Transcript Medabiotech Presentation

CROATIAN BAR ASSOCIATION (Zagreb, June 1st 2009)
NEGOTIATION AND MEDIATION A THREAT OR A BUSINESS NICHE FOR LAWYERS?
Adapt or perish! The importance of
ADR for the future of the legal
profession
Jeremy LACK
Zürich
Seestrasse 39
CH - 8700 Küsnacht
Tel. +41 44 914 88 88
[email protected]
1
Genève
Rue Rodolphe-Toepffer 11bis
CH - 1206 Genève
Tel. +41 22 789 50 20
[email protected]
© B. Sambeth Glasner & J. Lack 2008-9. All rights reserved.
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The “Old World” Paradigm
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The “New World” Paradigm
See:
The World is Flat
Thomas Friedman
e.g., The Internet:
Asia Pacific - Red
Europe/Middle East/Central
Asia/Africa - Green
North America - Blue
Latin American and Caribbean Yellow
RFC1918 IP Addresses - Cyan
Unknown - White
Source:
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http://www.opte.org/maps/
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The growing influence of corporations
• In 2000: 51 of the 100 largest
economies were corporations
• In 2009: 56 of the 100 largest
economies are corporations
• By 2038: 78 of the 100 largest
economies may be corporations.
Hypothesis:
• Corporations may have their own laws
(lex societatis?)
• In-house counsel will have greater
influence
• This will translate into more use of
mediation
Sources: Interbrand (2007), Institute for Policy Studies (December 2000)
M. Leathes, based on Richard Susskind’s “The End of Lawyers?” (2008)
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The commercial perspective of dispute resolution
WHY MEDIATE?
“Turn your dispute from a business
threat into a business opportunity”
Cees J.A. van Lede, Chairman of the Board of Management
Akzo Nobel NV
Source: http://www.mediation-bedrijfsleven.nl/english.shtml#quote4
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What are the possible implications for Lawyers?
“The Legal Profession
is on the brink of
fundamental change”
Prof Richard Susskind
timesonline.com - October 19, 2007
Source: Michael Leathes
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Crisis is good
Danger + Opportunity
Source: Michael Leathes
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The legal profession will have to adapt
The 20th Century Lawyer
• Expresses desires
• Threatens
• Stamps feet
• Tough shell
• Legal expert
• Claims Positions
• Well-trodden path
• Process orientated
• Single-minded
• <50% successful
• Eye-wateringly costly
The 21st Century Lawyer?
• Satisfies needs
• Warns
• Choreographer
• Tough core
• Legal entrepreneur
• Satisfies Interests
• Beats new trails
• Obsessed by outcomes
• Kaleidoscopic
• >80% value generation
• Worth every cent
Source: Michael Leathes, based on Richard Susskind’s “The End of Lawyers?” (2008)
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The 21st Century Lawyer
Source: Michael Leathes
Source: Michael Leathes
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The new EU Mediation Directive 2008/52
“Article 3
Definitions
For the purposes of this Directive the following definitions shall
apply:
(a)‘Mediation’ means a structured process, however named
or referred to, whereby two or more parties to a dispute
attempt by themselves, on a voluntary basis, to reach an
agreement on the settlement of their dispute with the
assistance of a mediator. This process may be initiated by the
parties or suggested or ordered by a court or prescribed by the
law of a Member State. It includes mediation conducted by a
judge who is not responsible for any judicial proceedings
concerning the dispute in question. It excludes attempts made
by the court or the judge seized to settle a dispute in the course
of judicial proceedings concerning the dispute in question.
(b) ‘Mediator’ means any third person who is asked to conduct a
mediation in an effective, impartial and competent way,
regardless of the denomination or profession of that third
person in the Member State concerned and of the way in which
the third person has been appointed or requested to conduct
the mediation.”
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The Choices: Appropriate Dispute Resolution (ADR)
Least Evaluative
Least Structured
Least Formal
Source: J. Kalowski, JOK Consulting
MEDIATION
INDEPENDENT EXPERT
APPRAISAL
CONCILIATION
NEUTRAL EVALUATION
ARBITRATION
Most Evaluative
Most Structured
Most Formal
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NEGOTIATION
Consensual
Parties in control
ADJUDICATION
Adversarial
Third party in control
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Arbitration
Resolution
Source: Joanna Kalowski
A
P1
13
P2
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… Conciliation …
Resolution
Source: Joanna Kalowski
Zone of possible agreement
Precedent
C
Justice
Statute
P1
P2
OBJECTIVE
JUSTICE
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…Mediation
Source: Joanna Kalowski
Resolution
P1
P2
M
SUBJECTIVE
JUSTICE
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The invisible side of all conflicts
A dispute
is never
about
what it is
about…
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The Facts
The Law(s)
The Positions
Misunderstandings
Perceptions
Emotions
Interests
Concerns
Feelings
Beliefs
Values
Needs
Fears
Although the
“objective”
aspects of the
dispute may be
apparent…
…the “subjective”
aspects remain to
be discovered.
