Miller • Cross 4th Ed. © 2005 by West Legal Studies in ...

Miller • Cross 4th Ed. © 2005 by West Legal Studies in Business / A Division of Thomson Learning

Chapter 3Chapter 3Legal Representation andLegal Representation and

Alternative Dispute ResolutionAlternative Dispute Resolution

Miller • Cross 4th Ed. © 2005 by West Legal Studies in Business / A Division of Thomson Learning2

Roles of an AttorneyRoles of an Attorney

• AdviserAdviser – advises a client on steps to take – advises a client on steps to take to avoid possible legal problems.to avoid possible legal problems.

• DrafterDrafter – writes contracts and other – writes contracts and other documents for clients.documents for clients.

• NegotiatorNegotiator – persuades, argues, or settles – persuades, argues, or settles with another party on a client’s behalf.with another party on a client’s behalf.

• AdvocateAdvocate – presents a client’s position in – presents a client’s position in court.court.


Attorney-Client Attorney-Client RelationshipRelationship

• A client must disclose all relevant A client must disclose all relevant information to his or her attorney so the information to his or her attorney so the attorney can determine the best course of attorney can determine the best course of action. action.

• The attorney must keep the information The attorney must keep the information confidential—the attorney-client privilege confidential—the attorney-client privilege prevents a court and other government prevents a court and other government bodies from compelling disclosure of the bodies from compelling disclosure of the information.information.


Role of the CourtRole of the Court

• Search for truth is served by adversarial Search for truth is served by adversarial positions.positions.

• Dispute must be a ‘real’ dispute with a Dispute must be a ‘real’ dispute with a tangible injury or the immediate threat of tangible injury or the immediate threat of one.one.

• Court rules on questions of law and Court rules on questions of law and admissibility of evidence.admissibility of evidence.


Decision to File a Decision to File a LawsuitLawsuit

Factors include:Factors include:– Whether the law provides a remedy.Whether the law provides a remedy.– Whether the person can expect to prevail.Whether the person can expect to prevail.– Whether the expected benefit will compensate Whether the expected benefit will compensate

for expenses and other costs, including any for expenses and other costs, including any business lost as a result of the lawsuit and business lost as a result of the lawsuit and accompanying publicity.accompanying publicity.

– Settlement Considerations.Settlement Considerations.


Decision to DefendDecision to Defend Against a Lawsuit Against a Lawsuit

Factors include:Factors include:– Whether the relationship with the plaintiff is Whether the relationship with the plaintiff is

too valuable to risk.too valuable to risk.– Whether the publicity surrounding a trial would Whether the publicity surrounding a trial would

damage the defendant’s reputation or image.damage the defendant’s reputation or image.– Whether the dispute could be resolved in a less Whether the dispute could be resolved in a less

costly manner.costly manner.


The Search for The Search for Alternatives to Alternatives to

LitigationLitigation

The Search for The Search for Alternatives to Alternatives to

LitigationLitigationForms of ADR include:Forms of ADR include:

Negotiation

Negotiation

Summary Jury Trial

Summary Jury Trial

MediationMediation

Mini-trialMini-trial Rent-a-Judge

Rent-a-Judge

ArbitrationArbitration


Negotiation and Negotiation and MediationMediation

• Alternative dispute resolution methods Alternative dispute resolution methods differ in the degree of formality involved differ in the degree of formality involved and the extent to which third parties and the extent to which third parties participate in the process.participate in the process.

• What is the primary difference between What is the primary difference between negotiation and mediation?negotiation and mediation?


Negotiation and Negotiation and MediationMediation

Negotiation: Negotiation: The The parties come together, parties come together, with or without with or without attorneys to represent attorneys to represent them, and try to reach them, and try to reach a settlement without a settlement without the involvement of a the involvement of a third party.third party.

Mediation: Mediation: The parties The parties themselves reach an themselves reach an agreement with the agreement with the help of a third party, help of a third party, called a mediator, who called a mediator, who proposes solutions.proposes solutions.


ArbitrationArbitration

• A more formal method of ADR in which A more formal method of ADR in which the parties submit their dispute to a neutral the parties submit their dispute to a neutral third party, the arbitrator, who renders a third party, the arbitrator, who renders a decision, which may or may not be legally decision, which may or may not be legally binding, depending on the circumstances. binding, depending on the circumstances.

• Some courts refer certain cases for Some courts refer certain cases for arbitration before allowing the cases to arbitration before allowing the cases to proceed to trial; in most cases, this kind of proceed to trial; in most cases, this kind of arbitration is nonbinding on the parties.arbitration is nonbinding on the parties.


The Federal Arbitration The Federal Arbitration ActAct

• The Federal Arbitration Act (FAA) does not establish The Federal Arbitration Act (FAA) does not establish a set arbitration procedure.a set arbitration procedure.

• The FAA provides the means for enforcing the The FAA provides the means for enforcing the arbitration procedure that the parties have established arbitration procedure that the parties have established for themselves.for themselves.

• The FAA covers any arbitration clause in a contract The FAA covers any arbitration clause in a contract that involves interstate commerce—even where the that involves interstate commerce—even where the business activities may have remote connections or business activities may have remote connections or minimal effects on interstate commerce.minimal effects on interstate commerce.

• Does the FAA Employment Contracts? Does the FAA Employment Contracts? Case 3.1 Case 3.1 Circuit City Stores, Inc. v. Adams (2003).Circuit City Stores, Inc. v. Adams (2003).


