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March 21, 2011

Business-to-Business Recession Litigation: Smarter, and Shorter, Battles This Time.


Finality itself is, very often, your client's "win".

--Some in-house guy in northern Italy, and others.

Let's indulge in a few law markets stereotypes.

Good times = expansion and deals. Bad times = smaller pies and lawsuits. Generally, it's true. But expect something different in the long run: more arbitration. The world's economic "new normal" has already given ADR (alternative dispute resolution) a huge boost.

However, I've never bought the idea that ADR generally is "faster, cheaper and better..." than court litigation to hear and decide disputes between corporate clients. Faster? Maybe, if you work at it. Cheaper? Maybe, if you work at it. Better result? Maybe, and only if the arbitrator is not afraid to apply the law, and not wimp out and merely "split the baby".*

But arbitration does hold the promises of its promotional cliches. You have to work hard for them, though.

Arbitration's main advantages--either in U.S. or abroad? For us, there are three. Only three--so don't buy or drink the promotional Kool-Aid unless you have nothing better to do. First, ADR allows non-U.S. litigants who are parties to deals with ADR clauses to avoid U.S. courts, which are dreaded due to perceived inefficiencies, delays, surprises and unexpected expense, and the very real possibility of awakening The Yankee Vampire: big jury verdicts with punitive damages.

Second, and more importantly, ADR lets litigants select their own judge or panel of judges. You can often find more skillful, expert and efficient deciders than the government's jurists (i.e., state court judges in America) to hear and decide your dispute. In ADR, those panelists are everything. GCs and their law firms should spend time, money and brainpower selecting them. And even for many disputes around $10 million, you don't need a panel. You just need one "good" man or woman. Get it over with. Repose and finality is very often itself a "win".

Third, you can write your own procedural rules--or borrow from the many fine sets already out there.

The Judgment of Solomon.jpg

Raphael's "The Judgment of Solomon"

*Your client's case is the weaker one? The "WAF"--Wimpy (or Wanker, in UK) Arbitrator Factor--usually favors the company with the weaker case. If after your firm's best case development you are stuck with really bad facts and/or bad law--and you can't get back to a court with a jury--consider identifying wankers on the Arbitrator List, and manipulating opponents into picking the "least objectionable wanker" for your client.

Posted by JD Hull at March 21, 2011 11:59 PM


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