MEDIATION AS A DISPUTE RESOLUTION TOOL

Many clients, especially business clients, come to me when faced with a crisis. A contract breach has cost time, money, and work and the situation will only worsen if the breach is not resolved. One effective method of resolving such a dispute early is for the parties to mediate the matter. Mediation can be extremely effective to resolve disputes because it can be done quickly, relatively informally, the mediator is agreed to by both sides to a dispute, and it is one of the least expensive dispute resolution procedures available. Mediation can be either simply proposed and agreed to by the parties, or may be required by contract (mediation is often required before filing suit or demanding arbitration by many contracts).

A mediator is typically agreed to by both/all parties to a dispute. The mediator is not a judge or arbiter. He/she has no authority or power to order any party to act or pay money. The mediator is there to facilitate communication between the parties; to get the parties in one office and get them talking. He/she is not there to decide who wins or loses. The mediator's primary focus is to help the parties compromise and come up with solutions that will get the parties past the dispute and back on a working and productive relationship.

Mediators are usually lawyers, and many specialize in specific areas of law/industry. For example, a mediator may specialize in construction industry law and disputes, commercial lease and real estate disputes, patent/trademark, personal injury, family law, or any number of specialties. It is an excellent idea to seek out a mediator that has expertise in the industry and type of dispute you are faced with. It is also important the mediator have been trained in dispute resolution.

Every dispute has human elements to it. People look at the same situation from more than one perspective and have different opinions. Mediation involves not just reciting facts, contract language, and right/wrong. It also involves psychology and emotion. By the time the dispute gets to a mediator, more often than not both sides are angry. This anger has to be addressed and dealt with, as it is impossible to discuss a situation and negotiate or explore solutions while feeling angry. This is why it is critical a mediator be experienced, trained in dispute resolution, and have expertise in the industry/area of law at issue.

Mediation can typically be scheduled for half-day or full-day sessions. However, every mediation is different and takes on a personality and life of its own. No two mediations are ever the same, because the disputes and people are always different. Therefore, mediations may last hours or even days. Most mediators will not quit simply because a solution can't be found the first try, or by 5:00. I have been involved in mediations that lasted well past midnight, settled with some additional telephone conferences after we adjourned the mediation, involved more than one mediation session, and involved very creative settlement terms that never would have come to fruition without the assistance of a mediator.

Mediation prior to initiation of litigation or arbitration may be a very effective way to resolve a dispute quickly and inexpensively.

E-Discovery Issues Critical for Corporate Parties in Litigation

More and more companies are discovering that litigation not only involves preserving copies of contracts, invoices, and records. It also involves extensive search, retrieval, preservation, and review of email, text messages, website data (new and archived), intermal memoranda, and independent forensic review of computer hard drives and servers. The ease and efficiency computers, email, and the internet have bestowed upon corporate performance and efficiency have also made discovery, particularly in federal court where parties may be subject to mandatory disclosure, a complex and often expensive undertaking for both sides to litigation.

Once a company is put on notice of a claim, it has a duty under current federal law to place an immediate hold on any document/information destruction processes that may impact or touch upon information in that claim. Failure to do so can result in sactions for improper handling/destruction of evidence. See the Zubulake line of cases.

The duty to preserve attaches when a party has notice that the evidence is relevant to litigation or when a party should have known that the evidence may be relevant to future litigation. Once a company reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a "litigation hold" to ensure the preservation of relevant documents. A party must preserve what it knows, or reasonably should know, is relevant in the action, is reasonably calculated to lead to the discovery of admissible evidence, is reasonably likely to be requested during discovery, and/or is the subject of a pending discovery request. This duty to preserve extends to any documents or tangible things made by individuals "likely to have discoverable information that the disclosing party may use to support its claims or defenses, and this includes documents prepared for those individuals (such as attachments to emails, documents identified in emails, etc.) Backup tapes may also have to be preserved. You should bring counsel in as quickly as possible to determine the extent materials and information must be preserved to ensure proper preservation procedures are timely implemented.

Failure to do so can and has resulted in some very serious court sanctions against offending companies:

Vacated jury verdict due to delay in producing e-data. Residential Funding v. DeGeorge Financial, 306 F.3d 99 (2nd Cir. 2002);
Adverse Inference Jury Instruction given where employee sent emails to supervisors complaining about sexual harassment and employer continued routine destruction of email, consistent with company policy, until suit was filed. Broccoli v. Echostar Communications Corp., 2005 WL 1863176 (D. Md. August 4, 2005); Negligent destruciton of e-data can give rise to adverse inference. Mastercard v. Moulton, 2004 WL 1393992 (S.D.N.Y. June 16, 2004);
Email custodian not allowed to testify at trial; Philip Morris fined $2.7 Million where Philip Morris erased email after a preservation order was issued. U.S. v. Philip Morris, No. 99-2496 (D.D.C. July 21, 2004);
$29 Million jury verdict with $20 Million in Punitive Damages for discrimination plaintiff after adverse inference instruction given regarding destruction of computer backup tapes. Zubulake v. UBS Warburg (S.D.N.Y. April 6, 2005).

