Fussing about the Forum: Categories and Definitions as Stakes in a Professional Competition

Fussing about the Forum: Categories and Definitions as Stakes in a Professional Competition

Yves Dezalay and Bryant Garth

This article seeks to show the way that professional competition, including academic competition, about the definitions and categories of dispute resolution transforms the field of business disputing. It draws on extensive interviews and focuses on two case studies. The first is “international commercial arbitration,” and the second is the ADR movement, especially “mediation,” in the United States. In each case, the article shows that there is competition about what can legitimately be termed arbitration or mediation; that there is competition more generally for the business of business disputing; that the competition is not played on a level playing field; that competitors compete in terms of the symbolic capital that they have to offer, which is changing over time and in relation to what others possess; and that the (always provisional) results are important for transforming the “rules of the game” for governing business transactions. The internal transformations in the jield of business disputing also take place in close conjunction with transformations that can be seen as outside, above all, the international restructuring of business relations in the 1970s and 1980s.

Yves Dezalay is Charge de recherche de premiere classe of the Centre National de la Recherche Scientifique, with specific connection with the Centre de Sociologie de 1’Education et de la Culture of Paris. Bryant Garth is Director of the American Bar Foundation.

The work reported here is part of a research project on the subject of international commercial arbitration and private justice, funded by National Science Foundation grant no. SES-9024498 and by the American Bar Foundation. The authors would like to [hank Carrie Menkel-Meadow for extremely valuable assistance in helping us try to develop this article, the anonymous reviewers who pushed us on a number of points, and Carole Silver, who again was an important contributor to the research and in the editorial work.

0 1996 American Bar Foundation. 0897-654619612 l02-0285$0l.00 285

286 LAW AND SOCIAL INQUIRY

“[OJne of the major purposes of arbitration is . . . to encourage conciliation.”

-Pierre Lalive, a leading international commercial arbitrator’

“For years I have been critical of the way arbitration is done in the United States. . . . Most people . . . are unhappy with the results because they believe the arbitrator invariably will split the baby.’’

-Corporate litigator2

“International commercial arbitration . . . is in large measure a substitute for national court litigation.”

-Charles Brower’

“As a mediator I very often evaluate a party’s legal position. They say this is our position, and I say it will never fly. You’ll never convince a judge of that.”

-Former judge, now ADR specialist

Judges are “ill-suited” to the “friendly persuasion that is the key to successful mediation.”

-Mediator quoted by Karen Donovan4

“In its ‘purest’ form, mediation is facilitative-the third-party neutral helps the parties to arrive at their own solution.”

-Carrie Menkel-Meadow5

Despite the cacophony of seemingly irreconcilable opinions about the processes of dispute resolution, academics and academic practitioners continue to mold the raw material into increasingly sophisticated theories and taxonomies. We now have many texts and articles on the latest trends in dispute resolution, carefully distinguishing, for example, between arbitration, mediation, and litigation; adding early neutral evaluation, minitrials, and summary jury trials; and then subdividing into types of mediation, types

1. Pierre Lalive, “Enforcing Awards,” in International Chamber of Commerce, Sixty Years of ICC Arbitration 318 (1984) (“ICC, Sixty Years”).

2. Quotations not otherwise identified refer to personal interviews by both the authors as part of a research project on the subject of international commercial arbitration and private justice. The results of the research are reported in Yves Dezalay & Bryant Garth, “Merchants of Law as Moral Entrepreneurs: Constructing International Justice from the Competition for Transnational Business Disputes,” 29 Law B Soc’y Rev. 27 (1995); and Yves Dezalay & Bryant Garth, Dealing in Virtue: International Commercial Arbitration and the Construction ofa Transna- tional Legal Order (forthcoming University of Chicago Press, 1996) (“Dezalay & Garth, Deal- ing in Virtue”).

3. “Introduction,” in R. Lillich & C. Brower, eds., International Arbitration in the 21st Century: Towards “Judicialization” and Uniformity? 8 (Transnational Publishers, 1994) (“Lillich & Brower, International Arbitration”).

4. K. Donovan, “Searching for ADR Stars,” Nat’l L.J., 14 March 1984, p. Al. 5. Carrie Menkel-Meadow, “The Many Ways of Mediation,” Negotiation I., July 1995,

pp. 217, 225.

Fussing about the Forum 287

of arbitration; and combined processes with names like “medarb.”6 Aca- demic theoreticians may suggest the advantages and disadvantages of one or another process for particular disputes and clients or simply offer the latest array as a menu for client choice. Theorists thus bring order and system to the seeming chaos of new and competing practices-where mediation is sometimes said to be the best way to resolve disputes in the shadow of the law; sometimes criticized as a process focused only on settlement or for results that “split the baby”; sometimes praised for psychologically empower- ing the litigants,? other times criticized for a cooling of claims through a therapeutic approach inconsistent with rights.8 And arbitration, while always distinguished from mediation, is seen at times as only a means for encouraging settlement, again with results that may only “split the baby,’’ and is now increasingly defined in reference to another process-as private l i t igati~n,~ at least for big cases.

These general claims and criticisms are of course inconsistent. They are also competitive. What is not often recognized, however, is that in this competition, academic resources and theoretical accounts are extremely important. Success in making one or another definition accepted as legitimate or pushed aside as illegitimate is a key to winning the competition. This competition, moreover, is not only important to the contestants for the business of dispute resolution. The competition also plays a fundamental role in shaping the rules of the game for disputes and regulatory norms con- cerning business.

This article focuses on the processes of defining and redefining the categories and institutions of business disputing. The categories and institutions for handling business disputes in the United States and internationally are constantly changing, and the change has accelerated through the internationalization of trade and legal practices. The rise over the past 20 years of the alternative dispute resolution (ADR) movement is a major story in the United States, and it is paralleled by the growth and institutionalization of international commercial arbitration for transnational business disputes.

6. See, e.g., F. Sander 6. S. Goldberg, “Fitting the Forum to the Fuss: A User-friendly Guide to Selecting an ADR Procedure,” Negotiation J., Jan. 1994, pp. 49-68 (quoting Maurice Rosenberg’s phrase). T h e promotional letter for E. Dauer, Manual of Dispute Resolution: ADR Law and Prm’ce (1999, describes it as a book that “helps you determine which technique you need” (mailing from Patrick McCahill, Senior Editor). See also, e.g., S. Goldberg, F. Sander, 6. N. Rogers, Dispute Resolution (1992); J. Murray, A. Scott, & E. Sherman, Processes of Dis- pute Resolution (1989); L. Riskin & J. Westbrook, Dispute Resolution and Lawyers (1987); Jac- queline Nolan-Haley, Alternative Dismte Resolution in a Nutshell (1992). See also J. Wilkinson, ed., Donovan Leisure Newton B Irvine ADR Practice Book (1990, with 1994 Supp.).

7. R. A. Baruch Bush & J. Folger, The Promise of Mediation: Responding to Conflict through Empowerment and Recognition (1994).

8. The latest positions are reviewed by Menkel-Meadow, Negotiation]., July 1995, p. 217 (cited in note 5). Differing positions of mediators are found in D. Kolb & Associates, When Talk Works: Profiles ofMediators (1994).

9. See Center for Public Resources (CPR), Model Rules for Private Adjudication (1994).


The processes of change and institutionalization, however, are poorly understood. Part of the problem is that most of the tools for examining change presuppose the categories that are the object of the study. Scholars and journalists tend to take polls, conduct interviews, or undertake evalua- tions as if there is something that objectively can be termed “mediation” or “arbitration” or some other name.1° While such an approach can be instruc- tive, providing a snapshot of a particular moment, it negIects the question of how, for example, mediation and arbitration came to be defined in relation to each other, and in relation to the law, the state, and economic power. A term like mediation or arbitration, as Bourdieu says about professions, is “the social product of a historical work of construction of a group and a representation of groups that has surreptitiously slipped into the science of this very group.”I1 Part of the inquiry, as we suggest below, has to be into how the scientists of dispute resolution contribute to the production of representations that are very much part of the transformation of the practice and social role of dispute resolution-indeed, representations that help turn the winners of a competition into the owners of a professional category, such as (pure) mediator or arbitrator.

