Alternate Dispute Resolution

Litigation has unfortunately become a routine part of life – both corporate and personal – in today’s society. However, a trend has emerged to resolve litigious, often complex and highly charged legal disputes without going to court.

Known as alternative dispute resolution (ADR), this process has advantages for corporate, family law and other types of matters.

We invite you to listen to this podcast in which Fox Partners Vincent J. Poppiti and Leslie B. Spoltore (a Delaware Trial Practice blog author) discuss the many benefits of ADR.

You can also download the transcript if you prefer. We hope that you find it to be a valuable discussion.

By Order dated June 17, 2015, and in accordance with Section 5804(a) of the Delaware Rapid Arbitration Act, the Delaware Supreme Court adopted Rules to govern arbitrations conducted pursuant to that Act.  The Rules, which may be viewed here, become effective on June 22, 2015.

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Leslie Spoltore is a Partner with the law firm Fox Rothschild LLP.  Leslie practices in Fox Rothschild’s Wilmington, Delaware office.  You can reach Leslie at (302) 622-4203, or lspoltore@foxrothschild.com.

More and more divorcing couples are electing to engage in mediation outside of the courthouse in an effort to amicably resolve issues of property division and alimony. This option is often appealing because it can be a faster, more cost effective path to resolving a case. In addition, an amicable resolution can benefit the entire family by avoiding the stress associated with contested litigation. In order to make the most of mediation, the following tips can be helpful:


1) Be prepared. Before you sit down with the mediator make sure you have done your due diligence. Gather the documentation you may need and organize the information so that you can find it easily during the mediation. As you review your information, consider whether you need advice and from whom. For example, if you have questions about how to handle a tax issue speak with a CPA or tax attorney in advance.

2) Have a game plan. Consider what you want to and realistically can accomplish during the mediation. For example, at your initial meeting with the mediator the goal may be to identify and value all the marital assets and debts. Whatever your game plan, mediation will be more efficient and effective if you have taken some time to think through what you hope to achieve in advance.

3) Prioritize. As the Rolling Stones have long said, “You can’t always get what you want, But if you try sometimes well you might find, You get what you need.” An agreement often involves give and take by both parties. So, prioritize what is important to you.

4) Be flexible. There is no “one size fits all” solution. Keeping an open mind in mediation can allow for creative solutions that fit your specific situation and allow you to get what you need.

5) Be honest. Efforts to settle a case, such as discussions during mediation, are confidential and cannot be used as evidence in court. Mediation is, therefore, an opportunity for candid (respectful) discussion of the issues with an eye toward reaching a resolution. If both parties are not open and honest, resolution is more likely to be elusive.

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Leslie Spoltore is a Partner with the law firm Fox Rothschild LLP. Leslie practices in Fox Rothschild’s Wilmington, Delaware office. You can reach Leslie at (302) 622-4203, or lspoltore@foxrothschild.com.

In the matter of SPX Corporation v. Garda USA, Inc. et al., Del. Supr., No. 332, 2013 (June 16, 2014), the Delaware Supreme Court was asked to consider the circumstances under which an order entered by an arbitrator may be vacated based on allegations that the arbitrator manifestly disregarded the law.  Pursuant to Section 5714(a) (3) of the Delaware Arbitration Act “[t]he Court shall vacate an award where . . .[t]he arbitrators exceeded their powers, or so imperfectly executed them that a final and definite award upon the subject matter submitted was not made.”  Id. at 9.  After examining Section 5714, the Court concluded that “[t]o vacate an arbitration award based on ‘manifest disregard of the law,’ a court must find that the arbitrator consciously chose to ignore a legal principle, or contract term, that is so clear that it is not subject to reasonable debate.”  Id. at 2.  The decision may be read in its entirety here.

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Leslie Spoltore is an attorney with the law firm Fox Rothschild LLP. Leslie practices in Fox Rothschild’s Wilmington, Delaware office. You can reach Leslie at (302) 622-4203, or lspoltore@foxrothschild.com.

Alternative dispute resolution may take many forms.  Typically, litigants and lawyers alike think of mediation and arbitration when they think of alternative dispute resolution (“ADR”).  However, these are not the only forms of ADR.  Though not utilized in Delaware, collaborative law has become popular in other jurisdictions.  

