight in gold. By all means, pay them. And maybe pay them more than arbitrators. What they do takes a mix of legal ability, people skills and energy that very few of us have.

Posted by JD Hull at August 3, 2006 04:45 PM

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