Our purpose here is to address three established theoretical literatures and suggest an alternative but complementary theoretical perspective. While our concerns touch on many potential theoretical approaches, we are focusing on the literature most concerned with dispute processing, professional competition, and institution building. These literatures, in our opinion, are the starting point for a reinterpretation of the competitive process of constructing institutions and rules for business disputing. We shall draw on data from our own empirical research to illustrate what our theoretical approach can offer, but our purpose is not to produce definitive case studies or accounts of the field of business disputing. Accordingly, and because our

10. For example, it is said that large corporations “prefer mediation over arbitration,” 4 World Arb. B Mediation Rep. 265 (1994), or that mediation is the next “magic bullet.” S. Antilla, “The Next Magic Bullet? Mediation,” N.Y. Times, 5 Feb. 1995, sec. 3, p. 13. Simi- larly, according to E. Rolph, E. Moller, & L. Petersen, Escaping the Courthowe: Private A k m - tive Dispute Resolution in Los Angeks 39 (RAND, 1994), “Although arbitration may currently dominate the marketplace, anecdotal information suggests that mediation and other ADR procedures are growing in popularity. Firms interviewed report that disputants are becoming more sophisticated in their understanding and use of ADR and are increasingly turning to mediation.” See also Center for Public Resources Institute for Dispute Resolution, Law Firm Practices in ADR: 1994 Survey Findings 13-15 (1999, reporting that of the law firms which made profits on ADR activities, mediation was the most profitable; and that more of the responding firms in the profitable group participated in mediation than in other forms of ADR. These analyses tell us something, but they completely miss the importance of what is meant by mediation and arbitration, how they came to have those meanings, and what those meanings and institutional embodiments mean for the governance of business relationships- including the role of law, the state, and economic power.

11. Emphasis in original. P. Bourdieu & L. Wacquant, An Introduction to Reflexive SocioG ogy 243 (1992) (“Bourdieu & Wacquant, Refkxive Sociology”).


approach is still somewhat unfamiliar in law and society research, we will focus much of this article on our more general approach.

I. THEORETICAL APPROACHES

We begin with the theoretical approaches we seek to address. The most obvious are theories of dispute resolution and specifically those con- cerning business disputing. Our first aims are to persuade these academic and practitioner theorists that they are themselves part of the process of professional competition for the business of business disputes. Their theoretical work should take this aspect of their position into account. We are not suggesting, however, that academics are necessarily motivated by a desire to use their research to gain a place in the market for business disputes. Many of the academics are practitioners, and some of them could perhaps be writing with an eye on their business, but it is of no concern to our research interests whether academics or others are motivated by greed, by purely theoretical concerns, by pure ideals of how best to resolve business disputes, or by other factors, such as a concern with the political results of the processes. The point is that academics are supposed to and do produce generalizations and theories as part of their academic careers and ambitions, and this production is embedded in relations of power and competition that operate at several different levels.12 That does not mean that academics are the most important players or that the contest of academic representations is di- vorced from external factors and power relations; but we cannot understand the construction of legal practice without considering this generally neglected aspect of the theory that academics produce-and attack.

Similarly, we do not take a position in the competition about whose theory is best as pure theory, which represents the best account of practice, or what practice should he. We hope instead, as noted above, to persuade the producers of academic theory that their theory should incorporate a more reflexive position, taking better account of the connection between academic strategies-including their own (whatever their motivations)- and the changing field of dispute resolution. Whether academics or practitioners, or some combination of the two, they should consider the impor-

12. While not concerned with business disputing, a recent article can illustrate this point. McEwen, Rogers, and Maiman, examining divorce mediation in Maine, conclude that despite some of the accepted notions of mediation as a process that should leave adversarial lawyers aside, lawyers can indeed be brought in: “Lawyers should discard traditional mediation, even if it seems more ‘real’ or satisfying to the mediator, if it fails to serve the families’ needs or ensure fairness.” Craig McEwen, Nancy Rogers, & Richard Maiman, “Bring in the Lawyers: Challenging the Dominant Approaches to Ensuring Fairness in Divorce Mediation,” 79 Minn. L. Rev. 1317 (1995). We do not question their conclusion, but it is important to note that they have taken a position in a contest about the role of law and lawyers in divorce mediation, and their position-now legitimated in dispute resolution theory-will in turn be used in those continuing battles.


tance of the sociology of knowledge about business disputing-that is to say, the broad relationship between theory and practice.13

Two other theoretical literatures also relate to our ambition to bring greater awareness among academics of their role in the transformation of business disputing. They also concern more general issues in law and social science. The new institutionalism in economics’4 and sociology1 seeks to examine the social construction, maintenance, and transformation of institutions, including those that govern the state, the market, and business behavior.16 The neo-institutionalists provide a helpful framework to study the emergence and transformation of institutions-or even new professions- for the mediation of business disputes, for arbitration, or even for alternative dispute resolution.17 Our approach is similar and covers much of the same ground. We seek to explain how institutions are constructed, legitimated, and transformed. The tendency of studies that follow the neo-institutional approach, however, is again to present the institutional results as if they were completed outside of the world in which the academic operates. Yet, as noted above, academic works-individually or cumulatively-can become part of the process of change, despite the intentions of any given scholar, as findings and analyses are used, interpreted, and misinterpreted in the construction and reconstruction of institutions. Looking backward from the perspective of a particular institutional understanding of what is meant as mediation, for example, reinforces the claims of that definition-favoring some groups and not others-to represent what mediation is.

We can underscore the inevitable uses of academic effort through personal experience. Despite our effort in this article to minimize the problem of the inevitable process of reification that comes from privileging any particular name or representation, our work has been read by some reviewers as taking a position about what legitimately can be called mediation-for example, as suggesting that retired judges promoting settlements on the bases of legal strengths and weaknesses are entitled to be called mediators. Aca-

13. This is not the same as the gap between theory and practice as typically presented in law and society scholarship. We have not studied practices in the sense of observing media- tions or arbitrations. Our concern is with the construction and transformation of institutions and the rules of the game for operating those institutions. Rules may be disregarded, but they set the terms for the criticism and legitimation of those practices.

14. Of particular relevance is P. Milgrom, D. North, & B. Weingast, “The Role of Insti- tutions in the Revival of Trade: The Law Merchant, Private Judges and the Champagne Fairs,” 2 Economics B Politics 1 (1990). The sociological literature, however, is closer to our approach in method since it relies less on economic theory and more on empirical research into the activities of individuals and groups to determine the development and place of institutions.

15. See, e.g., W. Powell h P. DiMaggio, eds., The New Institutionalism in Organizational Analysis (1991) (“Powell & DiMaggio, New Institutionalism”).

16. See, e.g., M. Granovetter & R. Swedberg, eds., The Sociology of Economic Life (1992); N. Nohria & R. Eccles, eds., Networks and Organizations: Structure, F m , and Action (1992).

17. See, e.g., P. DiMaggio, “Constructing an Organizational Field as a Professional Pro- ject: U.S. Art Museums, 1920-1940,” in Powell & DiMaggio, New Institutionalism.


demic reviewers with a different approach seek to disqualify retired judges from using that term to describe their activities, and they naturally resent anything in our presentation that seems-despite our efforts-to legitimate former judges as real mediators.

Scholars of professional competition, notably Andrew Abbott in The System of Professions,'* focus more directly on the instability of professions as institutions and the role of academic knowledge in professional competition. Abbott emphasizes the role of professional competition in constructing the jurisdictions in which particular professionals operate, and he also gives a place of some importance to academic theory in constituting the core of the profession and professional expertise. Our picture of competition and change, however, is somewhat different than the one he presents. Abbott presents a contest between competing armies fighting over new territory or at the frontiers that more or less divide them. Changes in practices at the frontier are in his framework reintegrated back into the core of knowledge. We wish to place more emphasis on how academic and other battles taking place at the core affect what happens in the battles in frontier terrains.I9 We cannot understand the activity at the frontier, in other words, without understanding battles over what representations and categories are considered legitimate.

More concretely, we cannot understand whether international arbitrators, or some of them, will gain authority to resolve intellectual property issues by looking only at contests about who will handle this new frontier of business disputing. The battle over the new arena depends on how international commercial arbitration is itself defined and legitimated at the core. The results of the constant struggles at the core determine the relative winners and losers and the institutional legacies. Academic efforts, to repeat, are part of that process of defining and legitimating, and this is true whether they are promoting new syntheses or debunking existing categories in the name of politics, fairness, or theoretical weakness.

