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Rundle, Olivia --- "Are we here to resolve our problem or just to reach a financial settlement? -" [2017] PrecedentAULA 42; (2017) 141 Precedent 12

ARE WE HERE TO RESOLVE OUR PROBLEM OR JUST TO REACH A FINANCIAL SETTLEMENT?

By Dr Olivia Rundle

In every dispute resolution (DR) process the parties will find a balance along a spectrum from “it’s only about the money and settlement” to “we can manage our conflict much more broadly than a narrow focus on the past events related to this dispute.” There is a tension between these two extremes. In 2005, Baruch Bush and Folger reflected upon this tension, which they had expressed in their first edition of The Promise of Mediation:

‘In our view, the potential that mediation offered to foster and support positive human interaction within conflict was being squandered. Instead mediation was being used to shore up institutional processes that operate to control, contain, and settle conflict, because of a prevailing view that conflict interaction is a fundamentally negative social force’.^[1]

On the one hand, the ability of dispute resolution (DR) processes other than formal trial to support people to resolve their differences in a holistic way is touted as a desirable attribute. On the other hand, within legal contexts, the purpose of DR processes is understood by many to be settling disputes quickly and cheaply, keeping them out of the formal trial process. There is a tension between those who advocate that one or other of these purposes is the ‘true’ purpose of DR processes. Strong opinions towards a settlement focus are particularly common within the context of formal justice systems and whenever lawyers are involved. In the court-connected context, the focus of DR is often the ending of a litigation process and avoiding further legal costs, as distinct from resolving a shared problem. Lawyers tend to focus upon settlement within the boundaries of what would be legally appropriate as the purpose of DR.^[2]

This article revisits some of the promises of DR, to explain the imaginative potential that motivates those who champion the resolution-focused end of the spectrum. It then considers whether and how the context of the formal justice system shapes DR – including expectations about its proper purpose. The question of what parties want from DR is considered. The ways lawyers shape DR when they are involved in it is examined. Attention then turns to the reasons why a predominant focus upon the settlement purpose of DR may be appropriate and desirable. Conversely, the drawbacks of an over-emphasis on settlement to the detriment of other opportunities are considered. The conclusion from this discussion is that ultimately a broad resolution-focused approach may be maintained even within the context of the formal justice system; parties ought to decide what purposes they would like to pursue through their DR process; and lawyers ought to ensure that they are supporting their clients to make well-informed decisions about the optimal way to approach DR.

THE PROMISE OF DR

The foundations of the modern DR field were built on the multi-disciplinary pursuits of individualism, relationship, and peace-building. The promise was that DR would offer an alternative to existing processes that would free people in dispute from the confines of oppositional adversarialism, an exclusive legal lens, and untempered power imbalance. DR emerged from dissatisfaction with existing processes, promises about what new approaches offered, and changing attitudes towards conflict.^[3]

Hence the term ‘alternative’ dispute resolution (ADR) – being an alternative to trial or unassisted negotiation (which is typically conducted in an adversarial settlement style). Today, many in the field prefer to drop the ‘alternative’ tag, on the grounds that it misrepresents the central place that DR processes play in the life of disputes and justice systems.^[4] Others argue just as ardently that the ‘alternative’ should stay, as a marker of history and because it distinguishes DR processes from the formal judicial system.^[5] The promise of DR as an holistic and tailored approach to conflict and disputing is something that is universally acknowledged as at least a possibility.

DR IN THE CONTEXT OF THE FORMAL JUSTICE SYSTEM

The biggest growth area of DR has been within institutional contexts, particularly government and the justice system. Inevitably, when DR has been adopted by institutions, it has been adapted accordingly:

‘True to ADR’s essential characteristics of innovation, creativity and experimentation, ADR in the courts involves continuing adaptation and evolution of ADR processes. But as governments, tribunals, and courts borrow, co-opt and adapt ADR methods, an ironic shift becomes apparent. Control over the dispute resolution processes moves to the institution. ...In short, rather than be designed to meet the specific needs and exigencies of the parties to the particular dispute, ADR techniques are adapted to fit the goals of the institution or system.’^[6]

Typically, the reason institutions introduce DR is to settle disputes quickly and at minimal cost. Within court systems, DR has been adopted as a way to solve problems of delay and inaccessibility – effectively shifting disputes out of formal litigation processes and supporting parties to negotiate an outcome earlier than they otherwise would.^[7] The purpose of settlement is very much prioritised where these are the bases upon which a DR system has been established.