© B. Sambeth Glasner & J. Lack 2008-9. All rights reserved.
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Arbitration & Conciliation = rights-based approaches
THE LEGAL SYLLOGISM (an algorithm):
The Facts
The Law(s)
The Positions
Misunderstandings
Perceptions
Emotions
Interests
Concerns
Feelings
Beliefs
Values
Needs
Fears
Facts (past & present)
+
Applicable law(s)
=
Outcomes
(« conclusions »)
“We have to rely only on objective facts”.
“Arbitrators have a ‘sacred duty’ to establish the truth.”
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But “Facts” depend on unconscious biases & perceptions
The Right Brain vs Left Brain test ... do you see the dancer turning clockwise or anticlockwise? If clockwise, then you use more of the right side of the brain and vice versa. Most
of us would see the dancer turning anti-clockwise though you can try to focus and change the
direction; see if you can do it.
LEFT BRAIN FUNCTIONS
uses logic
detail oriented
facts rule
words and language
present and past
math and science
can comprehend
knowing
acknowledges
order/pattern perception
knows object name
reality based
forms strategies
practical
safe
RIGHT BRAIN FUNCTIONS
uses feeling
"big picture" oriented
imagination rules
symbols and images
present and future
philosophy & religion
can "get it" (i.e. meaning)
believes
appreciates
spatial perception
knows object function
fantasy based
presents possibilities
impetuous
risk taking
http://www.news.com.au/dailytelegraph/story/0,22049,22535838-5012895,00.html
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All our senses are processed by our emotions & biases
Perception is 100% emotional (whatever we would like to believe)
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© B. Sambeth Glasner & J. Lack 2008-9. All rights reserved.
Source: http://cti.itc.virginia.edu/~psyc220/kalat/JK379.fig12.13.amygdala_con.jpg
The Amygdala act as a rapid relevance detector:
They act as a switch between the reptilian and neocortical brains
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A new approach to conflict resolution is needed
Source: J. Kalowski
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“We can’t solve the problems
by using the same kind of thinking
we used when we created them”
Albert Einstein
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Mediation + Arbitration = more choice & better outcomes?
Current
thinking:
Med
or Arb
or Med-Arb
or …?
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The Facts
The Law(s)
The Positions
Misunderstandings
Perceptions
Emotions
Interests
Concerns
Feelings
Beliefs
Values
Needs
Fears
© B. Sambeth Glasner & J. Lack 2008-9. All rights reserved.
Arbitration or
litigation
+
Mediation
=
The “big picture”:
a more complete
dispute resolution
process?
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Why try mediation? Three specific considerations
PAST
Source: Joanna Kalowski
UNDERSTANDING
& EXPLORATION
Opening
Parties’
opening statements
Summarising and Agenda setting
Exploration of issues and interests
Private Sessions
Option Generation (v.Alternatives)
PROBLEM
SOLVING
RESOLUTON
FUTURE
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Pre-mediation:
Preliminary Conference
Negotiation(s) (joint & private
sessions)
Agreement/
Closure
Post-mediation:
Enforcement of
agreement
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Why not aim for “Holistic Dispute Resolution”?
The drivers:
• Costs
• Time
• Outcomes
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The Facts
The Law(s)
The Positions
Misunderstandings
Perceptions
Emotions
Interests
Concerns
Feelings
Beliefs
Values
Needs
Fears
1. Is one integrated
“hybrid” process
possible?
2. Can one neutral
do it all?
3. Should we use
two neutrals?
4. Can the neutrals
work as one
team?
© B. Sambeth Glasner & J. Lack 2008-9. All rights reserved.
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“We have to start by
defining the process as
part of the problem”
David Plant
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What type of process will the parties want?
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Directive
Evaluative
Facilitative
Non-Evaluative
Facilitative
Evaluative
Non-Evaluative
(subject matter)
Directive
Non-Evaluative
Evaluative
(subject matter)
Source: Based on L. Riskin “The New Old & New New Grids”
Directive (process)
Facilitative (process)
© B. Sambeth Glasner & J. Lack 2008-9. All rights reserved.
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The Holistic Approach
VALUES
NEEDS
Fundamentals
Constraints
Strategies
Focus
ISSUES
Interests
Positions
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OUTCOMES
Options
Alternatives
© B. Sambeth Glasner & J. Lack 2008-9. All rights reserved.