The American Bar Association (“ABA”) describes collaborative law as follows:

Collaborative Law: Each person retains his or her own trained collaborative lawyer to advise and assist in negotiating an agreement on all issues. All negotiations take place in “four-way” settlement meetings that both clients and both lawyers attend. The lawyers cannot go to court or threaten to go to court. Settlement is the only agenda. If either client goes to court, both collaborative lawyers are disqualified from further participation. Each client has built-in legal advice and advocacy during negotiations, and each lawyer’s job includes guiding the client toward reasonable resolutions. The legal advice is an integral part of the process, but all the decisions are made by the clients. The lawyers generally prepare and process all papers required for the divorce.

Like other more traditional methods of ADR, collaborative law presents an alternative to the adversarial legal process.  The ABA has outlined a number of ways that the processes are different:

~ In Collaborative law, all participate in an open, honest exchange of information. Neither party takes advantage of the miscalculations or mistakes of the others, but instead identifies and corrects them.

~ In Collaborative law, both parties insulate their children from their disputes and, should custody be an issue, they avoid the professional custody evaluation process.

~ Both parties in collaborative law use joint accountants, mental health consultants, appraisers, and other consultants, instead of adversarial experts.

~ In collaborative law, a respectful, creative effort to meet the legitimate needs of both spouses replaces tactical bargaining backed by threats of litigation.

~ In collaborative law, the lawyers must guide the process to settlement or withdraw from further participation, unlike adversarial lawyers, who remain involved whether the case settles or is tried.

~ In collaborative law, there is parity of payment to each lawyers so that neither party’s representation is disadvantaged vis-a-vis the other by lack of funds, a frequent problem in adversarial litigation.

The collaborative law approach is not for everyone to be sure.  Proponents of collaborative law advance it as a cost effective, and more positive way to resolve what can be a costly and tumultuous legal process.  Detractors criticize the process as more costly and lengthy, because if it fails the parties must retain new counsel and experts for trial.  For those interested, additional information on the collaborative law process can be found on the ABA web page here.

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Leslie Spoltore is an attorney with the law firm Fox Rothschild LLP.  Leslie practices in Fox Rothschild’s Wilmington, Delaware office.  You can reach Leslie at (302) 622-4203, or lspoltore@foxrothschild.com. 

As anyone who has been involved in commercial litigation can attest, a great deal of energy and time can become focused on and consumed by electronic discovery (“e-discovery”).  In addition, the personal resources expended in connection with e-discovery, and the cost of e-discovery, can be staggering.  Vincent J. Poppiti, a Partner in our Wilmington, Delaware office, illustrated the scope and cost of e-discovery in his recent blog post entitled “Mediation Tip – Reason To Mediate,” noting:

In a survey conducted by the Duke Law School for presentation to the Committee on Rules of Practice and Procedure of the Judicial Conference of the United States May 10-11, 2010, where 20 percent of the Fortune 200 companies representing a broad cross-section of industries responded, a key survey finding was that, “The ratio of pages discovered to pages entered as exhibits is as high as 1000/1. In 2008, on average, 4,980,441 pages of documents were produced in discovery in major cases that went to trial – but only 4,772 exhibit pages actually were marked….the average company paid average discovery costs per case of $621,880 to $2,993,567.

A new option has emerged that may provide some relief for parties who are willing to work together to resolve the potential multitude of electronic discovery issues in a more collaborative and cost effective way – remote mediation.  Unlike traditional mediation where the parties are required to meet with the mediator in one location, remote mediation allows the mediator and the participants to remain in their respective offices while they discuss and work through their e-discovery issues.  To this end, the mediation participants utilize desktop video teleconferencing for their meeting, saving the parties the cost associated with traveling to a single location.  Additional information on remote mediation is available here.

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Leslie Spoltore is an attorney with the law firm Fox Rothschild LLP.  Leslie practices in Fox Rothschild’s Wilmington, Delaware office.  You can reach Leslie at (302) 622-4203, or lspoltore@foxrothschild.com.

As previously reported, the Superior Court amended its Rules regarding Alternative Dispute Resolution. With this change, Rule 16 has been amended to add Rules 134-139 (a link to Rules 134-139 can be found here). Rules 134-136 address mediation (see previous post regarding Rules 134-136 here) and 137-139 deal with arbitration. Below is a brief summary of Rules 137-139 concerning arbitration:

Rule 137: Arbitration

Superior Court arbitrations are limited to business disputes. In addition to a definition section, Rule 137 provides a $100,000 minimum for business disputes to qualify for Superior Court arbitration. Notably, Rule 137 defines arbitration as “the voluntary submission of a dispute to an Arbitrator for final and binding determination.” This is a departure from the previous versions of the Rule which did not default as binding, but allowed the parties to stipulate to allow the arbitration to be binding.

