Corporate Use and Perceptions of ADR and What It Could Suggest for Legal Education

Fulbright and Jaworski’s recently-released Fourth Annual Litigation Trends Survey Findings
include an intriguing snapshot regarding corporations’ use and views of their dispute resolution process options.  The survey is based on responses from 305 participants—general counsel, associate general counsel, vice-presidents & general counsel, and deputy general counsel—who work for publicly and privately held companies in the U.S. and U.K.  These are significant companies.  Nearly 40% have annual gross revenues of more than $1 billion; 25% gross less than $100 million per year; and the remaining companies’ annual gross revenues fit somewhere in between.  A variety of industries were represented: financial services (24%); energy (13%); technical/communications and manufacturing (12% each); health care (11%); retail/wholesale (10%); and education, engineering/construction, real estate, and insurance (5% or less each). 

Mediation Playing A Big Role in Settlements.  Seventy percent of all the survey participants indicated that in the last 12 months, they settled half or more of the lawsuits or arbitration proceedings they had initiated prior to the commencement of a trial or arbitration hearing.  That is not really surprising.  We know that most cases settle.  But mediation figures in a surprisingly large percentage of these settlements.  Specifically, 50% of the U.S. participants and 51% of the U.K. participants reported that in lawsuits or arbitration proceedings they had initiated, they settled half or more using mediation prior to the trial or arbitration hearing.  The size of the company seemed to matter here.  A whopping 82% of small companies reported this extent of mediation use, compared to 44% for mid-sized companies and 49% for large companies.  It is unclear why the smaller companies are so much more likely to use mediation to reach their settlements.  Are the larger companies more willing and able to negotiate?  Regardless, these numbers suggest that mediation (private and court-connected) is playing an even more significant role in settlement than many ADR advocates (including me) had imagined. 

Settlement As “Impressive Deed.”  Fulbright and Jaworski asked the survey participants to choose “the single most impressive deed performed on their company’s behalf by an outside law firm in the past 12 months.”  Winning a case ranked high, of course, with 32% of U.S. participants and 50% of U.K. participants identifying this as the most impressive deed.  But next came settlement of a case.  Twenty five percent of the U.K. participants and 15% of the U.S. participants selected this option. 

In the Competition Between International Arbitration and Litigation, the Winner Is?  Though most survey participants expected their companies’ use of arbitration to remain stable, they expressed some equivocal perceptions of international arbitration as compared to litigation.  About 75% if the participants perceive that international arbitration and litigation cost about the same; only 9% perceive that international arbitration costs less than litigation.  Fulbright and Jaworski reports that “the overall trend among the survey respondents seems to be that international arbitration is not seen as offering significant cost benefits over litigation.”  Meanwhile, 78% of the participants perceive that it takes just as much time to reach disposition in international arbitration as it does in litigation. 

And in the Competition Among Arbitral Providers?  Fulbright and Jaworski also surveyed the participants regarding their “forum shopping” preferences when they are in the market for an arbitral institution and its rules.  In past surveys, the U.K. participants expressed strong allegiance to the London Court of International Arbitration.  In the 2007 survey, however, these participants expressed increasing interest in the International Chamber of Commerce (ICC), International Institute for Conflict Prevention and Resolution (CPR), and the American Arbitration Association/International Centre for Dispute Resolution (AAA/ICDR).  Among the U.S. participants, AAA/ICDR was the strong favorite, while CPR’s attractiveness had declined somewhat. 

A few years ago, the annual conference of the American Association of Law Schools included a workshop focusing on the relationship between the traditional civil procedure course that focuses on court procedures (and mostly federal district court pre-trial procedures at that) and “alternative” dispute resolution.  These findings from Fulbright and Jaworski—coupled with a desire to prepare my students for the real world and influence their understanding of how the real world should operate–suggest to me that it’s time to take another look at that relationship.  If most cases settle, many of them in mediation, and another significant percentage of cases is resolved in arbitration (with different rules at different institutions), does the traditional civil procedure course provide law students with a useful template regarding what these processes should look like, what skills should dominate them, and what ethics should guide them?  I am not assuming a particular answer to that question, nor do I think it is useful or appropriate to answer the question from the perspective of an ADR advocate.  Instead, I think it’s important to consider what legal world our students are likely to enter as lawyers and then what we hope will characterize that world.  What procedural preparation in law school will make it more likely that they will perform well and ethically in the world they enter and work toward transforming it into the better world we hope for them? 

 You can find the Fourth Annual Litigation Trends Survey Findings at

Nancy Welsh 

One thought on “Corporate Use and Perceptions of ADR and What It Could Suggest for Legal Education”

  1. What kind or style of mediation do you think predominated — a highly positional, distributive one, in which the mediator helped the parties adjust their estimate of the litigation outcome and make concessions, or an interest-based one, in which the mediator helped the parties invent options for mutual gain? Did the survey shed any light on this?

    As for incorporating ADR in Civil Procedure courses, I’ve had success assigning my ADR students to teach a class session in the Civ Pro course on ADR. (The Civ Pro teachers have been quite cooperative. They might even like the break from a day of teaching.)

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