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First Step = Diagnosis
Target zone for conflict resolution
1
Disagreement
The Problem
2 Debate+polemic
The people
Actions,
3
not words
Images and
4
coalitions
WIN-WIN
5 Deliberate loss
of face
6 Management of
threat
7 Limited destructive blows
WIN-LOSE
8 Fragmentation
of the enemy
9 Together into
the abyss
LOSE-LOSE
Inspired by: Tina Monberg
Source: F. Glasl’s “Confronting Conflict”
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When to try mediation?
WHEN?
“Early Dispute Resolution – the earlier
ADR processes are implemented in the
conflict cycle, the less risk there is of
the dispute escalating out of control.”
Hans Peter Frick, Group General Counsel, Nestlé SA
Source: http://www.mediation-bedrijfsleven.nl/english.shtml#quote4
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Process Design: More Freedom of Choice & Autonomy
Sequential
• Med-Arb
• Arb-Med
• Arb-Med-Con-Med-Arb
• Consent awards
Parallel
• Med//Arb
• Carve-outs
• Windows
• Shadow mediation
• Partnering
Hybrid
• MEDALOA
• Dispute Board
• Co-“medarbiters”
• ???
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© B. Sambeth Glasner & J. Lack 2008-9. All rights reserved.
Factors
Parties
Certainty of outcome
Costs
Time & deadlines
Applicable law(s)
Languages
Skill sets
Venue & distances
Institutional rules
Nationalities/cultures
Counsel
Neutrals (roles & no.)
Availabilities
Advisors & Experts
Confidentiality
Discovery
Implementation
Enforcement
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The ethical obligation to try to settle first
Us et Coutumes de l’Ordre des Avocats (OdA) genevois
Art. 7 - L’avocat doit autant que possible favoriser les solutions transactionnelles. Il n’engagera pas
de procès sans s’être rendu compte qu’un arrangement n’est pas possible. Il informe le
client des risques, des difficultés, du coût prévisible et de l’évolution de l’affaire dont il ne
doit garantir l’issue.
Code suisse de déontologie de la Fédération suisse des avocats (FSA)
Art. 9 - Règlement amiable des litiges - L’avocat s’efforce de régler à l’amiable les litiges, dans la
mesure où l’intérêt du client ne s’y oppose pas. Il tient compte, comme représentant d’une
partie en justice ou conseiller, d’une médiation en cours ou du souhait de l’une des parties
d’en instaurer une.
International Bar Association (IBA) International Code of Ethics (Ed. 1988)
Art. 11 Lawyers shall, when in the client’s interest, endeavour to reach a solution by settlement out
of court rather than start legal proceedings. Lawyers should never stir up litigation.
Is it malpractice not to advise clients about mediation?
Will clients be justified in refusing to pay their litigation invoices?
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The statistics are compelling (Source: ACB, NL 2006)
Average duration of a mediation
4 x ½ day sessions
No. of disputes resolved in a single mediation
15%
Percentage of cases reaching a settlement
79%
Willingness of the parties to repeat mediation
92%
Average value of thedispute
Average cost
Euro 5 million
Euro 3,500.00 / party
http://www.mediation-bedrijfsleven.nl/english.shtml
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© B. Sambeth Glasner & J. Lack 2008-9. All rights reserved.
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The role of the lawyer in mediation
RELATIONSHIP
HIGH
LOW
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COUNSEL
“JOINT
PROBLEM
SOLVER”
ADVISOR
LITIGATOR
TASK ORIENTATION
© B. Sambeth Glasner & J. Lack 2008-9. All rights reserved.
HIGH
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When NOT to mediate or rely only on mediation
GOOD REASONS
• A precedent is needed
• There is an abusive imbalance in power
• One of the parties is dishonest/cannot be trusted
• The neutral is dangerously unqualified
• Certainty of outcome is needed by a specific date
BAD REASONS
• “Mediation is a sign of weakness”
• “It is too soon to mediate”
• “We tried to negotiate, so a mediator won’t add anything”
• “You cannot negotiate with people who are in bad faith”
Mediation is not a magic drug, but should be used much more!
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Can you afford NOT to try mediation?
•
•
•
•
How satisfactory is national court litigation?
How easily are court decisions enforced abroad?
How satisfactory is arbitration in resolving IP
disputes?
Is it responsible to avoid a cheaper process with a
70-80% track record?
You can tailor something
faster
cheaper
better!
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In conclusion
“In the new economy,
those who live by the sword
will be SHOT by those
who don’t “
Gary Hamel
“The world’s leading expert on
business strategy”
Fortune Magazine
Source: Michael Leathes
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