Rule 138: Commencement of Arbitration 

Superior Court arbitration is commenced by petition, which shall be considered confidential and not part of the public record. The petition must contain,

[A] statement setting forth the nature of the dispute, the names and addresses of all other parties, the claims and the remedy sought. The petition must also contain a statement that all parties have consented to arbitration by agreement or stipulation, that the Superior Court would have subject matter jurisdiction to adjudicate the business dispute, that at least one party is a business entity, that at least one party is a business entity formed or organized under the laws of Delaware or having its principle place of business in Delaware, or the business dispute is governed by Delaware law, and that no party is a consumer with respect to the dispute. In the case of business disputes involving solely a claim for monetary damages, the petition must contain a statement of the amount in controversy.

Upon receipt of a petition filed pursuant to Rule 138, the Court will appoint an arbitrator who will schedule a preliminary conference and preliminary hearing. Arbitrations will generally occur within 90 days from filing the petition. Rule 138 allows the parties and the arbitrator to determine the appropriate scope of pre-hearing exchange of information.

Rule 139: Arbitration Hearing

Delaware Counsel along with a party representative must attend the arbitration. All materials and communication associated with the arbitration are considered confidential. With the exception of bad faith, the arbitrator will be immune from civil liability from any act or omission done in connection with the arbitration.

Rule 139 grants the arbitrator the authority to enter the following relief:

(1) Award. The Arbitrator may grant any remedy or relief that the Arbitrator deems just and equitable and within the scope of any applicable agreement of the parties.

(2) In addition to a final award, the Arbitrator may make other decisions, including interim, interlocutory, or partial rulings, orders and awards.

(3) Upon the granting of a final award, a final judgment or decree shall be entered in conformity therewith and be enforced as any other judgment or decree.

(4) The Arbitrator is ineligible to adjudicate any subsequent litigation arising from the issues identified in the petition.

Finally, the parties may agree at any stage of the arbitration to seek the assistance of the arbitrator in reaching a settlement or submit the dispute to the Court for mediation (see previous post regarding Superior Court mediation here).

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Seth Niederman is an attorney with the law firm Fox Rothschild LLP. Seth practices in Fox Rothschild’s Wilmington, Delaware office. You can reach Seth at 302 622 4238, or sniederman@foxrothschild.com.

The Superior Court has again amended its Rules regarding Alternative Dispute Resolution (see previous amendment here).  With this change, Rule 16 has been amended to add Rules 134-139 (a link to Rules 134-139 can be found here).  Rules 134–136 address mediation in the Superior Court and 137-139 deal with arbitration.  Below is a brief summary of Rules 134-136 concerning mediation:

Rule 134: Scope of Rules for Mediation

In addition to a definition section, Rule 134 states the qualifications for mediation.  Specifically, the Rules apply to ‘business disputes’.  In addition, for disputes involving solely a claim for monetary damages, the Rule provide a $100,000 minimum in order to qualify for mediation.  Finally, Rule 134 allows the parties, with the consent of the Mediator, to change of the mediation Rules by agreement.

Rule 135: Commencement of Mediation

Mediation is commenced by petition, which shall be considered confidential and not part of the public record.  The petition shall identify the issues to be mediated and state that the parties have consented to mediation by agreement or stipulation.  Further, the petition shall state that the Superior Court would have subject matter jurisdiction to adjudicate the business dispute and that at least one party is a Delaware business entity or that the business dispute is governed by Delaware law.  Further, for matters involving solely a claim for monetary damages, the petition must contain a statement of the amount in controversy.

Upon receipt of the petition, the Court will appoint a Mediator, who will schedule a mediation conference within 60 days.  Although the Rule does not provide for formal discovery, the Mediator may request parties to produce documents necessary to understand the dispute of facilitate settlement.

Rule 136: Mediation Conference

Delaware counsel along with a party representative must attend the mediation conference.  All materials and communication associated with the mediation will be considered confidential.  With the exception of bad faith, the Mediator will be immune from civil liability from any act or omission done in connection with the mediation.

If the parties are able to resolve the matter, a written agreement stating the terms of settlement will be prepared and signed by the parties and the Mediator.

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Seth Niederman is an attorney with the law firm Fox Rothschild LLP. Seth practices in Fox Rothschild’s Wilmington, Delaware office. You can reach Seth at 302 622 4238, or sniederman@foxrothschild.com.