LEASES ARE NOT FORMS AND SHOULD NOT BE TREATED AS "STANDARD" DOCUMENTS

I occasionally have clients request a simple "form" lease, for various purposes ranging from commercial leases to simple residence tenants. Sometimes, a standard lease that can be purchased at any office supply or book store will suffice for simple, short-term, informal situations. However, parties to a lease must understand that the document's terms will govern nearly every aspect of their business relationship; including and especially if the relationship sours. Leases should be looked at with an eye toward the future, not with a focus on the present. The two questions answered by leases are 1) what do I have to do now; and 2) what happens if [insert situation] occurs. Many disputes between landlords/tenants or lessors/lessees would not arise if the parties took a few minutes to sit down together and look at the lease when they sign it. Before signing a lease, parties should both understand the agreement, consequences if the terms can't be met, and discuss dispute resolution procedures to be utilized if the parties do not want the lease to terminate without some effort to cure the breach. It is worthwhile to invest some time and funds with a lawyer at the beginning of the relationship, rather than be faced with a crisis situation where

• a large retainer may be required to send demand letters mandated by a lease,
• evict a delinquent tenant,
• repossess equipment,
• engage in arbitration,
• or take other formal steps to enforce the lease.

And all this happening at a time when lease payments haven't been received for some period of time. Leases, like many legal documents, govern your business and specify what happens during crisis. Give these important instruments their due consideration.

WAL-MART SEEKS TO REVAMP WORKERS' SCHEDULES

Early this year, Wal-Mart will utilize computer scheduling to move workers from predictable set shifts to a system based on the number of customers in a store at a given time. This emphasizes the struggle employers face to increase profit, productivity and customer satisfaction; which must necessarily be balanced with a workforce comprised of people. Family welfare and individual needs will inherently conflict with Wal-Mart's proposed scheduling change. Employees will be faced with multiple challenges by the new system; such as scheduling childcare. Unpredictability in work schedule is extremely difficult for high-wage professionals to accommodate, let alone hourly workers dependent upon daycare.

As a consumer, I can't count the number of times I have marveled that there were only two cashiers checking for what seemed to be twenty waiting customers. I've also noticed periods where five employees were either standing idle or engaged in "busy work" during a lull in business. I have often wondered if a system could be devised that would staff precisely the right number of employees at exactly the time they were needed - like "just in time" inventory delivery, but for employees. However, when balancing productivity at this level against the ability of hourly workers to accommodate such a scheduling scheme, it will be very interesting to see how Wal-Mart's experiment fares. The jury may still be out for the moment, but the reception so far has been mixed at best.

http://blogs.wsj.com/juggle/2007/01/03/whats-worse-long-hours-or-unpredictable-hours/

http://users1.wsj.com/lmda/do/checkLogin?mg=wsj-users1&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB116779472314165646.html%3Fmod%3Dhome_whats_news_us

ARBITRATION VERSUS LITIGATION IN CONSTRUCTION DISPUTES

Whether you are an owner, general contractor, subcontractor, or supplier, chances are at some point you have been a party to a contract with an arbitration clause. These clauses are anything but boiler-plate and standard, and should be carefully reviewed. Also, many in the industry are discovering that arbitration is not all it was hoped to be. It can take longer and cost more than litigation in some cases. Whether to arbitrate or litigate is a decision that should be made with the advice of experienced legal counsel, weighing the facts and issues particular to an individual dispute.

This is not a situation where one choice is clearly and always better or preferable to the other, particularly where other dispute resolution procedures (such as mediation or collaboration) may be warranted - such as when disputes arise which could delay the project and immediate resolution is desired and necessary. Also, the specific verbage of your clause should be carefully drafted by your lawyer. It may be advantageous to draft an election to arbitration (i.e. arbitration at the request of one or both parties to the contract), rather than require it in all instances. Once a dispute arises, this clause will dictate the options available to resolve the dispute if the parties can not work it out themselves. Serious thought should be given to contract terms that will govern when crisis arises.

http://www.constructionweblinks.com/Resources/Industry_Reports__Newsletters/Dec_18_2006/arbi.html