Economical Litigation Agreements

In 2009, CPR assembled a group to explore Economical Litigation Agreements (ELA) as a means of reducing civil litigation costs.

A means of containing civil litigation costs, ELA is a hybrid of civil litigation and arbitration, whereby parties agree to use standard, limited-scope discovery procedures in lieu of conventional discovery. Ideally, companies would incorporate the model agreement into contracts with partners, suppliers and customers at the start of a business relationship.

Colloquially known as a "litigation prenup," the model agreement includes a mandatory pre-litigation dispute resolution section, which includes a clause calling for executives to negotiate directly with one another.  Currently in the testing phase, future model procedures may include concepts such as making the amount of discovery proportionate to the amount in controversy, phasing discovery to save time and reduce expenses in cases involving threshold motions, and creating cost-effective alternatives to conventional discovery.

The model agreement was fine-tuned over the course of a year by an informal focus group of in-house attorneys from Abbott Laboratories, Bechtel Group Inc., Cisco Systems Inc., General Electric Co. and Microsoft Corp. and others One of the agreement’s major innovations is the use of an arbitrator to enforce a discovery contract.

The model ELA debuted on April 15, 2010 at "American Justice at a Crossroads: A Public & Private Crisis," a conference co-sponsored by Pepperdine's Straus Institute for Dispute Resolution and the CPR Institute in Malibu, California.

Subsequently, CPR, through it's e-discovery Committee assembled a Panel of Neutrals able to handle ELA proceedings.  More recently, the Commercial part of the Courts of New York adopted a Rule 9 based on thew ork prioneered by this Committee.