Research on Fortune 1000 Companies’ use of Alternative Dispute Resolution

Andrea Dickens,

Recently, we have seen an increasing interest in resolving disputes through alternative dispute resolution (ADR) in New Zealand and around the world. This trend has become more important as we see growing congestion and delays in court proceedings.

The survey of Fortune 1000 in-house lawyers reveals an important evolution in corporate sector practices in dispute resolution. A dwindling few major corporations continue to embrace litigation as a broad policy, while many more are increasing their emphasis on alternatives.

Nearly all companies have recent experience with mediation, which is now used more extensively across the broad swath of civil conflict and the great majority of companies foresee its use in the future. Mediation’s success has contributed to the marked fall-off in the use of binding arbitration.

Today, there are also many companies using approaches focused on more strategic management of conflict, in a manner more reflective of business priorities. These include targeted early neutral evaluations that promote settlement or more effective case management, early case assessment, and integrated systems for managing workplace conflict. Such approaches represent a significant step beyond reactive and reflexive advocacy.

On the other hand, there is reason to believe that many companies continue to employ ad hoc approaches in some or all kinds of conflict, and devote little time deliberating on the choices they make with regard to dispute resolution, both at the time of contracting and after disputes arise.

Evidence suggests that business mediation is dominated by a single ‘legal’ model with a relatively narrow, litigation-oriented focus. There are also indications that many corporate counsel worry that arbitration is not enough like litigation to be a suitable substitute, while at the same time there are growing concerns that it has become too much like litigation.

The evenly divided opinions of corporate counsel regarding the future use of arbitration appear to reflect an underlying divide in perceptions about how to get what they want out of adjudication. Differing perspectives are also evident in the realms of employment and consumer disputes, signalling varied practices in these critical areas in the coming years.

The present survey, like its predecessor, presents a useful backdrop for more focused inquiries aimed at discrete conflict settings. Insights from research may underpin the further evolution of even more effective approaches in conflict management.

(Harvard Negotiation Law Review – Multidisciplinary Journal on Dispute Resolution Vol 19 Spring 2014 – Living with ADR: Evolving Perceptions and Use of Mediation, Arbitration, and Conflict Management in Fortune 1000 Corporations. Thomas J. Stipanowich and J. Ryan Lamare)