Part Two: Preparing for the 2011 Fortune 1,000 Survey of Corporate Counsel

The following  is  part 2 of a 5 part overview of Professors Thomas Stipanowich (Pepperdine University School of Law) and J. Ryan Lamare (Pennsylvania State University)  paper entitled “Living with ‘ADR’: Evolving Perceptions and Use of Mediation, Arbitration and Conflict Management in Fortune 1,000 Corporations.”  For a brief history of ADR and corporate perception see Part 1.

Part Two: Preparing for the 2011 Fortune 1,000 Survey of Corporate Counsel

As alternative dispute resolution quietly integrated into conflict resolution practices previously dominated by litigation, new obstacles emerged. After experimenting with both arbitration and mediation, results were mixed.

By the 1990s mediation’s acceptance had grown. Many commercial contracts had dispute resolution clauses with mediation being an agreed upon approach before preceding to arbitration or litigation. Stipanowich and Lamare write that the reduction in the incidence of court trial was due to the increase in the use of mediation to resolve disputes. Though these changes were important for ADR, issues arose such as the affect of lawyer-mediators on the process.  Excessive use of the adversarial method in mediation settings was concerning as well as resolutions that only focused on monetary goals.

Arbitration had also seen changes in use. Court decisions on the Federal Arbitration Act had promoted the use of arbitration, though elements of trial had begun to impact positive aspects of the arbitration process such as efficiency and cost. Stipanowich and Lamare write about a 2011 Rand Institute for Civil Justice Report on business to business arbitration showing respondents, “…identified four factors favoring a choice of arbitration: the avoidance of ‘excessive or emotionally driven jury awards,’ the ability to choose arbitrators with particular qualifications, the relative confidentiality of arbitration, and the relative ability of arbitrators to cope with complex contractual issues.” They also noted the report’s results on respondents attitudes towards pre-dispute arbitration clauses in commercial contracts: 44% were encouraged, and 36% were discouraged to use such clauses.

In the years since the 1997 Fortune 1,000 survey, binding arbitration had become a controversial topic in ADR. Included in individual employment  and consumer contracts, binding arbitration had drawn much attention and debate over procedural fairness and assent.

As alternative dispute resolution encouraged alternatives to litigation, so did it open the door to integrative and systematic approaches to solving conflict in the workplace. Early case assessment had developed to align business goals with appropriate conflict management and resolution methods. Stipanowich and Lamare cite a 2003 follow-up survey to the 1997 Fortune 1,000 survey that found, “…a relatively small percentage of big companies had a policy of contending most claims and controversies, rigorously employing litigation (or the thread of litigation).” It was clear that businesses committed to using ADR still were more inclined to use reactive litigation.

Though attitudes may have changed since the 1997 Fortune 1,000 corporate counsel survey, systems seem to have remained ingrained in business culture which has prevented an overall acceptance of ADR processes. In order to reveal the impact of these changing uses and perceptions of mediation, arbitration, and conflict management processes, the 2011 Fortune 1,000 survey was conducted. In Part 3 of this overview of Stipanowich and Lamare’s paper, survey questions will be covered to elucidate the evolving perceptions of ADR.