Finally, we note that our specific subject of transformations in dispute resolution should be related generally to issues at the core of the sociology of law.20 The stories and discussions of practices, categories, and transformations are examples of the relationship between legal theory and practice, legal tradition and modernity. The legal theoreticians serve a role similar to that of grammarians in the field of language.2' They help to maintain legitimacy over time by addressing and rationalizing novel practices within already accepted categories-which can then change at a much slower pace.

18. Andrew Abbott, The System of Professions (1988). 19. See also Ronen Shamir, Managing Legal Uncertainty: Elite Lawyers in the New Deal

20. See, e.g., Alan Hunt, Explorations in Law and Society: Towards a Constitutive Theory of

21. See P. Bourdieu, Langunge and Symbolic Power (1991).

(1995).

Law (1993).


Constant change and “updating” keeps law in step with social and economic relations-and in demand by social and economic actors.

11. STUDYING TERMS, DEFINITIONS, AND INSTITUTIONS AS SITES OF PROFESSIONAL COMPETITION

We turn now more directly to our own approach, which grows out of our project on international commercial arbitration. As part of this project, we interviewed close to 300 academics and practitioners of private justice, principally persons who considered themselves to be international arbitrators but also, especially in the United States, other kinds of practitioners in the field of business disputing. One of our principal findings was that the internationalization of legal practice, which facilitates new opportunities of exchange, accelerates the general process of breaking down and remaking existing boundaries for business disputing. We see transformations of the boundaries between what is termed mediation, litigation, and arbitration; and also of the boundaries and categories with respect to what is accepted as a legitimate variety of one or another such process. In other words, what is meant by mediation, litigation, or arbitration is also transformed.

We use two particularly interesting case studies-first, commercial arbitration of transnational disputes and, second, mediation in the United States-to illustrate the general approach and what it might reveal. We use the studies to suggest how the more or less accepted meanings of each ‘‘process” and the leading institutions have evolved out of professional conflicts and competition-over theoretical definitions, among other things. This focus on internal transformations will allow us to see how the terms and what they refer to are changing over time. More importantly, however, we wish to show that such case studies provide essential material to address the more general subjects of business disputing, the law, and the state.

Transformations in the meaning and legitimacy of arbitration and mediation are part of a broader competition for the business of business disputes and for the legitimate authority to regulate business conflicts. Stories that seem to take place internally within the legal field-as professional competition-must be related to “external” transformations in the fields of economic and political power.2z The transformations internally in business disputing have taken place in conjunction with a restructuring of the international economy and the role of the state. In particular, the boom in international arbitration and in domestic business litigation is closely connected

22. The terms “internal” and “external” are meant to suggest the importance of looking outside of the field of dispute resolution to developments in the economy (or in politics), but of course the developments in the economy are to some extent constituted by the development in the legal field.


to the transformation of business through the oil crisis, the growth of petro- dollars, and a new generation of north-south conflicts.

Before commencing our case studies, we must return to the fundamental methodological challenge that we already mentioned in our critiques of other approaches. We define our case studies by employing terms like arbitration, litigation, and mediation, but a basic purpose of the research is to avoid reifying categories and institutions.*’ Indeed, while it would be extremely tedious to place quotation marks around the categories every time we use them, it is necessary to avoid taking them at their current face value. What gave them their (always provisional) meaning and value must be part of the object of study.

We seek to mitigate this inevitable problem through our empirical research strategy, which we have pursued most comprehensively with respect to international commercial arbitration. We focus our attention first on the people-the individuals who shape the institutions and who engage in the contests about labels and comparisons. Individual players, we have found, can be located by tracing the networks of individuals recognized or seeking recognition in the field of arbitration or mediation (or business disputing more generally).*4 Once the individuals are located, lengthy interviews with key players and a sample of others can be used to provide the data for the analyses. As suggested below in more detail, the key analytical tools that link the individuals to the analyses are (1) relating individuals and their personal strategies-not always recognized by themselves-to the structure of the field of business disputing; and (2) relating conflicts and competition in the field to the “symbolic capital”Z5 possessed by the individuals who, depending on their positions in the field, compete on behalf of their education, their experience, and their professional and social connections.

The focus on competition should not be taken to imply that the competitors have equal power. It is not a level playing field. Symbolic capital is possessed unequally, and the players in the competition enter with different resources. The relative power and influence are also related to the factors that are “external” to-but in a real sense also present in-the actual competition. Both case studies-arbitration and mediation-in fact illustrate a

~~ ~~ ~~~ ~~~ ~~

23. In Bourdieu’s words, “The first and most pressing scientific priority, in all such cases, would be to take as one’s object the social work of consauction of the pre-consmccted object.” Emphasis in original. Bourdieu & Wacquant, Reflexive Sociology 229 (cited in note 11).

24. We use field in two senses. One is the popular notion of who the “players” are according to insiders and knowledgeable observers. The other is the analytical concept of “field” (id. at 104-14) as a means to study such questions as the role of law. For some research purposes, it is convenient to see arbitration or mediation as “mini-fields’’ characterized by their own rules of the game and players; but it is also important to see mediation and arbitration as part of a more general field of business disputing. The “field,” of course, is not a fixed thing, but rather is a tool to facilitate research in terms of structures and relationships.

25. Again, a term from Bourdieu (id. at 119), which for present purposes refers to the value that comes from the recognition given to degrees, technical skills, particular kinds of authorities, and the like.


shift in the power of the major players in business dispute resolution. In the first case, the transformation of international commercial arbitration illus- trates an increase in the power and role of large U.S. law firms and in particular their litigators in international dispute resolution; and in the second example, while it is still relatively early to draw conclusions, it appears that the transformation reveals a substantial increase in the power of in-house counsel in the United States with respect to the very same litigators who were so successful in the story of international commercial arbitration.

Finally, we wish to reiterate what we do not intend to do. First, we did not examine actual proceedings for handling business disputes.26 We cannot therefore detail how actual practice relates to the battles and transformations that we describe. The discourse about business disputing, and especially what is deemed to be legitimate and acceptable, is taken very seriously by practitioners who shape the institutions and defend them in the market. Similarly, it can be suggested that the individuals who are ranked by their peers at the top of the field may not in fact be the ones who gain the most business. No one has records that would answer this question definitively, and of course success in this respect changes over time. Again, however, there are many ways in which the achievement of eminence in the field promotes success in gaining actual cases. As with respect to the contest about what is defined as legitimate, accepted hierarchies gain the power of conventional wisdom for both consumers and producers of the services- and the institutions in which they operate.

111. CASE STUDIES

We have selected two case studies that, in retrospect, must be considered remarkable success stories. International commercial arbitration, our first subject, is now well institutionalized, protected by treaties and liberal national statutes. Contractual clauses calling for international commercial arbitration in the event of any disputes are practically standard in international commercial transa~tions.~7 Alternative dispute resolution, and more particularly mediation, is a recent but perhaps equally remarkable success story, dominating much of the recent focus on business disputing in the

26. Moreover, since we are concerned with the construction and transformation of institutions, it would be misleading to take one or another institution or definition as given and make it the object of our observations. Similarly, even if we were to take as our topic “business disputing,” and then try ro learn the changing practices, we would still have the problem of predefining business and dispute, both of which also change over time.

27. As our approach suggests, we doubt that numbers can be found to document this success definitively, largely because the label is unclear and there is a competition to appear successful by inflating the number of “international” matters. Still the growth of the caseload of the International Chamber of Commerce from a handful of cases in the 1950s to around 350 in 1993 attests to the growth. See “ICC Court Reports Increase in Filings: More Diversity among Parties,” 5 World Arb. B Mediation Rep. 216 (1994).


United States.28 These international and U.S. developments are related, and there is now also competition between mediation entrepreneurs seeking to gain a larger share of the international business. The challenge is to see beyond the seemingly natural success stories to the complex competitive processes that have taken us to the present institutional line-up and may lead to substantial further changes.

A. International Commercial Arbitration

In the past 20 years, “international commercial arbitration” has shifted from an informal, compromise-oriented justice dominated by European academics to a US.-style, formalized, “offshore litigation.”29 Despite dramatic practical changes, it is still called “international commercial arbitration,’’ and the major institutions still have the same identities. The specific term of arbitration and some of the most general characteristics are, after all, passed on through the activities of individual carriers and through the activities of the institutions long identified with arbitration. Scholarly accounts of international commercial arbitration, furthermore, reinforce the story of continuity by counting cases and discussing growth as if the process has essentially remained the same.30 I t is clear, however, that what is now generally understood by the term is significantly different.

