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December 11, 2008

The Recession: Litigation, litigation, litigation--but different this time.


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 all over the world in the next few years: arbitration. The world's recent financial calamities likely gave 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". The "WAF"--Wimpy (or Wanker, in UK) Arbitrator Factor--favors the company with the weaker case.*

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

ADR's main advantages? For WAC?, there are just two. Only two--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.

The Judgment of Solomon.jpg

Raphael's "The Judgment of Solomon"

*Practice Tip: Your client has 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 wimps/wankers on the Arbitrator List, and manipulating opponents into picking the "least objectionable wimp" for your client.

Posted by JD Hull at December 11, 2008 11:59 PM


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