THOUGHTS ON ADR IN THE FACE OF THE COVID-19 PANDEMIC – A NEUTRAL'S PERSPECTIVE
By: Howard J. Kaplan, Esq. | April 2020
As we are all challenged by the current pandemic, it strikes me that alternative dispute resolution (ADR) is perhaps no longer an alternative to traversing the court system, but rather the only viable method for the expeditious resolution of disputes. Why do I say this?
Prior to COVID-19 our court system was plagued with congested calendars, a shortage of judges, depleted support staffs, and simply a lack of time for judges to commit to an active effort to engage the parties in settlement discussions. Rather, cases are left to linger for many months, and often years until reaching standards and goals for the case. This leads to a needless waste of time and money for both sides.
In fact, the current pandemic has led to a virtual shutdown of the court system. Civil trials have been suspended. Court appearances are not taking place. In essence, cases have been left in limbo. A virtual standstill. For insurance companies, this means reserves will be increased on claims as time passes with inactivity. For plaintiff's attorneys, there is a lack of revenue as cases linger. Additionally, the backlog in the courts will challenge the imagination when this crisis passes, and none of us know when that will occur. Standards and goals will likely need to be reset for cases that were waiting on the trial calendars prior to the suspension of court operations. That will lead to greater uncertainty, and certainly expense. We are all well aware that from a technological standpoint, the courts are not equipped to deal with the remote handling of litigation.
NAM (National Arbitration and Mediation) has reacted to the current crisis, and the future new normal for the handling of dispute resolution, by quickly converting cases, originally slated to be in person, to their virtual, cost effective/efficient system that allows cases to be mediated and arbitrated through the use of video technology. VirtualNAM allows cases to be seamlessly resolved without the need for travel by any party, attorney or carrier representative. All participants can hear and see each other. The mediator is able to separate the parties and engage in meaningful settlement discussion just as if all were present at the same location. NAM has been successfully utilizing this platform for many years.
I am in the unique position of being an active litigator, as well as a member of the NAM panel of neutrals. I have had the opportunity over the past month to both act as an arbitrator and mediator, as well as participate as an attorney defending a matter. I am pleased to report that the processes put into place by NAM were outstanding. The cases were handled without any glitches. NAM provides an outstanding team of IT support. In fact, a support person was present at the start of the proceeding to ensure a smooth proceeding. With respect to the cases where I have been the arbitrator and/or mediator, the feedback has been excellent.
The process offered by NAM allowed everyone to access the proceeding via their phones and/or laptop in the comfort of their home or office.
Greater utilization of ADR will result in plaintiff's lawyers and their clients resolving cases, obtaining money sooner. Insurance carriers get to close out files and reduce their reserves, which step up as they age. Bottom line, unlike fine wine, cases rarely get better with time. Memories fade, witnesses disappear, parties become entrenched in their positions. Costs mount as cases plod their way through an inefficient court system. These arguments were compelling prior to the COVID-19 pandemic. They will be amplified post epidemic.
Even where a case fails to settle at mediation, the stage is set for further discussions in the days ahead. I cannot tell you the number of cases I have handled that settled within a week or two following the mediation. Parties have time to rethink their positions. The solid neutrals at NAM will follow-up after the mediation to make ongoing efforts at getting the parties to come to an agreement. This is especially true at this time of isolation and stalling of our day-to-day lives. No one knows when we will get back to normal, nor what that normal will be. Certainly it will not be the same.
Each of us is challenged to maintain as normal an existence as possible. The current pandemic has altered the way we think about our lives and daily interactions. Certainly, remote handling of cases is unlikely to be temporary. NAM has taken a lead in offering a forum to conduct business as usual despite the current disruptions of our lives.
In sum, I started off by saying that ADR is no longer an alternative means of resolving disputes. Rather, in my humble opinion, it is the preferred forum for the speedy, cost effective resolution of disputes. We must all be flexible as we enter a new normal in the future. By doing so, we ensure that our businesses will maintain a steady cash flow, and have clients and principals who are delighted by the movement of matters to resolution. Remember, both sides desire an end to a matter. For the plaintiff, it means dollars. For the carrier, it means closure. For both, it means reducing expenses, thereby maximizing a recovery and profits.
I remain confident that we will all get past this terrible time together. Of that, I am certain. We will all be healthier, smarter and stronger. I look forward to that time.
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Howard J. Kaplan, Esq. is a member of NAM's (National Arbitration and Mediation) Hearing Officer Panel and available to arbitrate and mediate cases throughout the United States. In 2019, Mr. Kaplan was voted a Top Ten Arbitrator by the New York Law Journal Best Of Survey for the fifth year in a row. He is a partner at Carman, Callahan & Ingham LLP.
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For any questions or comments, please contact Jacqueline I. Silvey, Esq. / NAM General Counsel, via email at jsilvey@namadr.com or direct dial telephone at 516-941-3228