Where DR is court-connected, because it occurs within the context of a litigated matter, there are obvious reasons why the focus of the process tends to be upon the facts of past events, the legal issues between the parties, and the assessment of potential outcomes against the anticipated judicial view. Where trial or abandonment are the likely alternatives to a negotiated outcome, parties will naturally consider their options against those possibilities. Lawyers are more likely to be involved in court-connected DR processes and they will bring their professional legal lens to the process and dispute. Law and legal rights tend to dominate court-connected DR.^[8]

However, there are no absolute barriers to a broad, relationship-focused, adaptable, holistic approach to the parties’ disagreement being taken within court-connected DR. There are no legislative definitions of DR, guidelines or rules that limit court-connected DR to a settlement and/or law-oriented focus on the dispute. Rather, there has been a trend for court-connected DR to be defined in generic terms that can potentially incorporate a wide range of DR practices.

WHAT PARTIES WANT FROM DR

The Productivity Commission’s latest report about access to justice noted that there are deficiencies in the availability, quality, and utilisation of data about the civil justice system – in particular, the experiences of, effects on and costs incurred by end users.^[9] The LAW Survey has provided some data at a population level.^[10] Data is often gathered from lawyers and institutional parties rather than directly from individual end users of DR, generally because of the ease with which data can be gathered from ‘repeat players’ compared with individual one-off parties.^[11] Research conducted within service provider organisations, often in the form of client feedback surveys, presumably provides data about party expectations. However, these are rarely published publicly.

From the limited evidence available, we know that parties often want to explore a broader range of issues in DR than their lawyers think they do.^[12] For example, Tamara Relis’s research involving medical malpractice claims demonstrated that although the lawyers for all parties thought that the dispute was mostly about money, and one-third of plaintiff lawyers thought their clients only wanted money, plaintiffs reported wanting to explore a much broader range of matters in the DR process.^[13] Research has also revealed that parties’ experiences of process are strongly aligned with their satisfaction, whereas lawyers tend to evaluate DR according to whether or not a settlement was reached.^[14]

HOW LAWYERS INFLUENCE WHAT PARTIES WANT AND WHAT THEY CAN GET FROM DR

Lawyers have significant influence in shaping their clients’ expectations about DR processes, the way that the process is conducted, the subject matter discussed, and the outcomes achieved.^[15] Lawyers actively encourage their clients to reach sensible settlements, inevitably assessed according to the lawyer’s view of what is reasonable. The potentially broad scope of outcomes that could be achieved through DR may be limited by lawyers’ views that the appropriate scope of DR is narrow and focused upon likely legal outcomes weighed against financial costs and risks.^[16] Lawyers modify their clients’ expectations about what DR is, what role they should play in it, how the negotiation should be approached, and what could be achieved.^[17] There is scope for greater research into the reasons for the widely recognised narrowing of DR by legal service providers. Some contributory factors include lawyers’ professional identity,^[18] interpretation of their ethical duties,^[19] personality,^[20] and legal training.^[21]

WHY SETTLEMENT IS DESIRABLE AND APPROPRIATE

Settlement undoubtedly has many attractions for disputing parties. It means that negotiations about the dispute can cease and the parties can spend their time, money and emotional energy on other things. Where the settlement involves payment from one party to another, both are able to move into the future with certainty about their financial situation. Where litigation has commenced, the settlement will also signal the end of the parties’ involvement with the formal justice system about their dispute. Ultimately, these benefits of settlement are desirable.

Furthermore, for many parties, the quantum of settlement payment is their primary concern about the dispute. Therefore, the negotiations may be focused upon monetary quantum and conducted in a distributive manner – where the limited pie is divided through a series of offers and counter-offers. Where one of the parties to a negotiation is an insurer or organisation with whom the individual party has no ongoing relationship, it is arguable that there is little prospect of the broader promises of DR to be explored through the process of resolving the immediate dispute.

Even where other styles of negotiation are adopted, whereby the parties expand the pie by identifying scope for negotiation about payment manner or timing, or explore one another’s interests to see if creative opportunities can be found, ultimately, the negotiation at some point will focus upon the quantum to be paid by one party to another. Settlement, whether on simple or complex terms, is the ultimate shared goal between the parties.

THE DRAWBACKS OF A SETTLEMENT FOCUS

There are, however, drawbacks to an over-emphasis on settlement. The potential for creative and imaginative exploration of resolution possibilities is hindered by a preoccupation with settlement of the immediate dispute (particularly where the focus is the immediate dispute as defined by the pleadings). Distributive bargaining locks parties into an assumption that their options for resolution are limited. The chances of impasse are higher than where a more curious and flexible approach is taken to the negotiation.