International commercial arbitration’s recent history began with the activities after World War I1 of a small group of gentlemen idealists- mainly Continental legal academics schooled in international law-connected with the International Chamber of Commerce in Paris. These idealists cultivated good relations with the business world and promoted the distinctiveness of international commercial arbitration as an alternative to national litigation. Through academic writing, conferences, and activity that promoted the virtues of arbitration, they gained credibility for arbitration as a means to resolve transnational business disputes. They promoted arbitration as relatively inexpensive, informal, and capable of meeting the needs of businesses increasing their international activities and investing in third world countries. They developed an elegant academic legal doctrine, which they termed the new hx rne~catwia,~’ and they also sought to make ~~

28. Again, numbers are a problem, but there are some indications in the reports cited in note 10 above.

29. This section draws on the article and book cited in note 2. Of course, the change is not complete, and arbitration is not precisely like U.S. litigation, but it is now a forum where US. litigation can use its full range of techniques.

30. See, e.g., W. L. Craig, J. Paulsson, & W. Park, International Chamber of Commerce Arbitration (1990).

31. See generally T. Carbonneau, ed., Lex Mercatoria and Arbitration (1990) (“Carbon- neau, Lex Mercatoria”). The lex mercamia is sometimes called “new” to distinguish it from the law merchant of the medieval period. The most famous academic proponent of the lex mer- caturia was a French law professor, Berthold Goldman, who also was a leading arbitrator.


their decisions conform to the particular needs of business. One need they met was the business desire to avoid giving state enterprises advantages over private parties. The lex mercatoria governed all such business relations by the private norms of contract.

The promoters of the kx nercutoria also emphasized the importance of using arbitration as a way to bring the parties to an acceptable solution consistent with general business expectations.32 The success of these academic mediators reveals the advantage of a portfolio combining high status and academic sophistication. The formulators of the kx mercatoria could play a rather successful double game in dispute resolution. As academic authors of the rules of the game applicable substantively, they would also be the best ones to decide when the rules did and did not apply. Accordingly, they could shape their rulings to particular situations without losing the claim of universalism for the lex mercatoria. The success at finding tailored solutions was such that commentators active in international arbitration could emphasize that, in contrast to litigation, arbitration could help parties preserve a long-term contractual or other business relationship.33 Tailored settlements and the kx mercaturiu coexisted perfectly.

There were not many arbitrations, however, even though the pioneers did succeed in promoting the idea and placing arbitration clauses in many contracts. They developed a niche, but no one could have predicted that business disputes that invoked these clauses would suddenly proliferate and open up this very small market. External factors helped bolster the demand.

The large construction and infrastructure projects that took place after the increase in the price of oil in the early 1970s can be seen as a key catalyst for change. The projects gave rise to numerous disputes and-because of the success of the pioneers in promoting arbitration clauses-many more international commercial arbitrations.34 New entrants sought to gain a foothold in the growing arbitration market, and they began to compete with the senior generation of gentlemen arbitrators. The terms of the competition, however, reflected the particular kind of market that existed and the way that arbitration had been defined by the gentlemen scholars.

Those pioneer idealists, who still possessed considerable power in the arbitral institutions and in the recommending of arbitrators, had succeeded in defining the terms of entry into the field of arbitration so that entry was

32. An individual who served as “secretary’l-a kind of law clerk-to one of the great arbitrators, Pierre Lalive, thus noted: “He . . . hardly ever decided a case. They would all be settled at some point. And that takes a lot of skill . . . from the chairman.”

33. According to Pieter Sanders, one of the leading arbitrators dating back to at least the 1960s, the secrecy and informality of arbitration combine to give “a better chance that parties will remain on speaking terms and will continue doing business with each other.” Pieter Sand- ers, “Trends in the Field of International Commercial Arbitration,” Recueil des Cows 1975-11, at 205, 215-16 (1976).

34. A case study exemplifying this type of dispute is provided in Dezalay & Garth, Deal- ing in Virtue ch. 5 (cited in note 2).


virtually barred to individuals who did not purport to promote the long term interests of arbitration as a dispute resolution device for international conflicts. Under these rules, for example, it was difficult for self-promoters to gain the credibility to advance as arbitrators or lawyers in arbitration. There was no explicit advertising, and it would not have helped to gain entry into this cartelized community-sometimes termed a club or even a mafia.

The competition was therefore expressed in terms of what would best make arbitration legitimate and acceptable to businesses and to other potential constituencies. It was a competition in ideas organized around theoretical and scholarly debates about what international commercial arbitration must be in order to retain its legitimacy. The ideas were also closely related to the individuals seeking dominance in the business. Theo- rists and practitioners-quite often the same people-debated in academic terms that also reflected their own positions in arbitration.

Competitors thus sought to define international commercial arbitration-and the leading institutions, especially the ICC-in terms that privi- leged their own skills and attributes. The senior generation defended the status quo of informal, compromise-oriented arbitration close to business and the lex mercaroriu, insisting that only very experienced and scholarly individuals, selected on the basis of their excellent legal careers, had the stature and judgment to resolve such cases.35 A younger generation criticized the vagueness and uncertainty of the lex mercatoria on scholarly grounds and emphasized the vital importance of technical sophistication about arbitration.36 The technocrats argued that arbitration could only be successful and legitimate if practiced in a more legalized fashion.37 Common law lawyers bolstered the technocrats by adding their criticisms of the vagueness of the academic lex mercururia that was supposedly being applied by the Continental academics, and they hinted strongly that the English commercial court was a better forum for commercial di~putes.~R Continental

35. See, e.g., Lalive, “Enforcing Awards,” in ICC, Sixty Years 317 (cited in note 1). The arbitrator “will no doubt be anxious to make sure . . . that ‘the award is enforceable at law,’ but he will be preoccupied much more with obtaining a conciliation, or an award acceptable to both parties and which does not jeopardize the resumption of their business relations” (id. at 349). And to become an arbitrator, “a great amount of time is necessary to acquire the experience and know-how apt to create this confidence which is the key toward voluntary enforcement of arbitral awards” ( id. at 352). Lalive is recognized as one of the leading arbitrators and scholars of the senior generation.

36. See, e.g., J. Paulsson, “La Lex Mercatoria dans I’Arbitrage CEE,” 1990 Revue de 1’Arb. 55 . “The power to apply the lex mercatoria can be a recipe for amateurism and arbitrariness. Nothing is easier than to proclaim common principles on the basis of a limited and superficial personal acquaintance”; id. at 68 (authors’ translation). Paulsson is perhaps the leading arbitrator of the younger generation.

37. See, e.g., the criticisms in Carbonneau, Lex Mercatoria (cited in note 31). 38. See, e.g., M. Mustill, “The New Lex Mercatorin: The First Twenty-Five Years,” in M.

Bos & I. Brownlie, eds., fiber Americorum for the Rt. Hon. Lord Wilberforce 149 (1987) (Arbi- tration is no longer simply the “pacific settlement of disputes” (id. at 181). It requires sounder “foundations,” especially in case law (id. at 182)); M. Kerr, “Commercial Dispute Resolution:


academics, in turn, emphasized the importance of arbitration detached from any national laws and legal systems.39

Most significantly, however, American litigators-whose domestic power was just becoming established-insisted in this domain that the arbitrators needed to pay more attention to the facts, indulge more motions and adversarial behavior in the interests of their clients, and in general allow the litigators to employ their legal weaponry as if they were arguing in a US. court. They promoted the idea that arbitration could serve legitimately for international business transactions only if it became a courtlike substitute for national (meaning, to them, U.S.) courts.40

Each group, in short, competed with theory and practice on behalf of the characteristics that its members had to offer to resolve international business disputes.41 The already-established prominence of international commercial arbitration led them to play within the rules of the arbitration field rather than to challenge it directly with some newly minted and defined pr0cess.4~ They promoted their visions and theories of arbitration as what arbitration was and was supposed to be-in particular, offshore litigation on the side of one major group, a compromise-oriented academic affair on the other.

As it turned out, an alliance between the U.S. litigators and the technocrats gained the upper hand, although the other groups remain far from absent, and the competition continues. The champions of formalism succeeded in part because they promoted a kind of arbitration that could process more cases than could be handled by the charisma of the grand old men. They also succeeded because they were allied with the US. litigators empowered both by the resources of the large law firms and the powerful clients who employed those firms.

The Changing Scene,” in id. at 11 1; “the world is losing sight of the real purpose of commercial arbitration. . . . its outcome should be rationally predictable, according to legal principles” (id. at 130).

