Dispute Settlement: ALTERNATIVE DISPUTE RESOLUTION

Chapter 3

Alternative Dispute Resolution Systems

ExpenseExpense

Time, Cost, EmotionsTime, Cost, Emotions

MostMost LeastLeast

Trial & Trial & AppealAppeal

ArbitrationArbitration

Mock Mock TrialTrial MinitrialMinitrial

MediationMediation

NegotiatedNegotiated

SettlementSettlement

Reasons For Settlement Without Litigation• Costs

• Attorney’s Fees• Court Costs

• Personal Reasons• Compromise Is Instinctive• Dislike Of Trouble• Opinion Of Others

• Business Reasons• Bad For Business• Sympathetic Juries

Concerns with Using ADR

• Conflict with Constitution?• Legal system for the poor• Threat to common law system• May need precedent• Unfair advantage• Is it really confidential?

Types Of Negotiations

• Position-Based

• Interest-Based

Getting to YesThe Seven Elements of Negotiation

INTERESTS What do people really want? OPTIONS What are possible agreements or

bits of an agreement? ALTERNATIVES What will I do if we do

not agree? LEGITIMACY What criteria will I use to

persuade each of us that we are not being ripped off?

The Seven Elements of Negotiation (cont’d)

COMMUNICATION Am I ready to listen and talk effectively?

RELATIONSHIP Am I ready to deal with the relationship?

COMMITMENT What commitments should I seek or make?

Mediation• Third Party Assists In Resolving Dispute-

Avoid Litigation

• Parties Agree To Use

• Reduces Court Caseload-

No Judicial Review

• Settlement = Mutual Choice

Mediation• Advantage To Parties

• Determine To Pursue

• Retain Control Of Outcome

• Disadvantage• No Enforcement

• Selection Mediator- Qualifications

Mediation ProceduresMediatorMediator

Opening Statement/RulesOpening Statement/Rules

PartiesParties•View StatementView Statement•ExchangeExchange

•Discuss Options- CaucusDiscuss Options- Caucus

AgreementAgreement

Written/SignedWritten/Signed

Typical Arbitration Contracts

1) Stockbroker & Client

2) Commodities Broker & Customer

3) Brokerage Firm & Employee

4) Attorney & Client

5) Collective Bargaining6) Owner-Contractor &

Contractor-Subcontractor

7) Insurance Co. & Insured

8) Public Carrier & Shipper

9) International10) Technical cases

Arbitrators• Chosen By Disputing Parties• Expertise

• Knowledge of “Common Law Of Shop”• Beyond Legal Expertise

• Number = 1 – 3• Authority- Granted By Agreement

Arbitration• Third Party (Arbitrator) Makes Final Decision• Mandatory v. Voluntary• Final Decision (Award)- Binding• Reasons

• Quick/Inexpensive Resolution• Ease Court Dockets• Expert Assistance

Voluntary And Contract-Based Arbitration

• Parties Agree To Method By:• Original Agreement/Contract• Parties Agreement

Mandated Arbitration• States Adopting• Speeds Up Process• Many Qualified Arbitrators• Types Of Cases

• <$15,000• Specific Subject Matter

• Record Of Proceedings Required

Judicial Review Of Arbitration

• Voluntary/Contract-Based• Award Is Final• Findings Of Fact/Law- Conclusive• Limited• Correct Fraudulent/Arbitrary Actions/Against Public Policy

• Statutorily-Mandated• In Accord With Procedural/Due Process Law• De Novo• Federal Arbitration Act

Federal Arbitration Act• Enacted 1925• Revised/Reenacted 1947• Policy

• Interstate Commerce• Favors Use

• State Law- Supremacy Of U.S. Constitution/Commerce Clause

ADR Act of 1998

• Requires creation of ADR programs in the federal district courts.

Other ADR Alternatives• Combination• Mock Trial

• Citizen Review• Reality For Plaintiff

• Minitrial- Confidential• Focus On Central Issues• Back To Business Problem• 3rd Party Neutral-decision is nonbinding

Other ADR Alternatives• Summary Jury Trial

• Nonbinding jury trial

• Case Evaluation or

Early Neutral Evaluation• A lawyer with expertise in the field assists

parties in streamlining the case, and possibly arriving at settlement