I had the opportunity to sit down with and interview Rob Christopher, long-time litigator and founder of Just Resolve, who has an innovative approach to resolving disputes. We explored the idea of affordable justice and what that looks like for ordinary, everyday cases.
SS: Why should justice be affordable?
RC: Justice that is not affordable is not real. There is always an economic or financial component to any civil legal dispute. There needs to be some proportionality or rationality between what is at stake in the dispute and what it costs to resolve things.
Time and time again, I have seen that when parties end up in court with an everyday commercial dispute, the legal costs dwarf what the financial stakes are. Not to mention the hidden costs that are rarely considered.
SS: Tell me a little more about your concerns with the hidden costs.
RC: I think when clients choose to litigate a dispute, that they have a pretty clear understanding of what the legal costs will include. Like the fees for lawyers, out of pocket expenses, experts and depositions, as well as the court and administrative fees. They definitely have an understanding of these costs when the legal bills start rolling in. But they often don’t seem to have any idea what the hidden costs will be even though they are just as real as the dollars spent.
The stress, the lost productivity, and the distraction costs can be just as high, if not higher than all of the out of pocket costs. These hidden costs are just as real.
I think clients understand, at a theoretical level, that they are, and are going to be, in a stressful situation when they choose to go down the litigation path, but they don’t really understand the full brunt of this stress until they are in the thick of it.
Lawsuits necessarily involve stress and conflict. A certain amount of stress is inherent in the legal process itself. Lawyers understand that, but non-lawyers aren’t used to that kind of sustained stress and time away from work. The lost productivity can be very wearing if lawsuits drag on for years.
SS: Do you see other issues with hidden costs?
RC: I think two hidden costs that surprise people and businesses are cash flow management and impact on reputation. When the bills start coming in and cash outflow is high, that creates multiple stresses and often forces rethinking. When any business acts too aggressively in resolving disputes, then their customers, vendors and other business partners may choose not to deal with them in the future. These kinds of costs often could have been avoided with a process that is fast and fair, at least in limited stakes cases.
SS: What is your experience with limited stakes cases and what does that really mean?
RC: I call stakes “limited” when each side’s legal costs in litigation process will eat up most or all of the dollars that are at stake, win or lose, before the case is done. That’s over 90% of all legal disputes over money that are too big to be decided in small claims court. Some commentators also call these “ordinary,” “everyday,” or “middle range” cases. The extraordinary and complex cases with stakes in the multimillions that we hear about in the news get all the attention, but they are actually rare. These are high-stakes disputes that can involve an existential, bet-the-company threat to a business. Also in the category of high stakes are disputes where liberty is at stake, or custody, or the right to pursue a livelihood. In short, high-stakes disputes are those in which it may make sense to clients to spend whatever is necessary to try to get the outcome needed.
The dollars involved as limited stakes means something different to different people. For example, if the stakes are $15,000, that would be a limited stakes case to just about everyone. Even $150,000 to about $300,000 is seen by most lawyers I’ve interviewed as limited, because they usually can’t litigate those cases and deliver a net positive value in dollars to their clients. The costs of basic pleadings, discovery, investigation, a settlement process or two and/or trial will consume these amounts quickly.
Now, for a case that involves stakes of $1,500,000, that’s where things can become interesting. There are some situations where this amount or more is spent in legal fees alone. But, with most commercial disputes, the legal fees and hidden costs together won’t approach that amount. It obviously depends on the value and complexity of the dispute and the bullheadedness of the people involved. The more complex and the more stubbornly ambitious any one party or lawyer is, the higher the costs will be for everyone involved.
SS: Tell me how you came up with your innovation to make justice affordable for these everyday limited stakes cases.
RC: I started with what I knew as a long-time litigation insider. This let me gauge what was working and what wasn’t in how we resolve everyday disputes. Also, as a farm business owner (and more recently general counsel) of Christopher Ranch Garlic, I was able to see the need to resolve genuine disputes amicably and cost-effectively with business partners and employees. I then researched legal bills and published studies, and interviewed lawyers and clients.
I found that two things were essential: the economics have to work, and the system has to be fair. We’ve talked about the dollars – those can’t be like a running meter; they have to be bounded in some way.
For the fairness component, people want the opportunity to tell their side of the story, to have it heard by a neutral person of high integrity who is knowledgeable. Again, both the economic and fairness components are required for them to feel like they are getting affordable justice.
With my combined – some might say conflicting – legal and business perspectives in mind, I came up with a process that focuses on these two essential components, and pretty much eliminates all the expensive parts of the legal process – our lawyer-driven adversarial system which weaponizes the information gathering discovery process and where the judge or jury are in a reactive role and what they hear and see is presented to them by dueling lawyers using a lot of maneuvering and gamesmanship.
SS: Let’s dig into the actual process and what the innovation is.
RC: It’s a simple, fair, and expedited process, which keeps the safeguards of our current legal system and eliminates the expensive parts. I call it NDR – Non-adversarial/Neutral-Driven Dispute Resolution. The innovation is that the neutral decision maker (an “arbiter”) both investigates the dispute and decides it. This simple, but important innovation is what keeps the costs down and expedites the dispute resolution process.
The process is non-adversarial, and necessarily cooperative, as the parties agree to use it and mutually choose the neutral arbiter, much like arbitration or mediation.
Once the parties choose a neutral arbiter, the arbiter proactively investigates the dispute (which is unlike arbitration, mediation, or court) and ultimately decides the dispute. That’s it – 3 steps – choose to use the process and the arbiter, the arbiter then investigates the dispute directly, and last, the arbiter decides the dispute fairly according to law, comparable to what judges and juries do in our court system.
The process includes two optional steps: a mediation or negotiated settlement process if the parties agree at the time; and an appeal after a decision has been made as long as the parties agree to this option in advance.
SS: NDR sounds like a great innovation for ordinary, everyday cases, what is stopping this from becoming ubiquitous?
RC: I think the gating factor is that the parties have to agree to the process in advance, using a dispute resolution clause in a contract, or at the time a dispute arises, which can be difficult because the parties aren’t too trusting at that point. And once lawyers are involved, then yes, they need to agree to it as well. Most people will not act against the advice of their own lawyer.
SS: What is the biggest benefit of affordable justice?
RC: That depends on what matters most to each party. The out-of-pocket cost and time savings alone are usually on the order of 4-6 times, which pretty much guarantees a proportionality to the stakes that satisfies our sense of what justice should cost. On the other hand, greatly reduced hidden costs and improved intangibles – in stress, the satisfaction of being heard, salvaging relationships and reputations even though mistakes have been made, and the like – may deliver even greater value overall.
SS: Where are you seeing the most traction with the Neutral-Driven Dispute Resolution method?
RC: The sweet spots for Neutral-Driven Dispute Resolution are common commercial disputes, contract-based disputes, employment disagreements (that aren’t public policy based), common insurance disputes, partner (business or domestic) disputes, construction disputes, real estate disputes, and startup/investor disputes where capital is precious.