39. See, e.g., B. Goldman, “The Complementary Roles of Judges and Arbitrators in En- suring that International Commercial Arbitration is Effective,” in ICC, Sixty Years 255 (cited in note 1). “One might even be permitted to think that it is that view of the ‘detachment’ from national laws, which appear to them [business persons] insufficiently adapted to the specific needs of international trade, which encourages these international traders to entrust the settlement of their cases to arbitrators rather than to national jurisdictions.” Id. at 265.

40. See, e.g., Lillich & Brower, International Arbitration in the 2 1 s t Century: Towards ‘Judicialization’ and Uniformity! (cited in note 3) (the full title tells the story).

41. And while somewhat less successfully, arbitrators from Third World settings argued that what was essential to the legitimacy of arbitration in Third World settings was more participation by arbitrators from outside of Europe and North America. See, e.g., S. Asante, “The Perspective of African Countries on International Commercial Arbitration,” 6 Leiden J. Int’l L. 331 (1993). “Effective internationalization, that is the conversion of an essentially Western system to a truly cosmopolitan or international system is necessary to inspire the confidence of African states.” Id . at 348.

42. It is important to see that the particular strategies adopted to promote one group or another were adopted only in relation to the positions that were already taken in the game.


International commercial arbitration therefore became something very different from what it had been in the 1950s and 1960s. The center of power shifted from the small group of Continental academics to the US. law firms and their allies. Despite this important shift, however, it is important also to recognize the continuity. The International Chamber of Com- merce remained the central institution, even though redefined by battles fought from within the institution. The practice of appointing private individuals to serve as “arbitrators” charged with deciding the cases also continued, but “international commercial arbitration” undeniably changed fundamentally from 1970 to 1990.

During this period of intense competition, furthermore, there was also cooperation. All the players in this field-and those who wanted to be taken seriously in the field-continued in their writing and activities to promote “international commercial arbitration” as the preferred method for resolving transnational business disputes. They adhered to the rules of the game while they fought to modify the rules to favor the position or positions that they occupied. Indeed, outsiders impressed by the public shows of una- nimity about international commercial arbitration might believe that the members of the club were united around a stable set of practices.

On the contrary, practices were not stable, and as the practice of arbitration changed, so finally even the accepted definition of arbitration changed so as to define an almost entirely different process. The terminology-now reified in many scholarly publications and definitions-reflected the change in practice and in the balance of power. We now tend to accept the fact that international commercial arbitration is simply a quasi-judicial form of dispute resolution that substitutes for national courts but not courtlike processes.43 The point, to repeat, is that we should not accept the latest scholarly representation as the essence of arbitration-as if such a thing existed in the abstract. The definition is but the linguistic evidence of the power of the promoters of that particular representation of international commercial arbitration. They played within the rules-established by the pioneers who built up the modem institutions-until they succeeded in redefining the game and the key institutions.

The legitimacy of international commercial arbitration is no longer built on the fact that arbitration is informal and close to the needs of business; rather legitimacy now comes more from a recognition that arbitration is fd and close to the kind of resolution that would be produced through litigation-more precisely, through the negotiation that takes place in the context of U.S.-style litigation. Litigators, in other words, maintained the name of international commercial arbitration, but they appropriated it as a place for the practice of large commercial litigation.

43. E.g., Lillich & Brower, International Arbitration (cited in note 3 ) .


It may be tempting to point to similar trends and examples of the role of litigators in other practices termed arbitration44 and mediati0n.4~ A sim- plistic reading of these stories would be that legalization and formalization is inevitable, or at least inevitable “once lawyers get involved”-or at least once U.S. litigators get involved. More accurately, however, the competition that produces such a move or countermove to legalization stems both from external factors and from the activities of a range of entrants in the market, each arguing in effect that what it offers merits the name of arbitration (or mediation). Lawyers may participate, but the victory of one or another of those who play “legal cards” can only be determined after close study of the conflicts (and complementarities) that define the field and provide the dynamic for change.46

B. Mediation Practice in the United States

Mediation and arbitration are words that do not describe dispute resolution essences, and there are contests over what is represented as legitimate in the terminology and the practice. International commercial arbitration, as we have noted, has evolved into a relatively adversarial, formalized and legalized variety of offshore litigation. While the development of mediation is much more recent, and therefore the evolution is more difficult to study, we can draw on our interviews and readings to offer some preliminary analyses of how mediation practice is proceeding out of a similar competitive- and at the same time cooperative-process.

44. For example, arbitration of securities claims has become more “courtlike,” according to the director of arbitration for the National Association of Securities Dealers (NASD): “The influx of attorneys has brought legal language and court procedures into the process. . . . There’s more scrutiny of arbitrators. It’s much more contentious than it used to be 10 years ago.” Suzy Hagstrom, “Investors put Stock in Arbitration,” Orlando (Ha.) Sentinel, 28 Feb. 1994, p. 14, quoting NASD arbitration director Deborah Masucci. See also S. Chartrand, “N.A.S.D. Experiencing Delays in Arbitration,” N.Y. Times, 13 Aug. 1994, sec. 1, p. 36 (“The process of securities arbitration has become increasingly complex in recent years, with more and more cases handled by lawyers instead of the investors themselves”). Mediation is now being used in some securities claims, and the NASD recently initiated a mediation program. Antilla, N.Y. Emes (cited in note 10).

45. See Craig McEwen, Lynn Mather, & Richard Maiman, “Lawyers, Mediation, and the Management of Divorce Practice,” 28 Law B Soc’y Rev. 149, 176-81 (1994). “Rather than placing decisionmaking exclusively in the hands of parties, mediation permits, even strengthens, the ability of lawyers to influence decisions.” Id. at 183.

46. The range of products with the same “name” serves a further function. I t allows a stratified market to pretend to offer the same service universally, while in practice offering very different services to different clients with different amounts of resources and stakes in an outcome. There may be almost nothing in common between high stakes mediation and small claims mediation other than that the same general term is used on the basis of an assumption that mediation means the same thing in all cases. As noted before, our own study is only of medium and large stakes business disputing.


Some commentators have already lamented the proliferation of manu- als for lawyers on how to win mediation,4’ and there are already many examples of mediation for ordinary and high stakes lawsuits that suggest a move to legali~ation.~~ As with respect to arbitration, however, it is important to explore the details of a competition that is both symbolic-about what mediation is and should be-and material-who gets the business. Academic analyses, as with respect to arbitration, are resources in the competition.

The starting point is again the initial success of pioneers, this time in legitimating “mediation” as a process for business disputes. As with respect to international commercial arbitration, the early efforts of the idealists created the field well before it became obvious that there existed any real business demand. In the late 1970s, in the early stages of the boom in business litigation that lasted well into the late 1980~,4~ some moral entrepreneurs close to business were already searching for ways to beat the “high cost of litigation” experienced by large corporations. There were a number of potential candidates floating around the business and legal worlds. The “minitrial” was one of the first to gain attention.50 The American Arbitration Association (AAA), which promoted a relatively informal and inexpensive process, also offered its dispute resolution services, especially its own style of “arbitration,” to avoid litigation. Indeed, arbitration was almost synonymous with the AAA. But neither minitrials nor AAA arbitration caught on to a great extent with major corporations. They did not effectively challenge the hegemony of corporate litigators.

The reasons for the lack of success are not easy to find, but it does appear that the AAA was in part a victim of its success in reaching and dominating the market for relatively small commercial cases. I t could not adapt quickly and effectively to the interests of the in-house counsel trying to find a mechanism that could gain acceptance for large cases and serve their particular needs. Similarly, in-house counsel may have felt the minitrial was too much under the control of the litigators, who were increasingly recognized as a prime source of the problem. Interestingly, therefore, rather than new competitors trying to reshape AAA arbitration or refine litigation to better suit the new evolving concern with the high costs of the litigation arms race, the subsequent changes were led to a great extent under a differ-

47. Menkel-Meadow, “Pursuing Settlement in an Adversary Culture: A Tale of Innova- tion Co-opted or ‘The Law of ADR,’” 19 Fla. St. L. Rev. 1, 2 (1991).

48. A Center for Public Resources video released in 1994 in high-stakes mediation, using Northwestern Law School professor Steve Goldberg as the mediator, emphasizes the way that he provides an “expert legal opinion” as part of the mediation process.