One of the greatest lost opportunities of a settlement focus in DR is that the possibility that the parties will achieve relational benefits of DR is very low. The promise of DR includes the ability for people in conflict to come to a better understanding of the conflict dynamics to which they have contributed, of the perspective of the other parties to the dispute, and of ways in which their relationships may be conducted in the future to avoid similar disputes remaining unresolved. A relational approach is appropriate in family law, workplace conflict (including compensation claims), commercial matters related to business dealings, estate matters, and all other disputes between parties who have a past, present or future relationship of some kind.

Even where parties do not have a relationship, there may be benefits that could be derived by taking an approach to DR that is broader than a monetary settlement focus. The parties in dispute may not have a relationship in personal injuries matters where an insurer manages the claim-making, in one-off consumer complaints, or discrimination claims made outside of personal relationship contexts. In all of these kinds of dispute, there is a human element to the conflict. The claimant may benefit greatly from the opportunity to tell their story of loss, to receive an explanation or apology, and to learn about changes that have been made to avoid harm to others in the future. It may be appropriate in some circumstances for the outcome of the DR process to include some kind of public statement about the resolution that has been reached.

CONCLUSION

The title of this article asks “Are we here to resolve our problem or just to reach a financial settlement?” and the answer is “It depends.” The context of legal services or litigation does not preclude parties from deciding to pursue much broader outcomes than ‘settlement on terms mildly disagreeable to both parties’. The parties whose dispute is being managed should be put in a position to choose the scope of their DR process. For some, a narrow, predominantly money focus will be appropriate. For many, the DR process presents an opportunity to explore their conflict with the other party and achieve a range of potential benefits in process, content and outcome. Lawyers who understand the promise of DR and the different ways that it might be practised are best placed to support their clients to capture the full remedial imagination of the field. Although there are some limitations to the data available about party preferences, there is sufficient evidence of disconnect between what clients and their lawyers expect and want from DR processes. That evidence should provide food for thought for lawyers to ensure that they are serving their clients optimally in relation to the resolution and/or settlement of their disputes.

Dr Olivia Rundle is a Senior Lecturer in Law at the University of Tasmania. EMAIL Olivia.Rundle@utas.edu.au.

The author thanks the members of the Australian Dispute Resolution Network, whose scholarly engagement in traditional ways and through social media enhances and furthers my thinking about lawyers, dispute resolution and civil justice (adrresearch.net and @ADRResearch).

^[1] Robert A Baruch Bush & Joseph P Folger, The Promise of Mediation: The Transformative Approach to Conflict (Revised ed, 2005, Jossey Bass), 1.

^[2] Olivia Rundle, ‘Lawyers’ perspectives on “what is court-connected mediation for?”’ (2013) 20(1) International Journal of the Legal Profession 33.

^[3] Carrie Menkel-Meadow, 'Why Hasn't the World Gotten to Yes? An Appreciation and Some Reflections' (2006) Negotiation Journal 485.

^[4] Laurence Boulle and Rachael Field, Australian Dispute Resolution Law and Practice (2016, LexisNexis).

^[5] Tania Sourdin, Alternative Dispute Resolution (5^th ed, 2016, Thomson Reuters).

^[6] Margaret A Shone, 'Law Reform and ADR: Pulling Strands in the Civil Justice Web' (Paper presented at the Australasian Law Reform Agencies Conference, Wellington, New Zealand, April 13-16 2004) 6.

^[7] The Hon Justice James Spigelman, ‘Just, Quick and Cheap – A Standard of Civil Justice’ (Paper presented at Opening of Law Term, Parliament House, Sydney, 31 January 2000); Nancy A Welsh and Peter T Coleman, ‘Institutionalised Conflict Resolution: Have We Come to Expect Too Little?’ (2002) 18 (4) Negotiation Journal 345; Kathy Mack, Court Referral to ADR: Criteria and Research (National ADR Advisory Council and Australian Institute of Judicial Administration, 2003) 17. Kathy Mack noted that courts have rarely articulated why they introduced DR. Nadja Alexander, 'Mediation on trial: ten verdicts on court-related ADR' (2004) 22(1) Law in Context 8, 17.

