Disclose, disclose, disclose

The first three rules of real estate are location, location, location.  The first three rules of litigation are preparation, preparation, preparation.  When it comes to ADR, the first three rules are disclose, disclose, disclose.

The power and importance of disclosure cannot be overstated.  ADR proceedings have to be based upon the concept of neutrality and the moment that neutrality is question because someone hid a fact somewhere – whether knowingly or unknowingly – the underpinnings of the entire process can crumble.

Consider the case of Judge Jones of the US Bankruptcy Court in Texas.  Turns out Judge Jones and his long-time live-in significant other, a partner at a Texas law firm (and his former law clerk), didn’t bother to disclose their relationship when, perhaps, they should have.  This included the SO’s appointment to a mediation the Judge was overseeing, with a fee of $100,000 per month.  Judge Jones, once this came to light, resigned from the bench and his SO left the law firm.

Consider the case of the arbitrator who was appointed to serve on a case involving a Fortune 500 company.  A litigant discovered that the arbitrator’s law firm had previously instituted litigation against an electronics manufacturer, accusing the manufacturer of patent infringement.  The product in question was sold exclusively by that Fortune 500 company from the arbitration.  Even though the litigation was several years earlier, the failure to disclose it was significant.  When counsel discovered the omission, counsel disclosed it which ultimately compelled the arbitrator to recuse himself over his failure.

Disclosure is the duty of both the neutral and the parties.  It is incumbent to bring these issues to light so as to preserve sanctity of the process. 

To read more about Judge Jones, click here.