49. See, e.g., M. Galanter & T. Palay, Tournament ofhwyers (1991); W. Nelson, “Con- tract Litigation and the Elite Bar of New York City, 1960-1980,” 39 Emory L.]. 413 (1990).

50. See Center for Public Resources, Corporate Dtspute Management (1982).


ent banner-the banner of mediation, again a term with a long pedigree and the possibility of many different meanings and practices.

The most successful entrepreneurs, therefore, were those who were able to offer a product and construct a representation that would be distinguish- able from both litigation controlled by litigators and arbitration controlled by the AAA (or, internationally, by U.S. litigators). Mediation provided a good candidate since, as noted above, it could draw on a process somehow linked to a long historical pedigree,51 an emerging psychological literature that was gaining some allies against adversarial processe~,~~ and an ideal of consensus. Mediation, as it turned out, provided a banner for the entrepreneurs and idealists to rally-and also compete-under, and the pioneers succeeded in marketing to businesses through such entities as the Center for Public Resources (CPR). Its “pledge,” adopted by corporate sponsors, to explore alternatives to litigation, and its list of prominent legal notables willing to serve as “neutrals” in business disputes, no doubt helped gain a place for large stakes mediation. Mediation gained legitimacy in part from the names that were willing to be associated with the term.

Interestingly, many of the arguments found in the pioneer days of international commercial arbitration-speed, informality, ability to mend broken relationships, proximity to the needs of business-were available this time around to boost the fortunes of mediation and its promoters. For- mal litigation could be portrayed again as the problem, and as international commercial arbitration and large litigation both became increasingly adversarial, there was a space to push an alternative denominated mediation. Ac- ademic theorists, explaining the limitations of litigation and the value of mediation as an alternative, played key roles in building this new area of p~actice.~3 They helped define and legitimate the field of mediation as acceptable for use by lawyers and in-house counsel.

The boost to the new idealist entrepreneurs came from a combination of in-house counsel, who had only recently gained prestige and organizational strength, and judges who were dissatisfied with the role that litigators had created for them as well. Judges sought to regain some control through court-annexed ADR and moves to adopt aspects of the multidoor court- house. These areas are now flourishing. Some judges, however, went out the doors, retired, and joined forces with the in-house counsel to both create and satisfy the early demand for mediation of large business disputes.

51. The importance of links to the past and the legitimacy of history to innovation in legal practice is evident in the story of arbitration as well, and even in the reinvention of the term taken from the Middle Ages, the lex mercatoria.

52. The early success of mediation came especially in the area of family and divorce matters, which further promoted academic writing about the virtues and character of mediation. CPR began its own ADR with the minitrial, but it was drawn into mediation for business by its sponsors.

53. The early editions of the casebooks and nutshell in note 6 exemplify these early efforts.


In addition, the early success and structure of the coalition related to external factors that affected the relative power of the potential competitors, including litigation and arbitration. As we have suggested elsewhere, the prestige and success of international commercial arbitration in Paris helped break down the hostility of the courts to private justice in the United State~.~4 Once the courts were willing to allow and promote private alternatives, the alternative closest to the international practice was not the most successful in the U.S. institutional terrain. The niche between litigation (a practice owned and controlled by the litigators) and arbitration (essentially owned in the U.S. by the American Arbitration Association) was filled successfully by the academic and practitioner promoters of mediation.

Once the niche was created, new entrants moved into the field, and many of them tried to gain credibility consistent with the new favored process-mediation. As we have seen with respect to arbitration, the entrants in the field competed partly in terms of the legitimacy of the field. They also argued about what mediation was and was supposed to be in theory and practice. They also competed according to the symbolic capital that each possessed. The competition in the United States is in full bloom now, and we cannot predict future developments, but it is useful to try to map the various competitors in relation to their positions and the symbolic capital they possess. It is a somewhat different array of competitors than was found in the situation of international commercial arbitration, except for the U.S. litigators, but the process of competition is quite similar.

Those with no legal training, we suggest, promote pure mediation or the expertise that comes from training or experience in mediation. They argue that mediation works well only if the mediators focus entirely on the technique of bringing the parties to a voluntary resolution. Since the mediators have only this expertise to offer, that is the only product they can promote. And as mediation develops, the emerging cadre of mediation ex- perts offer their technical expertise in all the potential processes that can be called mediation, or even ADR. Retired judges, on the other hand, have not felt the need to promote themselves very actively, since what they offer has fared very well given the prestige of the judiciary.55 Those who market the retired judges-including JAMS (now JAMS-Endispute, a for profit provider), for example-argue that the prestige and the legitimacy of the

54. Mitsubishi Motors Corp. v. Solar Chrysler-Plymouth, 473 U.S. 614 (1985). See Dezalay & Garth, Dealing in Virtue ch. 8 (cited in note 2).

55. The market strength of former judges in high-stakes business mediation and arbitration is supported by a recent National Law J o u d article, which states that “ex-judges . . . are still the most popular choice, largely because clients want an approximation of what they get in court” (Donovan, Nat’l L.J. (cited in note 4)), and by James Henry of CPR, who stated that judges are still “the preferred resource for neutral roles in ADR” (N. Varchaver, “Dispute Resolution,” Am. Lawyer, April 1992, p. 63). Of course, this can change and may even already have changed if mediation is defined more as a process and set of institutions than in relation to the particular individuals who serve as notable mediators.


retired judges are necessary to gain the confidence of the parties and that retired judges are especially adept at making parties understand and come to terms with weaknesses in their legal cases that would have been important to a judge or jury.56

Lawyers and others who compete with retired judges emphasize that judges are not trained or suited by temperament to practice “pure” mediation.57 They try to turn the judges’ background and expertise in adjudication into a liability, arguing that judges by temperament or habit are not well suited for a consensual process. And business litigators-as seen with respect to international commercial arbitration-try to ensure that the mediation process provides maximum play for the arguments and skills in mo- bilizing documents that characterize US.-style litigation. They also emphasize their expertise in choosing forums for particular disputes and their ability to fight-litigate-if the mediation faik5R They insist that mediation, like arbitration, is merely one process that they can master and use in appropriate cases in the interests of the clients.

This competition can be found in the statements made in scholarly articles and in materials that discuss the virtues of particular kinds of mediat0rs.~9 Competition within the mediation movement can also be found in efforts to create new institutions and to control ones that have

56. As one dispute resolution expert observed, “there are some mediators whose primary stock in trade is to give the parties a preview of the likely outcome if they litigate the matter.” From the perspective of a retired judge, this is an advantage: “as a mediator 1 very often evaluate a party’s legal position. They say this is our position, and I say it will never fly. You’ll never convince a judge of that. Non-lawyers can’t do that. And of course even lawyers aren’t taken seriously when they do that. But when a former judge says it, they listen a little more intently.” Others, as noted before, criticize the practice and suggest that judges are “often ill- suited” to the “friendly persuasion that is the key to arbitration,” Donovan, Nat’l L.].

57. A proponent of this more pure-and closer to business-mediation noted that when judges mediate, they act upon the principle that “the judge knows more than anyone else.” A good mediator, in contrast, acts on the assumption that the “parties know more about the case than anyone else.” The mediator must “find out what each party will do, then get them to move.” Mediation is about “the art of the possible.”

58. A growing number of litigation lawyers have thus found ways to turn ADR into an opportunity to create and market another profitable expertise. S. Dick, “CPR Survey: Law Firm ADR,” 13 Alternatives 57 (1995) (“One of the key findings of the survey, which looked at 124 leading law firms, was that the firms have integrated ADR into a broader spectrum of practices than many people suspected”). William K. Slate 11, “Arbitration Comes of Age,” Am. Lawyer (Supp.), May 1995, p. 10 (listing 42 law firms with “ADR Practice Groups”). A prominent litigator thus stated, “one day you will get to the table anyway.” Clients “want to know when they should fight and they want to know when they should not fight.” His point was that expertise in “the nuances of A D R could be used to get the matter settled: “[Elach dispute has a level of options,” including mini-trials, mediation, or a variety of other approaches, and the litigator expert in ADR can help the client select from the options. People will come to a law firm when they have a problem. They need to understand what their options are. And each dispute has a different level of options. . . . [ Ihere are some things you cannot use ADR for. . . . The tougher the person with the tougher position frankly is not going to go to an arbitration company or ADR company. He wants to know what all his options are. So he goes to a lawyer.“

59. E.g., E. Pollock, “Arbitrator Finds Role Dwindling as Rivals Grow,” Wall St. I., 28 April 1993, p. B1.


come to play a role in mediation. Without going into detail, we note that the creation of the ABA Section on Dispute Resolution can be seen both as an assertion of power by the legal profession over mediation (and alternative dispute resolution generally) and an effort to use the mediation banner against traditional litigators who resisted or sought too obviously to control the move to ADR. Similarly, there are many examples of competition between AAA and CPR, including the construction of lists of “notables” and “rules” for mediation, and there is competition between the nonlawyer mediators well represented in the Society for Professionals in Dispute Reso- lution (SPIDR) and the various legally oriented institutions. Some of these conflicts can be seen, for example, in the effort of the AAA, ABA, and SPIDR to draft a Code of Ethics for Mediators; and by the criticisms of CPR of that effort. At the same time, with an approach similar to the litigator- specialists in all forms and forums, there are mediators who promote their support for whatever process the parties wish to choose. Indeed, they may form alliances with the litigators now converted into ADR specialists.

