At a Pepperdine University School of Law conference in Malibu, Calif., a Boston litigator and a prominent alternative dispute resolution organization are rolling out a model contractual agreement that companies can use to limit litigation costs.

The model economical litigation agreement, colloquially known as a “litigation prenup,” will debut today at the conference, entitled “American Justice at a Crossroads: A Public & Private Crisis,” hosted by Pepperdine’s Straus Institute for Dispute Resolution. Pepperdine spokesman Jerry Derloshon said about 125 participants are registered.

Daniel Winslow, a Boston partner and litigator at Philadelphia’s Duane Morris, developed the model agreement with help from the International Institute for Conflict Prevention & Resolution (CPR Institute). Ideally, companies would incorporate the model agreement into contracts with partners, suppliers and customers at the start of the business relationship, he said.

Winslow said he formally pitched the concept to the CPR Institute’s board last year. Since then, he’s been fine-tuning the concept with an informal focus group of in-house attorneys from such companies as Abbott Laboratories, Bechtel Group Inc., Cisco Systems Inc., General Electric Co. and Microsoft Corp.

Winslow is known for his recent role as chief legal counsel for the campaign of U.S. Senator Scott Brown, R-Mass., which culminated in a Jan. 20 win for Brown.

But the germ of his idea of limiting litigation costs for companies embroiled in commercial contract disputes dates back to Winslow’s tenure as a Massachusetts trial court judge from 1995 to 2002.

The model agreement includes a mandatory prelitigation dispute resolution section, which includes a clause calling for executives to negotiate directly with each other. “It’s amazing how often companies end up in litigation without ever actually having talked to each other,” Winslow said.

The model agreement also calls for limits on discovery, including interrogatories and requests for production of documents, that vary according to the size of the dispute. Disputes involving claims of up to $100,000 for example, would be limited to four interrogatories and five document production requests. The agreement also seeks to tie the number of depositions and informal witness interviews allowed to the dollar value of the dispute.

The limits are important for smaller disputes because litigation costs can “far exceed the profit margin for a smaller contract,” Winslow said. “It’s very important that the process for resolving disputes about a contract bears some relationship to the value of the contract.”

The contract also calls for an economical litigation agreement arbitrator to manage discovery in the case. The use of an arbitrator to enforce a discovery contract is one of the agreement’s major innovations, Winslow said.

via Law.com – ‘Litigation Prenup’ to Be Unveiled at Pepperdine Conference.