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Alternative Dispute Resolution (A.D.R.) is here to stay, but don't expect lawsuits to simply go away was the message a panel of industry lawyers made clear Friday during the first of five seminars on independent film production scheduled during the 1996 American Film Market in Santa Monica. Moderator Howard Frumes, Partner at Los Angeles based Manatt, Phelps and Phillips, emphasized that while arbitration, mediation, conciliation and other forms of A.D.R. are growing in acceptance and use in the resolution of film industry disputes, they aren't likely to completely replace litigation any time soon.
Brian Eagles, Senior Entertainment Partner at the United Kingdom firm Hammond Suddards, has acted as an American Film Marketing Association (AFMA) arbitrator for years and is a panel arbitrator and mediator for the World Intellectual Property Organization (WIPO). Eagles pushed mediation, mediation, mediation to the audience composed of 50% producers and 50% attorneys. Eagles promotes mediation over the more formal resolution procedures of Arbitration and Litigation because Mediation is quicker, less expensive, voluntary (just like arbitration), if unsuccessful, details revealed during the process cannot be formally used to prejudice the parties and, records of the proceedings are not public record and disclosures made to the mediator during the process are kept confidential. According to Eagles, mediation allows the parties themselves to articulate their points to each other in front of the mediator and then separately with the mediator. Parties only disclose those arguments they choose and get to hear first hand their opponents' views. Eagles admitted the downside to mediation is that there is no discovery, so parties can't examine the records of their opponents for the "smoking gun" document, that some mediators have a tendency to "split the baby" when making an award, that the decision is not precedential to other disputes so that no other parties are bound by it, and, you cannot obtain injunctive relief.
Retired Los Angeles Superior Court Judge Robert Weil, who more often moderates than merely participates in legal panel discussions, was most concerned about the role of lawyers in dispute resolution and was quick to call Eagles on his conviction that the parties themselves are best suited to resolve problems between them. Judge Weil agreed that the parties are the initial persons who must attempt to "fix" problems, but that once a dispute has arisen, the lawyer's role becomes clear and their skills must be relied upon to guide the parties through the dispute resolution process. Always the pragmatist, Judge Weil reminded the audience of the realities of A.D.R. when an insurance company is involved. Even in the simplest of disputes between parties, Weil claimed that when an insurance representative attends the hearing, all that matters is the bottom line: how much is this case worth? In such "evaluative" proceedings, Weil believes the parties desire to maintain relationships or continue doing business or salvaging a deal gone bad often take a back seat to the concerns of the entity paying the bill . . . the insurance company. Judge Weil did urge producers to find out more about all forms of A.D.R. and suggested placing both mediation and arbitration clauses in industry contracts.
John A. Schulman, Warner Brothers General Counsel, was the one panelist who most fervently urged audience members to resolve all their disputes by phone if possible, but to not forget the power of the formal structure of litigation. Schulman emphasized that Judge Weil's cost concerns were very important, but that costs in the entertainment arena are more appropriately defined in terms of relationships instead of specific dollar amounts. Resolve everything informally and through business channels was Schulman's message, but when the time comes to use the law . . . then use the law and be prepared to litigate. He supports mediation, arbitration and other forms of A.D.R. but has seen too often parties participate in mediation and letting their emotions sometime spoil the deal and the relationship instead of relying on logic and the law to settle disputes. Because the ultimate priority in this business is preserving relationships, Schulman was adamant that producers stay focussed on this priority when attempting to find creative solutions to each arising dispute.
Howard Frumes also gave highlights of the AFMA arbitration process and indicated that an AFMA mediation program is being developed. AFMA arbitration is available to both members and non-members, as long as the contract governing the parties' relationship identifies AFMA as the arbitration service used to resolve disputes, or the parties submit a separate written agreement requesting that their dispute be resolved through AFMA arbitration. Previously, only AFMA members had access to the process. The process is as simple as: (1) making a demand; (2) filing your claim; (3) selecting an arbitrator; (4) attending the hearing and presenting evidence; (5) getting your award. You can find out more about AFMA arbitration by calling the American Film Marketing Association at (310) 446-1000, emailing them, or visiting their website. For information on other types of A.D.R., call your nearest state or county bar association, or, in California, contact the California Lawyers for the Arts.
For the remainder of the Market, the Internet Entertainment Network will profile an assortment of international distributors/sellers as well as buyers and bring you short takes on each of the five seminars at this year's market, each focusing on Realizing the Independent Vision; Strategies to Survive and Prosper in the Age of Mega-Mergers.
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