Sunday, November 9, 2014

Collaborative Law: Using Collaborative Law Process For Business Disputes

By Guilene F. Theodore and Kerry Raleigh Tipton

Collaborative practice is a voluntary dispute resolution process in which parties resolve their dispute without resorting to litigation. Throughout the collaborative law process, the parties agree to exchange information, possibly bring in trained third parties (expert witnesses, mediators, etc.) to help evaluate the value of the case, and ultimately work toward resolving the dispute through a process of “interest-based” negotiation, seeking creative solutions that work for the parties.

The parties and their lawyers sign a Participation Agreement, which generally includes the following provisions:

1. They agree in advance that if the matter is not resolved, the attorneys involved in the process will not handle the litigation.

2. The process is transparent. Everyone agrees to informally exchange all relevant information.

3. Everything is confidential from the inception of the collaborative process.

The collaborative process has become widely used to resolve family law disputes, particularly those related to child custody. Attorneys in several states are beginning to recognize its value as a tool for resolving other disputes as well. For example, the collaborative approach extends well to employment disputes in close-knit or family-owned businesses.

A collaborative approach to resolving employment disputes makes sense for these businesses because the cost of taking those disputes to court is measured not just in terms of the company’s bottom line but in the devastating effect on the family or other close relationships that are valuable and worth preserving. In addition, the parties in a family business setting tend to have a common economic interest in resolving their dispute. The collaborative approach provides a structure for cooperation and helps avoid damage to the business and the likelihood of family members holding lifetime grudges.

This approach also reduces the stress associated with resolution of conflict and lessens the disruption to business operations normally associated with discovery requests and key people being called away to depositions, hearings, and trial. Parties to such a shared solution are more likely to feel that their voices were heard and to abide by the terms of any agreement.

The process works well for disputes related to decisions about the timing of retirement of senior employees and any related succession plan; separation of employment needing confidentiality and non-competition agreements, and related enforcement; interactions between management and employees who are members of the family and nonrelated employees, including perceived biases; and restructuring of the business with layoffs.

However, not all disputes lend themselves to the collaborative process, and not all clients are receptive to it. Cases should be carefully screened to determine whether the process is appropriate. Attorneys on both sides of the dispute should obtain proper training in the collaborative process, explain all aspects of it to their clients, and obtain the informed consent of the clients for resolving their dispute in this fashion. More attorneys throughout the country and the world are considering the collaborative law process for their clients. Additional information is available at the HCBA Collaborative Section webpage.