Firms Use More Alternate Dispute Resolution To Cut Costs

NU Online News Service, June 3, 9:55 a.m. EDT

An alternate dispute resolution firm said the tough economic times are a major factor in a surge of new business it is seeing as companies look to save money on litigation costs.

Chicago-based ADR Systems, which describes its self as Illinois' largest dispute resolution firm, said it has seen an 80 percent rise in its commercial cases over the past two years.

The company said in reaction it has launched a full-service commercial division at a new location in Chicago in close proximity to the attorneys and companies who would be using these services.

In addition to a need to control costs, the company said it is seeing an increase because firms prefer to keep business matters private, as well as the desire to exert some control over the settlement process.

ADR systems said it has also seen a big increase in pre-suit ADR, parties going into arbitration or mediation even before filing a lawsuit.

The company said it has named Jennifer W. Morrow as executive director of its newly launched Commercial Services Division. ADR founder and Chief Executive Officer Marc Becker continues to lead the company and manage its active Tort Division.

The new unit, ADR Systems, is focused solely on the needs of commercial litigators and their clients.

"ADR Systems' commercial business grew more than 80 percent between 2007 and 2009," said Ms. Morrow. "Lawyers and their corporate clients in Chicago, throughout Illinois and the Midwest, are becoming increasingly aware of the value of mediation and arbitration and of the many ways that alternative dispute resolution can achieve a timely outcome of even the most complex business disputes."

Ms. Morrow said her firm deals with contract and insurance coverage matters, employment and class-action disputes and "all other issues that arise in the commercial setting."

ADR Systems noted that there has been a marked increase in the number of cases coming to its Commercial Services Division where the attorneys have agreed to mediate the dispute even before filing suit.

The firm explained that in mediation and arbitration, counsel and their clients have more control starting with the selection of the mediator, the design of the process, and in mediation, the terms of the final agreement.

In mediation, the mediator facilitates the communication and negotiations among the lawyers and their clients. All parties actively participate in the process, and must agree on the final resolution, in order for it to become a binding agreement, ADR said.

The company said its 20 mediators, many of whom are retired judges, are known as "neutrals" in the alternative dispute resolution process. The company said it is actively recruiting more mediators for its staff.

"We seek neutrals that are willing to work together as a team in setting the bar for ADR practice professionalism, creativity and expertise." Ms. Morrow said. "As more businesses become educated about the ADR process and its benefits, we expect our need for these highly skilled neutrals will double or triple again."

In addition to working at a resolution, Ms. Morrow said the neutrals "provide feedback to parties and their lawyers about their legal options, and how the parties' ability to control their settlement outcomes will diminish as they proceed to litigation and trial."

Under Circuit Court Rule 20, Law Division courts in Cook County have transferred 1,244 cases into mediation since April 2004, and Chancery Division courts under Rule 21 have transferred 344 cases into mediation since January 2007, according to ADR Systems.