CHAPTER 12 ETHICAL CONSIDERATIONS IN DISPUTE AVOIDANCE AND RESOLUTION
| Jurisdiction | United States |
(Mar 1984)
ETHICAL CONSIDERATIONS IN DISPUTE AVOIDANCE AND RESOLUTION
Sherman & Howard
Denver, Colorado
TABLE OF CONTENTS
Page
I. INTRODUCTION
II. THE ETHICAL OBLIGATION TO CONSIDER AND USE A.D.R.P.
A. Model Code of Professional Responsibility
1. Role as Advocate or Advisor/Counselor
2. Advantages of A.D.R.P.
a. Promptly Resolving Disputes
b. Minimizing Financial Cost
c. Minimizing Stress and Anxiety
d. Decreasing Relitigation and Increasing Compliance
e. Improving Compromise Results
B. Model Rules of Professional Conduct
III. THE A.D.R.P. PUSH FROM THE COURTS AND LEGISLATURES
A. Michigan Courts
B. Maine Courts
C. Colorado Courts
D. Colorado Legislature
E. Recent Cases
F. Summary of Counsel's Obligation to Use A.D.R.P.
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IV. ETHICAL PRECEPTS GOVERNING COUNSEL'S PARTICIPATION IN A.D.R.P.
A. Model Code of Professional Responsibility
B. Model Rules of Professional Conduct
C. Unwritten Standards and Conventions
D. Effective Representation of the Client's Objectives
E. Other Ethical Considerations
1. Conflicting Interests and Unauthorized Practice of Law
2. Confidentiality
3. The Neutral's Ethical Code
V. CONCLUSION
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I. INTRODUCTION
Thirty years ago, two distinguished law professors said that court victories all too often are Pyrrhic.1 Litigants are left financially and emotionally exhausted, and society bears a high cost for providing a forum for this often hollow victory. The last thirty years have demonstrated the accuracy of this statement.
There now appears to be a public consensus, from the Chief Justice of the United States to the editorial articles in local newspapers and all spectra in between, that resolving disputes by using the adversary court system is increasingly ineffective and unreasonably expensive. The courts are perceived as overburdened, slow to reach results, beyond the means of most citizens and, therefore, increasingly socially ineffective.
This paper explores counsel's ethical obligation to consider using not adversary court proceedings but an alternative dispute resolution program ("A.D.R.P.").2 A.D.R.P. includes negotiation, mini-trial, arbitration, mediation, and any other alternative to traditional, adversary court proceedings. The obligation imposed by the Model Code of Professional Responsibility ("Model Code") is compared with the duty imposed by the American Bar Association's new Model Rules of Professional Conduct ("Model Rules"). Additionally, the role of the courts and the legislatures in urging or compelling counsel to use A.D.R.P. is also discussed. Lastly, the ethical considerations applicable during participation in A.D.R.P. also are considered.
II. THE ETHICAL OBLIGATION TO CONSIDER AND USE A.D.R.P.
To what extent do the Model Code, currently adopted by most courts and bar associations, and the new Model Rules recommended by the A.B.A. ethically compel counsel to use A.D.R.P. in appropriate cases? There are no direct requirements that counsel use A.D.R.P. in appropriate cases. There are, however, general statements about the lawyer's role and duties which strongly suggest the existence of an ethical duty to consider, recommend, and in proper circumstances use A.D.R.P.
A. Model Code of Professional Responsibility
The Preamble to the Model Code provides in part:
Lawyers, as guardians of the law, play a vital role in the preservation of society. The fulfillment of this role requires an understanding by lawyers of their relationship with and function in our legal system. A consequent
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obligation of lawyers is to maintain the highest standards of ethical conduct.
In fulfilling his professional responsibilities, a lawyer necessarily assumes various roles that require the performance of many difficult tasks. Not every situation which he may encounter can be foreseen, but fundamental ethical principles are always present to guide him. Within the framework of these principles, a lawyer must with courage and foresight be able and ready to shape the body of the law to the ever-changing relationships of society.3
Surely anyone who views the struggle of the judicial system to meet society's needs for dispute resolution would agree that major efforts are in order to shift a substantial part of the burden of dispute resolution from the courts to other acceptable systems in an attempt "to shape the body of the law to the ever-changing relationships of society."4 Furthermore, there are Canons, Disciplinary Rules and Ethical Considerations which seem to indicate a duty to consider and utilize A.D.R.P.