^[8] Craig A McEwen and Roselle L Wissler, ‘Finding Out If It Is True: Comparing Mediation and Negotiation Through Research’ (2002) University of Missouri Journal of Dispute Resolution 131, 133; Jacqueline M. Nolan-Haley, 'Court Mediation and the Search for Justice Through Law' (1996) 74 Washington University Law Quarterly 47, 64.

^[9] Productivity Commission, Access to Justice Arrangements (Inquiry Report No. 72, 2014), Chapter 25.

^[10] Christine Coumarelos et al, Legal Australia-Wide Survey: Legal Need in Australia (Law and Justice Foundation of NSW, Volume 7, 2012) <http://www.civiljustice.info/cgi/viewcontent.cgi?article=1024 & context=access> .

^[11] Jane Elix and Tania Sourdin, Review of the Financial Industry Complaints Service 2002 – Final Report (Community Solutions, La Trobe University, University of Western Sydney, 2002) https://www.fos.org.au/custom/files/docs/fics_final_independent_review.pdf, Appendix B.

^[12] Robert A Baruch Bush and Sally Ganong Pope, ‘Transformative Mediation: New Dimensions in Practice, Theory, and Research’ (2002) 3 Pepp. Disp. Resol. L.J. 1 cited in Louise Phipps Senft and Cynthia A Savage, ‘ADR in the Courts: Progress, Problems, and Possibilities’ (2003-2004) 108 Penn St. L. Rev 327, 335.

^[13] Tamara Relis, Perceptions in Litigation and Mediation: Lawyers, Defendants, Plaintiffs and Gendered Parties (Cambridge University Press, 2009).

^[14] Carol Bartlett, ‘Mediation in the Spring Offensive’ (1993) Law Institute Journal 232; Marie Delaney and Ted Wright, Plaintiff’s Satisfaction with Dispute Resolution Processes: Trial, Arbitration, Pre-Trial Conference and Mediation (1997); Jill Howieson, 'Perceptions of Procedural Justice and Legitimacy in Local Court Mediation' (2002) 9(2) Murdoch University Electronic Journal of Law <http://www.murdoch.edu.au/elaw/issues/v9n2/howieson92_text.html> Judith Resnik, ‘Mediating Preferences: Litigant Preferences for Process and Judicial Preferences for Settlement’ (2002) Journal of Dispute Resolution 155; Brad Reich, ‘Attorney v Client: Creating a Mechanism to Address Competing Process Interests in Lawyer-Driven Mediation’ (2002) 2 Southern Illinois University Law Journal 183; Nancy Welsh, ‘Stepping Back Through the Looking Glass: Real Conversations with Real Disputants About Institutionalized Mediation and Its Value’ (2004) 38 Ohio State Journal on Dispute Resolution 573.

^[15] Lillian Corbin, Paula Baron and Judy Gutman, ‘ADR Zealots, Adjudicative Romantics and Everything in Between: Lawyers in Mediations’ [2015] UNSWLawJl 17; (2015) 38(2) UNSW Law Journal 492; Samantha Hardy and Olivia Rundle, Mediation for Lawyers (2010, CCH); Julie Macfarlane, The New Lawyer: How Settlement is Transforming the Practice of Law (2008, UBC Press).

^[16] Olivia Rundle, ‘Lawyers’ perspectives on “what is court-connected mediation for?”’ (2013) 20(1) International Journal of the Legal Profession 33.

^[17] Olivia Rundle, ‘Lawyers’ Preparation for Court-Connected Mediation: The Supreme Court of Tasmania’ (2013) 32(1) UTLR 20; Olivia Rundle, ‘Barking Dogs: Lawyer Attitudes Towards Direct Disputant Participation in Court-Connected Mediation of General Civil Cases’ (2009) 8(1) QUTLJJ 77.

^[18] Becky Batagol, ‘Fomentors of Strife, Gladiatorial Champions or Something Else Entirely? Lawyers and Family Dispute Resolution’ (2008) 8(1) QUTLJJ 24; Boulle and Field, above note 4.

^[19] Bobette Wolski, ‘On mediation, legal representatives and advocates’ [2015] UNSWLawJl 2; (2015) 38(1) UNSW Law Journal 5.

^[20] Leonard L Riskin and Nancy A Welsh, ‘Is That All There Is?:The Problem in Court-Oriented Mediation’ (2008) 15 Geo Mason L Rev 863.

^[21] Corbin et al, above note 15; Kathy Douglas, ‘The teaching of ADR in Australian law schools: Promoting non-adversarial practice in law’ (2011) 22(1) ADRJ 49; Macfarlane, above note 15.