Again, however, despite the competition, all these stalwarts of the “mediation community” tend to unite in support of “mediation” as a process well suited for business (and other) conflicts, making the competition somewhat muted and coded. There is considerable cooperation as well as competition, even if cooperative efforts often turn into competition.60 Groups that can agree about the need for rules, or training, or publications, for example, will nevertheless try to shape the output to legitimate their particular attributes and approaches.

The example of mediation, therefore, reveals many of the same features as the story of international commercial arbitration. There are also some notable differences, including the fact that the developments in institution- alizing mediation as a means of resolving business disputes are much more recent and unsettled. In addition, we can see that in Europe the proponents of international commercial arbitration practically created the institutional network that supported the growth of international commercial arbitration. The International Chamber of Commerce was not the most obvious candidate. There were strong national arbitration systems, including especially those existing in England and in the United States, but they were not ini- tially very important or successful with respect to the international arbitration business.

In contrast, the domestic U.S. story of mediation reveals more of an emphasis on taking over and transforming existing organizations and sets of practices. Mediation has become a major aspect of the work of the AAA, the courts, and litigators. Mediation has fueled the rise of CPR and other relatively new institutions, but the work of the newcomers has been more in

60. There is also competition for the most eminent mediators, who generally can build links with all the major institutions and therefore diversify their own portfolios.


finding a place for mediation and ADR within the existing practices of courts, litigators, businesses, and arbitration institutions than in administer- ing or handling the cases themselves. In addition, while arbitration developed with the strong imprint of the Continental professors and their disdain for overt competition, mediation in the United States has been somewhat different. Scholarship is part of the competition in mediation, but there are also more open and explicit marketing strategies. International commercial arbitration, with a somewhat different institutional makeup and history, is a field with a greater emphasis on learned contributions as essential aspects of a potential arbitrator’s capital.

These two case studies are meant to illustrate the conflict and competition-and cooperation-that promotes change in the meaning of the processes, the actual conduct, and the institutions. The process both develops and satisfies a business demand. We should emphasize, however, that our reconstruction from the present into the past necessarily oversimplifies substantially. It also must be particularly tentative with respect to mediation, which is still very much open and contested terrain. In retrospect, indeed, the success of certain members of an avant gar& in law, as elsewhere, often comes to seem natural, but that naturalness obscures other potential paths and the failures of most of the entrants in the competition. In short, these social constructions of the legal market of business disputing (which also shape the economic market) were the results of processes that certainly could have turned out differently-and may still change in major respects.

IV. THE MARKET OF DISPUTES AND THE MARKET OF JUSTICE

The extended examples of international commercial arbitration and mediation are small parts of a much larger picture. The larger picture relates first to the broader markets of disputes and for justice. Moreover, the battles within the subfields and within the transformed categories and interpreta- tions do not take place by themselves. They take place in accordance with more macro-level social and economic transformations. In Bourdieu’s terms, the system of positions shaped within a field relates to the position of the field within the hierarchy of fields and larger social space. The external changes lead to revaluations, devaluations, and substitutions of the social capital that is embedded in or represented by people. The people may stay the same, but their capital may have different values, leading to different strategies. As suggested below, the treatment of individuals as “social combi- nations” is a key to understanding the story of the relationship between the law of the courts, the state, business, and family and other informal networks, all situated also in the world of economic power. This section of the


article will step back from the case studies to suggest how they might be situated in the larger context.

The processes called mediation and arbitration, for example, develop in relation to the courts and the prevailing judicial methods of resolving disputes among business actors. They do not develop simply from innovators acting in isolation. And the combination of factors that causes the development of these “alternatives” serves also as a means to force change in the courts and their prevailing conceptions of how to resolve business disputes.61

The competitive pressure of the alternatives leads the courts themselves to enact reforms designed to attract this prestigious business. Also, perhaps more important, lawyers promote these reforms and the interests of the ordinary courts for their own purposes. Generalist lawyers try to get the disputes out of relatively private sectors-including specialized courts-into places where they can proceed without specialized networks and skills. There is almost inevitably a reaction by the promoters of ordinary courts arguing against private dispute resolution unaccountable to the public justice system, and such reactions may lead the courts to try to adopt enough of the practices to gain a stronger position of oversight or a larger market share. The basic point is simply that there is not only competition within what is called arbitration or what is called mediation. Each is part of one loosely connected system. It is not surprising, therefore, to find such “reactions” in the courts as specialized procedures for business disputes,6* efforts to keep the resolution of business disputes confidential, limitations on dis- covery and pretrial procedures, and promotions of alternatives under the control of the regular courts. Empirical research would reveal the same kinds of processes and factors at work in these transformations as well.

Similarly, promoters of arbitration institutions respond to the concerns that make mediation appear to gain a growing market share. The Interna- tional Chamber of Commerce, for example, has focused considerable attention on its own mediation rules and on “fast-track” a rb i t ra t i~n ,~~ and some prominent arbitrators connected to the ICC now also appear on CPR and presumably other lists as potential mediators. The AAA, responding to CPR, has placed a greater emphasis on mediation and developed new panels

61. This relationship is discussed in J. Resnik, “Many Doors? Closing Doors? Alternative Dispute Resolution and Adjudication,” 10 Ohio St. J. Disp. Resol. 211 (1995). Our approach contrasts with that of Judith Resnik by emphasizing the relationship of the arguments for and against various alternatives to the strategic positions of the proponents and critics.

62. See, e.g., S. Dick, “Special Courts Now Handle Business Cases,” 12 Alternatives 97 (1994); M. Geyelin, “Delaware Plans Streamlined Court for Business Disputes,” Wall St. J., 10 Dec. 1993, p. B3. One innovation made public judges eligible for private dispute resolution. K. Johnson, “Public Judges as Private Contractors: A Legal Frontier,” N.Y. Times, 10 Dec. 1993, p. D20.

63. See, e.g., A. Rovine, “ ‘Fast Track‘ Arbitration: A Step away from Judicialization of International Arbitration,’’ in Lillich & Brower, lntmtional Arbitration 45 (cited in note 3).


of notables for large and complex cases.@ And many in the international arbitration community can respond that arbitration has always incorporated techniques of mediation.65

All this competition takes place in the market for business disputes and the market for justice. The different participants, as we have noted, bring different perspectives and approaches, implicate and change different institutions, and affect not just the market but also the structure of legitimate authority. As we have suggested, it is sometimes difficult to decode the competition without detailed empirical inquiry. What appears on one level to be about whether businesses use mediation, arbitration, or litigation (or something else) appears at another level to be about changes within those processes and in relation to one another. But ultimately at stake are the rules of the game for business and the legitimate authority to decide business disputes. The market for justice transforms the meaning of justice and the rules for resolving business disputes.

The various dispute resolution offerings-however termed-can be placed with respect to several kinds of ideal types. They can be close to business or close to law, for example, depending on the role of legal reason- ing, legal authority, and the connection to the courts. If close to business, relying more on the relative power of the disputants or some effort to find business norms outside of law, the results will not necessarily be the same as would come from processes in which law and legal capital dominate. It is true that the most powerful tend to win over the long term whether the process is characterized by the dominance of law as the form of legitimation or by a legitimacy grounded only in “consent,” but there can be important differences in individual cases. Furthermore, the guiding principles or ratio- nales used to legitimate will affect more generally the relationship between business conduct and the law, and it will in the same way also affect the role of the legal profession in business relations.

