Conversation with Peter Benner about PEDR, Part 5

This conversation started with my post about planned early dispute resolution (PEDR).  My friend, Peter Benner, and I exchanged comments in that post.  Here are links to Part 2-ish, Part 3, and Part 4 in this conversation.  This is Peter’s response to my last post.

In your question of whether we may be in a New Normal—whether corporate management of litigation through tighter budgeting and oversight has and will continue beyond the recession–prompts me to raise one of my favorite subjects:  we are naturally prone to rely on predicting future events and outcomes as the basis for decision-making and planning in the present.  I’ll get to how that ties in to our conversation shortly.

Exceptional research and writing has been done on the unreliability of prediction and forecasting, including the work of Philip Tetlock (See, e.g., “Overcoming Our Aversion to Acknowledging Our Ignorance”), and Nassim Taleb in The Black Swan.  Daniel Kahneman’s Thinking, Fast and Slow (much-revered within the dispute resolution community, myself included, integrating the hot topic of brain science) is another great example.

Despite this work, the idea still prevails that if we peer into the future we can improve our current decision-making.  The research of these behavioral scientists, and others, demonstrates, particularly when the forces are complex and fluid, that we are ill-served trying to figure out what to do on the basis of what we think will happen, since we don’t, and can’t, know.

I use this concept regularly in my mediations.  There remains among lawyers a stubborn tendency to prefer evaluative mediation—having the mediator assess the legal and factual positions of the parties and make recommendations based upon the likely outcome should the case actually go to trial (as almost none will).    Lawyers favor that because they can turn to their client and say: “Well, this is what the mediator says is likely to happen, so maybe we should reevaluate what we are willing to accept.”   This is all the more common with judges or former judges as mediators, who may well have been chosen because they are expected to essentially tell the parties what s/he thinks they should do based on what they predict will be the outcome if the dispute does not settle.

So my approach, as it is for many mediators, is to explain my view that it is considerably more helpful to the parties (to say nothing of more in line with the self-determination principles of mediation) to focus on the here and now—what do the parties really care about;  what do they need from a resolution;  what are the impediments to each getting what they need;  and how, through the mediation process, can we move beyond those impediments.

Since neither I, the parties nor their lawyers can predict what will happen—no one can—approaching a decision regarding settlement on such an assessment or forecast ignores the unforeseeable impact of the myriad intervening events and influences that produce a wholly unpredictable result.  To quote Tetlock in the above-cited article, referring to professional prognosticators: “With metronomic regularity, what is expected does not come to pass, while what isn’t, does.”  This principle guides the best mediators.  As with PEDR, however, it more often is honored in the breach.

Why is this pertinent to our conversation?  Because in my prior representation of companies regarding how obtain the best outcome, and more recently in the DR field, to discourage the “default to litigation,” they are most interested in knowing what will happen if the litigation grinds its way to conclusion, as well as the cost.  Litigators—not all, but many since that is what is expected and for which they are being paid—will fall into the Tetlock trap and make a prediction, or encourage a mediator to do so.  If the extraordinary body of research is any guide, that’s simply a flawed means of pursuing the best result.

We in the field essentially are in sync with Tetlock and colleagues, working to encourage consideration of alternatives that focus on current interests, instead of reflexively turning to litigation to read tea leaves and try to arrange those leaves to the company’s advantage.  Litigators are often esteemed for their toughness within an adversarial system that that encourages them to try to “control” the outcome, by putting the other party in an inferior tactical position when the time comes, as it inevitably will, to negotiate.  While the best litigators keep an eye out for openings to reach a favorable resolution as early as possible, they are still operating largely within the adversarial and posturing framework that they are trained and paid to pursue.

Changing the framework, or the default to litigation paradigm, through PEDR or similar concepts allows company executives to implement an approach to disputes that intentionally pursues and develops a separate track that assigns primary weight to the business-oriented “here and now,” not to what might happen, as described above with respect to parties in mediation:  What does the company really care about and want to accomplish for the business?  What can we determine is true about that question for the other side(s)?  What are the impediments that stand in the way of using the dispute as a vehicle to accomplish those needs and objectives?  And, by what means and processes can we most effectively move beyond those impediments, without risk to the litigation position if that fallback becomes necessary?

