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Commercial suicide or good business sense?



Emma Barraclough


Judges, IP offices, parties and even some lawyers are in favour of mediation in IP cases. So why is it not more common?

I was at a seminar on mediation organised by the UK IPO and hosted by Wiggin in London last night for companies and trade associations in the creative industries

The Institute of Trade Mark Attorneys is holding another event on Tuesday, which suggests that the topic is on something of a roll at the moment (it’s also the subject of Managing IP’s next cover story). So what’s going on?

The new push to sell the benefits of mediation has trickled down from the 2009 Jackson report into ways to rein in costs in civil litigation in the UK. In it, Lord Justice Jackson recommended there be a "serious campaign" to ensure judges, lawyers and businesses know about the benefits of ADR.

Mr Justice Arnold (right) spoke last night, and it was clear that he is already an enthusiast ("It works so go and do it" were his closing words).

The speakers also made clear that there was plenty in it for businesses, particularly for those who want to maintain a working relationship with the parties with whom they are in dispute. As mediator Andrew Hildebrand said: "It can be hard to reassure the other side that you want to do business after litigation. It certainly isn’t helped by the words 'we have been instructed by’."

But what’s in it for law firms? After all, there must be pressure in the partners’ dining room on litigation lawyers to bring in the cash, and the biggest cheques invariably follow trips to the High Court (and beyond).

Wiggin lawyer Simon Baggs referred to that in his presentation, saying that barristers and solicitors had been asking him whether a talk advocating mediation didn’t amount to commercial suicide.

But when one audience member asked why private practice lawyers would encourage clients to settle through mediation, Baggs said that it was a matter of economics: it was in his interest to keep his clients satisfied, he said. "There’s lots to be said for clients leaving mediation happy. They tell people and that means we get more buyers of legal services. Any referral is good."

Although there’s an element of "well he would say that, wouldn’t he?" in his comments, one of Baggs’s clients later told me that he was right: good law firms focus on keeping existing clients happy – and returning – rather than burning them with one piece of expensive, but traumatising, litigation, especially when legal budgets are under pressure.

"We talk," she said. "The word soon gets around."

If you have experience of mediation (good or bad) and want to share those with us for our forthcoming article, do let us know.

Comments






Article Comments

Here in Spain most large law firms have excellent arbitration teams. The arbitration has been twisted enough to be rather complex so fees rise like a balloon. It´s not rare to see expenditures in the six, seven figures.

Mediation is the lame duck. Would you even split a couple as a mediator for 500 bucks when you can send them to court and take over 5.000 on basically the same effort. You are not only losing money individually; the whole industry shrinks.

Clients interest should be paramount but as one managing partner told me once "if they aren´t the cash cow then you are the cash cow". At the end of the day legal costs should stay at a stable, not changing margin.

If the fees don´t get urgently revised the bigger law firms won´t implement this practice and, therefore, mediation won´t get credit. GC´s won´t put their future on the line recurring to a clearly not in vogue system.

Jose Garriga Dec 03, 2014

I have been involved in mediating IP cases (patent, trademark, copyright and trade secret disputes) since 1994, when WIPO first created its arbitration and mediation center. My experience has been excellent on the whole, especially when taking into consideration the time and cost savings in complex and cross-border IP cases, or where the same IP asset is being litigated in several countries in parallel. Understanding the types of mediation process available (there are several important variants), and the individual mediators' qualifications and preferred styles are key strategic considerations. Despite the efforts of WIPO, INTA, LES and other IP organisations (as well as many leading IP judges) to promote the use of mediation in IP disputes since the 1990s, I am amazed by the consistent reluctance of the IP community as a whole to still embrace the use of mediation, which normally generates faster, cheaper and better outcomes for all of the parties involved (even in counterfeiting cases). I remember giving a presentation to an AIPPI meeting in Paris in Oct. 2010 with Mladin Vukmir (representing INTA) and Ignacio de Castro (representing WIPO). Of the several hundred lawyers and IP agents in the room, barely 5% of the audience had ever considered using mediation or another form of Appropriate Dispute Resolution (ADR). WIPO was already reporting at that time a 70% settlement rate in its mediations, and of those cases that did not settle in mediation, an additional 50% were resolved amicably following the end of the mediation proceedings (amounting to an effective ADR settlement rate of approx. 85%). For more recent WIPO statistics on the use of mediation and its settlement rates, see http://www.wipo.int/amc/en/center/caseload.html. The question today remains why most IP practitioners are still NOT advising their clients to use mediation earlier on, despite clear evidence of a 70% settlement rate and even higher client satisfaction ratings. (Not all successful mediations result in a settlement). If a case can be settled faster, cheaper and better, with a greater degree of client satisfaction and the ability to retain a greater degree of control over any outcome, while promoting business certainty at the same time and preserving positive relationships where they matter, can IP practitioners ever afford NOT to recommend mediation to their clients?

Jeremy Lack Feb 19, 2014

A matter of economics? I would have thought it was a matter of ethics to advise your client to take the path that is in its best interests, not in yours.

Michael B Feb 19, 2014

Rather tricky question: Law firms may press to gain $ from high level litigation, but the primary goal of Firms should be client protection and representation. "Suicide"? In this environment, when even simple litigation costs hundreds of thousands of dollars, Mediation may be the best answer for IP matters. And it still requires attorney time and effort and counseling. Firms that guide client counseling by Firm profits will not last long.

Michael R. Graham Feb 17, 2014

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