1. Role as Advocate or Advisor/Counselor
The Model Code states that "A Lawyer Should Represent a Client Zealously Within the Bounds of the Law."5 This is usually thought of as guiding counsel's actions in the traditional court process. As a zealous advocate, the lawyer may file suit and urge any permissible construction of the law favorable to the client, without regard to his or her professional opinion as to the likelihood that the construction will be adopted.6 As an advocate, the lawyer has a duty to present, on behalf of his or her client, any lawful claim, issue, or defense for adjudication.7
The Model Code also permits and urges counsel in appropriate cases not to adopt the role of an unyielding advocate. DR 7-101(A)(1) states that, "A lawyer shall not intentionally fail to seek the lawful objectives of his client through reasonably available means permitted by law...."8 EC 7-1 allows the lawyer to seek the client's lawful objectives through any permissible means.9
The Model Code permits counsel to seek the client's objectives through any means permitted by law and does not require that the means be an adversary trial. Further, the Model Code recognizes that a lawyer may participate in A.D.R.P.'s, for example, as an impartial arbitrator or mediator.10 Assuming that legally permissible means are to be considered or used to attain the client's objectives, the issue becomes what objectives the client has and what legally permissible mean(s) best attain those objectives.
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2. Advantages of A.D.R.P.
In only certain situations will full trial, which may be financially and emotionally exhausting, best serve the client's interests. A.D.R.P.'s such as arbitration, mini-trials, and mediation have at least two apparent advantages over adversary proceedings: the issues usually are resolved more promptly and the cost should be less with the use of A.D.R.P.
a. Promptly Resolving Disputes
Proceeding through A.D.R.P. should enable the parties to resolve their dispute more promptly than proceeding through the backlogged court system and thus helps fulfill counsel's ethical obligation to resolve disputes promptly.11 166,447 cases were filed in the United States District Courts in 1978.12 By 1983 this number had increased to 266,440 cases, a 60.1% increase in filings. In 1979 each authorized judge had an average of 344 cases.13 In 1983 each authorized judge had an average of 517 cases. The number of authorized judgeships in 1979 was 516, and by 1983 this number had decreased to 515 authorized judgeships.14 The median case was tried 14 months after it was at issue, and a case normally is at issue 30 to 60 days after the complaint is filed.15
The figures for the United States District Court for the District of Colorado are similar. In 1978, 1,590 cases were filed and this number increased by 66.9% to 2,653 cases filed in 1983.16 In 1979, an average of 305 cases were filed for each United States District Court Judge in the District of Colorado. By 1983 this number had increased 50% to 442 filings per judge.17 If cases are weighted to demonstrate their relative difficulty, the weighted filings in 1983 were 532 cases per judge.18
This backlog in federal and state courts19 makes it virtually impossible for the parties promptly to resolve their dispute by proceeding through traditional adversary proceedings. With A.D.R.P., counsel and clients can set a significantly earlier date for a settlement conference, mini-trial, or mediation session. A.D.R.P. may fail to resolve the parties' dispute in which case the parties may have to proceed to a trial, but the likelihood of success may well require that A.D.R.P. be attempted. The success rate for many A.D.R.P.'s in resolving the parties' dispute is impressive and the probabilities indicate that the parties should be able to save time.20
Concededly, the parties may not have identical opinions on the desirability of promptly resolving their dispute. Although there are exceptions to the stereotype, it is generally thought that plaintiffs desire prompt resolution and defendants prefer delay. If the dispute drags on, however, defendants also may suffer. They may
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incur several undesirable effects including greater legal fees caused by the prolonged litigation,21 prolonged anxiety caused by the litigation, loss of valuable rights with the passage of time, and with the increasing willingness of some courts to award large pre-judgment interest awards, some defendants may not want to protract the litigation and risk a substantial interest award.22
b. Minimizing Financial Cost
A.D.R.P. also may save a client money. Although some commentators contend that A.D.R.P. may not produce substantial savings,23 it seems likely that money will be saved if the parties agree to engage in abbreviated and accelerated discovery. Moreover, since time often is money, money may be saved by spending less time resolving the dispute.
The primary out-of-pocket financial cost to litigants is attorneys' fees.24 In one study, out-of-pocket expenditures for attorneys' fees constituted 99% of the litigation expenses for individual clients and 98% for corporate clients. There is, however, a substantial financial cost...
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