We can see in the history of international commercial arbitration a move from particularized dispute resolution toward formal law and especially the legal practices of large firm litigators-big litigation as a way to formalize. Perhaps in contrast, the recent mediation movement seems to pull back somewhat toward an orientation toward business, although the litigators and law remain very much in the picture. It is too soon, however, to see where the competitive processes will lead.

64. It is revealing, in addition, that the two presidents named recently to the AAA have come first from an in-house counsel and then from court administration, responding in the latter case to the many court-controlled ADR programs.

65. “And the Europeans feel that, beyond the catchy acronym, there is really no new substance but merely a slick repackaging of conciliation and mediation methods-which they have been practicing all along in appropriate cases.” J. Werner, “ADR: Will European Brains Be Set on Fire?” 10 J. Int’l Arb. 45 (1993).


In examining the changing rules of the game for business disputes, it is also important to consider the role of the state. So far we have kept our analysis focused on only business and the law, and neither of the case studies has revealed a central place for activities focused on the state. In large part, this is because these processes have developed in the direction of privatizing business dispute resolution. International commercial arbitration allowed Western businesses to use private contract rules to enforce their agreements with countries of the South, especially among the oil producing nations. Mediation in the United States has in many respects followed on the idea that the regime of contract shapes the governance of business disputes. We should not presume, however, that business disputing will necessarily continue to move in this same direction.

Recently, in fact, it appears that some of the dispute resolution devices created under NAFTA and GATT, for example, may provide a particular role for the state fighting on its own behalf and also on behalf of businesses trying to gain a competitive advantage through anti-dumping and similar actions. The machinery called for by these and other agreements, whether called mediation, arbitration, specialized litigation, or something else, could come to be characterized by an emphasis on political rather than legal capital-for example, arbitrators who are distinguished mainly by their govern- mental experience, advocates who are distinguished by their political connections and judgment. If that were to be the case, then the norms governing business competition and conflict-at least when it can be cast in terms of dumping or antitrust violations-will be closer to the perspective of the state (which of course could still have a legal dimension).

This example is not meant to describe what will happen, but it can illustrate that much more is at stake in the competition than simply mediation versus arbitration or the success of particular mediators or arbitrators. Also implicated is the role of the state in business, and that of business in the state-as well as the role of law in relation to business and the state. The New Deal, it will be recalled, brought a halt to the trends favoring private justice that had developed in the early 20th century.66 The state became a greater player, both in the new administrative machinery and later in the courts.

The contending groups at the high end-for positions in the leading institutions and forums, whether international commercial arbitration, mediation, GATT, or something else-compete both as merchants and as moral entrepreneurs, insisting that the traits that they embody are necessary to the legitimacy of the process. They thus compete “symbolically” on behalf of themselves and the groups that they represent, and they also compete in more or less open terms for the business itself and for control of the relevant institutions. The processes are not unimportant, nor are the

66. See J. Auerbach, Jwtice without Law (1983).


changes that take place within the processes; but it is essential to see that more is at stake in the competition. The competition is part of a continuing process that, in relation to events that take place outside of the field of dispute processing, leads to changes in the role of law, business, and the state in the regulation of business relationships.

The Competition, therefore, can be seen as allowing the processes of dispute resolution to “keep up” with the social forces that take place “outside.” It would be misleading, however, to end with this oversimplifica- tion, which makes the developments in dispute processing seem less important. We must emphasize that even developments “outside” take place in relation to the processes that exist. Thus a move toward more business control of business dispute resolution, for example, occurs in part because lawyer control became very expensive and akin to an arms race. Existing categories, definitions, and institutions are in part constitutive of debates about the relationship between law and business.

Finally, the details of the results of the competition, leading to new practices and institutions, are important in their own right. More than merely adaptations to new social developments, they constitute the settings in which future business conflict will be channeled and also the particular rules of the game under which it will be administered. They thus help to define the legitimate role of business and the use of economic power.

V. CONCLUDING NOTES

Our first conclusion is a simple one that is so often neglected that we restate it at the outset. We must recognize the irony of lawyers and especially large firm litigators-and academic allies-who argue that mediation is by definition less expensive than arbitration, quicker, or better adapted to preserving long term relationships. The litigators succeeded in transforming international commercial arbitration into a process resembling adversarial, U.S.-style litigation, and while they have embraced mediation because of the power of in-house counsel, they are no doubt continuing to work to shape mediation to suit themselves and to make sure that they remain key players in business dispute resolution. That does not mean that mediation is inevitably going to move in one direction or another; but it means that we must try to understand the forces and the dynamics of a competition that produces and is captured in self-serving definitions. It also does not mean that it would be better if lawyers stayed out of mediation. Whether business relations should be governed by a system closer to formal law or closer to some kind of business norms is certainly debatable. We only point out that some competitors are very close to business and others are closer to law- and that the processes are not naturally one thing or another.


Second, scholarly theory is one of the important resources in the competition, whether or not scholars are themselves competing for business as well as scholarly recognition. This is not to say that only scholarly theory is important. The point is that in contests about what is acceptable as legitimate, or what is the acceptable or legitimate representation, scholarly theory can be a very significant resource. Theorists make sense out of practice or what they assume practice to be, but by doing so they inevitably privilege some practices and disfavor some others, depending on how they frame their presentation or whose side of the story they accept. The situation is even more complicated where the academics are also practicing mediators or arbitrators (or lawyers), since they will naturally tend to theorize out of and in relation to their own positions as practitioners, or try to conform their practices to their theories. Again that does not mean that the scholarly writing is done for the purpose of promoting success as a practitioner, although that can be the case. It means only that their views will be partial in both senses, tending to define the categories according to their own positions. An expert in the latest technologies of mediation is unlikely to argue that mediation is more legitimate if handled by retired judges who have not made such an investment.

Academics, we contend, can be better theorists if they consider their own place in the field of business disputing or more generally in the legal field. Given the central importance of the competition at the core about the categories and definitions, in addition, scholars who study the construction and legitimation of institutions, including the neo-institutionalists, and scholars who study professional competition more explicitly, must make a place for the role of contests about theory in the struggles at the frontier of practices, institutions, and rules.

This story of business disputing, moreover, is also the story of law. The continual updating of law takes place both in tandem with economic and social relations and according to particular conflicts expressed in terms of the legitimacy of the law. Old categories come to have new meaning in a process akin to that seen especially in international commercial arbitration. The gaps between theory and practice help facilitate this updating, since it contributes to a division of labor under which academic competition helps to legitimate changes in practice. Too much change would no doubt under- mine the legitimacy that is built to a great extent on long term stability; but a too successful and therefore ossified legal science would prevent law from staying up with economic and social relations, pushing law away from the regulation of business and the ~tate.~7

We contend, in sum, that the varieties of processes and the characteristics of the persons and institutions that handle the disputes are important as

67. As happened in Europe under the legal gerontocracy only recently disrupted by internationalization.


social phenomena, and they must be examined systematically as part of a changing landscape of dispute resolution characterized by intense competition. Some of the competition is overt, but there is a more or less veiled symbolic competition between persons marching under one or another banner and among persons and institutions competing for legitimacy. The competition must be decoded in order for its implications to be understood.

Individuals and groups take positions that relate to their symbolic capital, which is what they bring and have to offer. They seek through their brochures, their organizations, and even their scholarly publications to make the processes-however they are termed-require what they have to offer, whether it is legal expertise, the experience of a long career, training in mediation technique, an ability to play in multiple forums and processes, or business expertise; and they act to shape the established institutions to reflect their concerns and approaches. Individuals, furthermore, may have diversified portfolios, allowing them to emphasize different factors in different settings, and to shift in relation to shifts in the market value of particular kinds of symbolic capital.

If sufficient persons and institutions come to accept that mediation or arbitration is by definition a forum with the characteristics that fit what one group has to offer, such as arbitration as a “judicialized” substitute for litigation in national courts, that is because of the success of the group, not the essence of the form. Beyond the question of who in relative terms is winning and losing, and why, however, are much more fundamental social concerns. The landscape of dispute resolution is constantly changing in relation to internal competition and what can be seen as external events and trends. The details of the stories of arbitration, mediation, litigation, and other potential means of handling business conflict are critical to an understanding of the relationship between law, the state, and business.68 When understood, they can provide keys to understanding how the “rules of the game” are shaped for business relationships.

~~ ~

68. It should be clear that while we have used the general terms business, law, and state, some groups have more power to shape what is “meant” by each of these categories.

Fussing about the Forum: Categories and Definitions as Stakes in a Professional Competition

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