Massachusetts Collaborative Law Council, Inc.

Principles for Collaborative Business Law Dispute Resolution

January 21, 2015

Preamble

Today, collaborative dispute resolution is a nascent practice outside the area of divorce. The Collaborative Business Law (CBL) Practice Group of the Massachusetts Collaborative Law Council (MCLC) has identified some cases in which the core elements of collaborative practice were used. While the use of collaborative practice in non-family cases is still in its early stages, the members of the CBL Practice Group are optimistic about the broader use of collaborative practice. The basic elements of collaborative practice have been validated by (a) the growth of collaborative family law practice over more than 20 years; and (b) the promulgation of the Uniform Collaborative Law Rules/Act (UCLR/A) and its enactment in a growing number of jurisdictions.[1]

We questioned whether the promulgation of “protocols” is premature given the present state of collaborative business law practice and a widely-held belief that such practice is still evolving. More case data is required to inform the promulgation of collaborative business dispute resolution protocols at a level that would resemble the collaborative family law practice. The following principles of collaborative business law practice reaffirm the essential structure and core elements of collaborative practice and provide room for development and creativity as the practice emerges – an approach for applying sound collaborative practices in a developing discipline.

In applying our skills to this evolving area of practice, we are mindful of our responsibilities under the professional responsibility rules of the various professions that may participate in a collaborative dispute resolution process. It is not the intention of these Principles to impose additional standards or responsibilities. We encourage professional teams to vary their practice within these basic Principles in order meet the needs of the parties, without fear that these Principles will serve as guidance for imposing professional discipline or liability.

Principle #1: Stick to Basics.

The MCLC encourages wider acceptance and usage of collaborative practice in disputes outside the area of family law. At the same time, we reject expedient solutions that would alter collaborative practice fundamentals. Those fundamentals to which parties and collaborative practitioners must adhere in order for their dispute resolution process to be considered “collaborative” are:

Focused Representation and Disqualification Requirement. The founding tenet of collaborative practice is the requirement that each lawyer who represents a party in a matter is precluded from representing his or her client in any subsequent contested court proceeding of the same or any related dispute. This requirement removes the lawyer’s internal conflict concerning fees to be earned in any subsequent litigation, and it allows each lawyer to focus on problem solving and creative thinking in the interest of resolution-by-agreement. The requirements of disqualification extend to any law firm of which a lawyer is a partner, member or employee.[2]

Representation by Counsel. All parties who participate in a collaborative dispute resolution process must be represented by counsel.

Postponement or Stay of Litigation. During the collaborative process, all litigation must be postponed or stayed, with the exception of emergency orders to protect the health, safety, welfare or interests of a party or family or household member; or to protect financial or other interests of a party in any critical area in any dispute.[3]

Voluntary and Full Disclosure. Each party must have access to the information it needs to make informed decisions. All parties, counseled by their lawyers, shall agree to the voluntary, open and transparent exchange of all information and documentation that is relevant to the dispute without formal discovery. Such information and documentation shall be updated promptly with material changes and additions. The Participation Agreement may address mechanisms for, limitations on and timing of disclosure. However, the Participation Agreement should provide for mandatory withdrawal of the lawyer upon failure of his or her client to disclose relevant information.

Privacy and Confidentiality. Collaborative practice is a settlement process. Oral and written communications in the collaborative process are confidential to the extent agreed upon by the parties in the Participation Agreement or as provided by law. The Participation Agreement may also address the confidentiality of information disclosed in the collaborative process.

Privileged Communications. To promote full and open disclosure and dialogue, information that is disclosed in a collaborative process, which is not otherwise discoverable, is privileged against use in any subsequent litigation.[4] Parties may agree that all or part of the process is not privileged.

Participation Agreement. All disputing parties, lawyers, any facilitator-coach and other neutrals that participate in the collaborative process must sign a written Participation Agreement in their respective capacities. This Participation Agreement shall set forth the specific rules of engagement agreed upon with respect to the particular dispute, including the core elements of collaborative practice. The agreement must be in writing, describe the matter, state the parties’ intention to resolve the matter through collaborative practice, and confirm the engagement of the collaborative lawyers.  The parties may include other provisions not inconsistent with core collaborative elements.