I am repeating myself from prior posts.  The point is different here, which has to do with the quality and effectiveness of decision-making and planning informed by the research cited above.  When you reflexively turn to a litigation process that is by its nature unpredictable and elevates positions over interests and value-creation, company leaders are removed from the opportunity to fashion solutions and pursue decisions that spotlight the all-important here and now—what the business really needs and how best to get there.

Back to the question of how, or even whether, we can SUCCESs-fully encourage this kind of thinking within the current business/legal environment, whether or not that’s a New Normal.

Take a look at the first two minutes of a You Tube video of Charlie’s Rose’s interview of Daniel Kahneman when Kahneman was promoting his book.   It’s a revealing exchange in which even the likes of a Nobel laureate on decision theory despairs of positively influencing mindsets within companies:

[Kahneman]: “There is actually enormous resistance within organizations to implementing programs that would improve the rationality of their decisions [Rose, incredulously: Why?]. Well, because it creates difficulties for the leadership…. So that there is a lot of interest in ways to improve rationality…. but when it comes to implementation, enthusiasm wanes distinctly.”

The same appears to be true of PEDR and other early resolution practices.  The idea may receive a warm reception; implementation is another matter because of the imbedded, systemic interests, and, as you say, fears, we have discussed.

Change may most successfully develop one person and company at a time, until a tipping point is reached when the normative isomorphism you describe previously will allow companies to institutionalize planned early dispute resolution processes without personal risk to the implementer’s standing within the company, and despite outside litigation counsel’s prediction of grave danger, or at least tactical weakness, in doing so.

One initiative underway to accomplish this is the ABA Early Dispute Resolution Task Force (on which I serve), which is the current iteration of the PEDR Task Force you chaired that published the PEDR User Guide found on the DR Section webpage.  The new Task Force is in the process of conducting of survey of corporate counsel to engage those who are willing to describe their views of and experiences with early dispute resolution, either instead of or in parallel to litigation.  A prime objective is to develop case studies that demonstrate the value of breaking out of the “prison of fear” in order to seek and create value and a business-oriented resolution of the dispute through positive engagement with the opposite party, rather than by trying to wear down and out-flank the opposition.

That may be the kind of work over the long term that could help establish a new normative standard–a New Normal!  That’s (heaven forbid) not a prediction.   Rather it is an effort to chart our way through the kind of resistance that Kahneman speaks of regarding his own message backed by years of Nobel-winning research.

To summarize:  Prediction is hazardous, especially about the future. (It’s tempting to credit Yogi, but Google tells me it originates as a Danish proverb.)  The hazards pertain both systemically and to a single dispute.  We should be encouraging companies to work more productively toward optimal, less expensive outcomes by elevating business needs on all sides of the dispute, and implementing processes that are designed to overcome the barriers that stand in the way of accomplishing those needs.  As that approach gains traction and advances toward the norm–which requires that it be done well in order to spread–resistance should diminish as the actual and potential users if PEDR see clear evidence of SUCCESs and don’t feel like they are in a risky minority.

People resist the idea that they don’t know that they don’t know (more so corporate managers?)—even when someone like Tetlock or Kahneman proves it through years of research.  Consequently, does advocacy of PEDR or other early approaches suffer from being too critical of, or even cynical about, the shortcomings and “unknowns” of litigation, such that businesspeople turn off, thinking they are being sold something that sounds too off-beat or, as I have said several times, risky?  I wonder, because the concepts are generally well received.  At the threshold of implementation, “enthusiasm wanes distinctly.”   Is that an insuperable barrier to widespread adoption?  How can we hone the message and methods of dissemination to proceed with less resistance from well-regarded concept to consistent implementation, even one-by-one?

This question may be just more of the same from prior posts.   So perhaps the better question is what further groundwork might be done within the field, and what new ideas might be developed to stir up change, to where companies recognize, and act as though, they are missing, to their competitive disadvantage, real business opportunities if they don’t?

Click here for the next part of the conversation.