Originially from: World Arbitration and Mediation Review (WAMR)

SETTING UP AN IN-HOUSE DISPUTE MANAGEMENT
PROGRAM
By John J. Welsh, General Counsel for Judicial Arbitration & Mediation
Services in San Francisco, and Managing Director of the
Corporate/Government Division, which assists organizations in
implementing dispute resolution management programs using ADR.
An increasing number of corporations are aware of ADR techniques and
the way in which this increasingly popular alternative to litigation can
save time and money for the legal department and the company’s line
managers. In fact, many have already engaged a retired judge to privately
mediate disputes between the corporation and business partners, vendors,
former employees, or other claimants.
What’s new? Organizations who are leading the way in ADR are
achieving its full potential by making it a standard legal tool and a part of
the company’s corporate culture. Implementation programs are becoming
increasingly popular tools to effect a faster, more cost-efficient transition
from a litigation-oriented corporate culture to one that is more ADRoriented.
Those who have truly adopted ADR are finding that it
significantly reduces legal costs, provides a more effective way to manage
the company’s litigation, and saves precious time for line managers by
sharply reducing the attention required by matters of dispute.
Inroads into Corporate Culture
Deere & Co., for example, reported that it resolved 20 of 36 potential
litigation matters from 1990-1991 by using ADR. Hughes Aircraft is
bringing in its outside legal counsel and requesting that all matters should
be directed to ADR unless Hughes can be convinced otherwise. Bank of
America and Wells Fargo recently implemented arbitration clauses that
drive customer disputes into ADR, not the court. [Editor’s note: See
“Arbitration Plan Challenged by Lawsuit” on page 188 of this issue.] Even
government agencies are joining the movement: the FDIC reported that it
saved $3 million in legal costs by sending disputes into ADR.
Implementing a dispute resolution management program using ADR is
no longer just an alternative for some corporations; it has become smart
business. Simply put, it has a positive net result at the bottom line because
every dollar saved in performing the legal function is a dollar into the