Promoting Cost Reduction and Increased Efficiency in Resolving Civil Disputes – by John S. Kiernan

John S. Kiernan

President’s Column, May 2018

A plaintiff’s ability to pursue judicial relief for perceived civil and commercial wrongs, and a defendant’s ability to pursue vindication of the challenged conduct, is at the heart of the collective American sense of justice. But for the vast majority of disputes, the cost of obtaining a decision (in legal fees and indirect costs) is so high compared to the amount in controversy that conventional litigation to a decision is essentially unaffordable. That unaffordability presents an important access to justice issue, as both the Federal Rules of Civil Procedure and New York’s CPLR have recognized by identically reciting the central aim of achieving “just, speedy and inexpensive” resolutions of disputes. 

The unaffordability of legal representation has been receiving substantial attention in a wide variety of contexts in recent years. The National Center for State Courts has reported that two-thirds of state court litigants are unrepresented. Judicial administrators and legal services providers have addressed this pervasive non-representation by seeking to develop mechanisms for litigants facing loss of life essentials to obtain free access to counsel, and by experimenting with hotlines, limited scope representations, do-it-yourself forms and court-supplied “navigators” to help people who cannot afford counsel to protect themselves the best they can. The stark statistics about differences in success rates between represented and unrepresented litigants in some forms of disputes provide compelling reason for continuing efforts to help these disputing parties get their disputes resolved fairly.

For disputing parties who do have counsel – the primary focus of this column – court administrators and participants in the dispute resolution process have increasingly sought in recent years to think in new ways about how to achieve resolutions without having legal expenses approach, match or exceed the amount in controversy before a resolution is reached. The two ways disputes can most readily be resolved less expensively are not difficult to identify: (i) pursue approaches directed to achieving earlier negotiated or mediated  resolutions of disputes destined for settlement (as most cases are), before substantial funds that could be directed toward settlement are instead spent on legal fees, and (ii) adapt procedures for resolving disputes destined for resolution by a decision to ensure that the decision can be achieved for an amount bearing reasonable proportionality to the amount in controversy. 

Recent years have witnessed significant action in both of these areas, with mediation and ADR becoming a standard pre-litigation step in many commercial contracts’ dispute resolution clauses and an increasing number of courts’ procedural requirements, and with courts and parties actively engaged in applying concepts of proportionality, efficiency, consideration of alternatives to conventional litigation and streamlining to generate decisions affordably in a broad range of disputes. But the continuing difficulty of achieving faster and less expensive resolutions even amid broad consensus that dispute resolution generally takes too long and costs too much suggests that the evolution in thinking about optimal mechanisms for resolving civil disputes remains in its relatively early stages, and that powerful forces of accepted practice, culture, perceived need to posture and resistance to change need to be overcome to achieve the greater efficiency in dispute resolution that seems undoubtedly desirable.

Over the past few decades, contracting parties that once drafted inconsequential dispute resolution provisions have increasingly thought about how they would want to order their approaches to resolving any disputes that might arise from the contractual relationship, without undue cost to either party or damage to the underlying business relationship. That thinking has led to an increasing proliferation of agreed-upon contract provisions that proscribe filing a litigation until the parties have formally exhausted efforts to resolve the dispute without litigation – through discussions among senior representatives of the parties, mediations, establishment of expert panels to resolve factual disputes requiring expert inputs, or otherwise – and that provide for a wide range of arbitration or other ADR mechanisms for resolving more quickly than a conventional litigation would any disputes the parties decide must be resolved by a decision rather than a settlement. 

The same sensibilities that animate parties to agree to such approaches in advance of any disputes with each other could just as readily lead parties to agree to similar streamlining approaches once their disputes have begun, if not for a wide range of impediments of culture and practice that currently attach to the litigation process. Those impediments include the anger plaintiffs often feel when presenting claims and defendants often feel when accused of wrongdoing; institutional orientations (and the orientation of retained advocates) to respond to complaints adversarially rather than by reflexively looking for points of compromise; the rules and practices of courts favoring postponement of decisions on dispositive motions until the dispute has ripened through discovery (which can readily be prohibitively expensive); and a collection of widely embraced posturing convictions (including that a party should not consider settlement until after imposing some of the pain of litigation on the adversary, that delay can be useful because it lets initial anger dissipate and whets opponents’ appetites for settlement, that it is important to show others in the marketplace how unpleasant litigating against the party or the lawyer will be, and that any suggestion of streamlining the process of pursuing a decision or discussing settlement early is such a powerful indication of weakness and lack of resolve to fight that such suggestions should instinctively be avoided or opposed). 

With all these obstacles to achieving less expensive and faster resolution of disputes, is there anything constructive to be done? The evidence of evolution in approaches to both obtaining decisions and settling disputes in recent years, leading many parties and practitioners to embrace approaches almost never pursued a few decades ago, suggests strongly that the process of shaking off impediments to less expensive and faster resolutions is already under way. 

The City Bar has sought to contribute to this evolution over the past eighteen months by convening members of numerous Association committees directed to improvement of administration of justice, and many of the leading provocative thinkers about dispute resolution in New York, to participate in advising a President’s Committee on Enhancing the Efficient Resolution of Disputes (chaired by Daniel Kolb and Erin Gleason Alvarez). That Committee will soon be releasing a report including a collection of recommended Best Practices for parties, advocates, judicial administrators and courts directed to treating increased efficiency and reduced cost in resolution of disputes as an essential component of access to justice and improved administration of disputes. 

Parties, advocates and judges who proceed imaginatively and with willingness to embrace new approaches to less expensive and faster achievement of settlements and decisions may see substantial rewards in resolution of disputes with less pain and delay, and creation of economic surpluses the parties can share. The Bar and its members can play important roles in championing innovative approaches in this area for the benefit of the judicial system and the individuals and entities who find themselves in difficult disputes.

John S. Kiernan is President of the New York City Bar Association