A report by Herbert Smith Freehills, Pricewaterhouse Coopers and the International Mediation Institute reveals that parties want to resolve their disputes through “mixed mode dispute resolution” and collaborative processes, rather than adversarial processes like arbitration – but their combative external counsel haven’t necessarily got the message.
The report, which is to be formally unveiled tomorrow, is based on the responses of more than 4,000 participants in the Global Pound Conference series, which included 28 events held in 24 countries throughout 2016 and 2017. The participants included in-house counsel, private practice lawyers, arbitrators, arbitral institutions, academics and government officials.
Michael McIlwraith, GE global litigation counsel and chair of the Global Pound Conference series, says the report explores “how conflict can and should be managed in the 21st century” and provides dispute resolution lawyers with data from which to question the status quo.
The Chief Justice of Singapore Sundaresh Menon comments: “There is much of value that has been generated by the Global Pound Conference series and it is hoped that the findings that have been reported will inform the choices and decisions of stakeholders who are in a position to shape the dispute resolution landscape.”
Alexander Oddy, the London-based head of alternative dispute resolution at Herbert Smith Freehills and one of the partners who led the research, describes the data in the report as a “mandate for change”, noting that most dispute resolution (including arbitration) follows the adversarial model, which can be inconsistent with the aspirations of parties for quick, consensual resolution
The report says that participants in the report showed “near universal recognition” that “mixed-mode dispute resolution” is the way of the future. 51% of participants thought that parties should rely on non-adjudicative processes such as mediation or conciliation before resorting to arbitration, while another 45% believed an approach combining these processes was desirable.
61% of parties taking part in the survey said they wanted to see a more collaborative approach by their lawyers to resolve disputes as opposed to traditional “zealous advocacy”. However, this jarred with the way lawyers apparently see themselves – 67% saw their role as an advocate for their party.
This disparity in approach was recognised by the survey participants, with 70% suggesting private practitioners are resistant to change in commercial dispute resolution compared with other actors such as governments and in-house counsel. 59% of participants said this resistance is closely linked to a lack of familiarity with the alternative dispute resolution options, rather than a fear that they would affect revenues.
In contrast, 42% of participants thought in-house counsel have the potential to change commercial dispute resolution. A younger generation of in-house counsel influenced by technology are likely to expect to conduct business at a faster pace in the future, making them unwilling to engage in arbitrations lasting several years, the report suggests.
A majority of participants in the survey thought the most improvement to commercial dispute resolution could be brought about through changes to legislation, including to domestic rules of civil procedure permitting parties to opt out of non-adjudicative processes.
47% said protocols promoting non-adjudicative processes would be helpful, such as arbitration clauses and rules encouraging parties to consider alternatives to arbitration before a tribunal is constituted.
The report further explores regional differences in approach to dispute resolution. The majority of participants in Asia (65%) said the demand for certainty and enforceability of outcomes will have the greatest impact on future policy-making in commercial dispute resolution, while all other regions – including the UK, Europe and North America – identified efficiency as the top demand.
European participants in the survey are also singled out in several respects. Sixty-five per cent said that in-house lawyers have the primary responsibility for ensuring parties understand the dispute resolution process, not external lawyers.
Fifty-six per cent also said that insufficient knowledge of dispute resolution options is the main challenge facing parties that seek to resolve their disputes, not time or financial constraints as identified by participants from most other regions.
Strikingly, 63% of European participants also believed that changes in corporate attitudes to conflict prevention will have the greatest influence on the future of commercial dispute resolution. All other regions – Asia, Australia, New Zealand, North America, the UK, Africa, the Middle East and Latin America – thought that a greater emphasis on collaborative processes would have the biggest influence.
The report finds that lawyers in the UK are more likely to recommend ADR to clients than those based in other regions, thanks to the reforms introduced by Lord Woolf to the English civil justice system.
Of the UK participants, 61% said they would recommend procedural options to clients based on the type of outcome they want, unlike participants from all other regions, who identified familiarity with a certain legal process as the most influential factor. Seventy-eight per cent recognised that parties in the UK want lawyers to work collaboratively to help them navigate the process.
Justin D’Agostino, the Hong Kong-based global head of disputes at Herbert Smith Freehills who helped lead work on the report, tells GAR: “The Global Pound Conference has been an ambitious global project, spanning two years, and has produced some fascinating actionable data. This project demonstrates that the 21st century lawyer needs to deliver dispute resolution process design, collaboration to secure efficient results, as well as traditional tough representation when called for.”
The data collected for the report was overseen by the Global Pound Conference academic committee led by Barney Jordaan, professor of management practice at Vlerick Business School in Belgium.
John Fisher, partner at PwC in London, worked on the report for Pricewaterhouse Coopers, while Herbert Smith Freehills partners Oddy, D’Agostino, Julian Copeman and Natasha Johnson led the team at the firm.
Authored by Lacey Young. Article republished with permission of the Global Arbitration Review. The original article can be found here: https://globalarbitrationreview.com/article/1169613/collaboration-is-the-way-forward-says-report