Informed Consent. Before agreeing to represent a client in a collaborative dispute resolution case, a lawyer who provides focused representation must satisfy professional responsibility duties surrounding limited scope representation. These duties can be fulfilled by (a) educating the client on all dispute resolution processes available to the client and (b) deciding with the client that the choice of collaborative dispute resolution is reasonable and appropriate under the circumstances. The prospective client must be provided information sufficient to make an informed decision about the material benefits and risks of the collaborative process as compared to the material benefit and risks of other reasonably available processes, such as litigation, arbitration, mediation, or expert evaluation.  A prospective party must be informed of the events that will terminate the process and the effect of the disqualification requirement.

A Voluntary Process. Any party may unilaterally terminate the collaborative process at any time with or without giving a reason.

Principle #2: Let the Clients Decide.

Collaborative practice recognizes and promotes the “sovereignty of the clients.” In contrast to adversarial litigation, the clients in a collaborative dispute resolution process take more active roles – selecting process elements that meet their needs in critical areas such as scheduling, information disclosure and confidentiality, neutral experts, and outcome possibilities.

Principle #3:  Consider All Options.

Make no assumptions about how a collaborative team should be comprised.  A hallmark of collaborative practice is an ability to build and create the team of select neutrals that would best serve the parties’ needs.  Collaborative practice is flexible.  It is creative.  It is resourceful.  It is future-focused.  Build a network of neutral, expert resources from which to draw, including facilitator-coaches and financial professionals, for example.  Involve your client in the process.  Develop a mindset of custom design and flexible value-add.

Principle #4: Be Prepared.

Competence is an ethical requirement of all professional practice. The new roles of collaborative practice require proficiency in new skills. It is incumbent upon the professionals in collaborative practice to be sure they are adequately trained and experienced to serve in the roles in which they are engaged.

Principle #5: Start in the Best Way.

The professional team should confer early to anticipate and prepare to handle issues and exchanges likely to arise in the case. Through practice experience, family law practitioners have created a substantial body of knowledge and practices that are resources for business practitioners. Such resources are readily available to practitioners through the MCLC and the International Academy of Collaborative Professionals (IACP). Additional practice resources are being developed by various groups in specific non-family law areas, e.g. “Draft Trust and Estates Collaborative Full Interdisciplinary Team Protocols” developed by a collaborative practice group in California.

Principle #6: Practice Curiosity.

The fundamental elements of collaborative practice are designed to promote creativity and flexibility. Professionals are urged to practice curiosity – to be explorers through each dispute in order to give options and opportunities chances to emerge that are the best results for the disputing parties. Displaying curiosity may feel like a new skill – most professionals are cast as “knowers” – those who have the answers – not seekers. With the basic elements as support, experiment, learn and share with colleagues.

Principle #7: Act in Trustworthy Ways.

Trusting environments and trusting relationships achieve better, faster results than environments and relationships characterized by distrust.[5] Practitioners should take every opportunity to build trust within the group in the collaborative dispute resolution process. Trust builders are transparency, honesty and empathy. Practicing trust-building behaviors and skills are indicated to take full advantage of the collaborative process.

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[1] While the UCLR/A is not presently the law in Massachusetts, it has been adopted in “Act” form in Alabama; District of Columbia; Hawaii; Maryland; Michigan; Nevada; New Jersey; Ohio; Texas; Utah; and Washington. The “Rule” form has not yet been adopted on a state-wide basis. Alabama; District of Columbia; Maryland; Michigan; Nevada; New Jersey; Ohio; and Texas have limited the UCLR/A to family law matters. The UCLR/A applies to all disputes, family or other, in Hawaii; Utah; and Washington.

[2] The UCLR/A modifies the disqualification requirement for lawyers representing low income clients or government parties. We believe these exceptions are appropriate, encourage such parties to use collaborative practice and do not dilute the strength and value of the disqualification requirement.

[3] The exceptions are inspired by and consistent with the UCLA/R.

[4] The UCLR/A provides certain exceptions to the privilege based on important countervailing public policies such as preventing threats to commit bodily harm or a crime, abuse or neglect of a child or adult, or information available under an open records act, or to prove or disprove professional misconduct or malpractice.

[5] The value of trust in organizations is explored in Covey, The Speed of Trust (Free Press, 2006).