State Arbitration State Arbitration StatutesStatutes

• Thirty-four states and the District of Thirty-four states and the District of Columbia have adopted the Uniform Columbia have adopted the Uniform Arbitration Act, under which courts Arbitration Act, under which courts generally give full effect to voluntary generally give full effect to voluntary agreements to arbitrate disputes between agreements to arbitrate disputes between private parties.private parties.

• Those states that have not adopted the Those states that have not adopted the Uniform Act nonetheless follow many of Uniform Act nonetheless follow many of the practices specified in it.the practices specified in it.


The Arbitration The Arbitration ProcessProcess

The Arbitration The Arbitration ProcessProcess

The three steps of arbitration are:The three steps of arbitration are:


Enforcement of Enforcement of Agreements to Submit Agreements to Submit

to Arbitrationto Arbitration

• When a dispute arises as to whether or not the When a dispute arises as to whether or not the parties have agreed to submit a particular matter to parties have agreed to submit a particular matter to arbitration, one party may file suit in court to arbitration, one party may file suit in court to compel arbitration.compel arbitration.

• The court’s role is essentially interpreting a The court’s role is essentially interpreting a contract, either the arbitration clause or contract, either the arbitration clause or submission agreement, to determine to what the submission agreement, to determine to what the parties have committed themselves.parties have committed themselves.

• Case 3.2 Morrison v. Circuit City Stores, Inc. Case 3.2 Morrison v. Circuit City Stores, Inc. (2003).(2003).


Setting Aside an Setting Aside an Arbitration AwardArbitration Award

No award will be enforced if compliance No award will be enforced if compliance with the award would result in commission with the award would result in commission of a crime or would violate public policy.of a crime or would violate public policy.


Setting Aside an Setting Aside an Arbitration AwardArbitration Award

An arbitration award may also be set aside An arbitration award may also be set aside because of defects in the arbitration because of defects in the arbitration process:process:– Award was result of corruption, fraud, etc.Award was result of corruption, fraud, etc.– The arbitrator exhibited bias or corruption.The arbitrator exhibited bias or corruption.– The arbitrator’s actions substantially prejudiced The arbitrator’s actions substantially prejudiced

the rights of one of the parties.the rights of one of the parties.– The arbitrator exceeded his or her powers.The arbitrator exceeded his or her powers.


Setting Aside anSetting Aside an Arbitration Award Arbitration Award

• Arbitration awards may be set aside for a number Arbitration awards may be set aside for a number of reasons, but courts do not generally look at the of reasons, but courts do not generally look at the merits of the dispute, the sufficiency of the merits of the dispute, the sufficiency of the evidence presented, or the arbitrator’s reasoning in evidence presented, or the arbitrator’s reasoning in reaching a particular decision.reaching a particular decision.

• Since the parties freely contracted to enter into Since the parties freely contracted to enter into arbitration, the courts will not interfere simply arbitration, the courts will not interfere simply because one side feels that it received a “bad because one side feels that it received a “bad bargain.”bargain.”


Disadvantages to Disadvantages to ArbitrationArbitration

Arbitration has some disadvantages:Arbitration has some disadvantages:

– Unpredictable, since arbitrators are not required to Unpredictable, since arbitrators are not required to follow prior precedents, but must only follow follow prior precedents, but must only follow whatever rules have been provided by the parties.whatever rules have been provided by the parties.

– Expensive, sometimes as expensive as litigation.Expensive, sometimes as expensive as litigation.

– Time consuming, since discovery is often Time consuming, since discovery is often unavailable, the parties may have to call more unavailable, the parties may have to call more witnesses than they would in litigation.witnesses than they would in litigation.


The Integration of The Integration of ADR and Formal ADR and Formal

Court ProceduresCourt Procedures• Many jurisdictions at both the state and Many jurisdictions at both the state and

federal levels are integrating alternative federal levels are integrating alternative dispute resolution into the formal legal dispute resolution into the formal legal process.process.

• Utilizing methods such as arbitration and Utilizing methods such as arbitration and mediation within the traditional framework mediation within the traditional framework may relieve the logjams afflicting most of may relieve the logjams afflicting most of the nation’s court systems.the nation’s court systems.


Court Annexed ADRCourt Annexed ADR

• Some states require the parties to undergo non-Some states require the parties to undergo non-binding arbitration before proceeding to trial.binding arbitration before proceeding to trial.

• Note that in court-annexed arbitration, either Note that in court-annexed arbitration, either party may reject the award.party may reject the award.


Court-Mandated ADRCourt-Mandated ADR

• Most states (and about half the federal courts) have Most states (and about half the federal courts) have adopted programs to encourage the parties to settle adopted programs to encourage the parties to settle their disputes through ADR.their disputes through ADR.

• Some courts require parties to submit to ADR before Some courts require parties to submit to ADR before proceeding to trial.proceeding to trial.


Court-Related Court-Related MediationMediation

• Today, courts are increasingly turning to Today, courts are increasingly turning to mediation rather than arbitration as an mediation rather than arbitration as an alternative to litigation. alternative to litigation.

• One reason for its popularity is that its goal, One reason for its popularity is that its goal, unlike litigation, is for opponents to work unlike litigation, is for opponents to work out a resolution that benefits both sides, out a resolution that benefits both sides, resulting in a high rate of satisfaction with resulting in a high rate of satisfaction with the outcome.the outcome.


Summary Jury TrialsSummary Jury Trials

A kind of trial in which litigants A kind of trial in which litigants present their arguments and evidence present their arguments and evidence and the jury renders a nonbinding and the jury renders a nonbinding verdict.verdict.


ADR Forums and ADR Forums and ServicesServices

• Services facilitating dispute resolution outside the Services facilitating dispute resolution outside the courtroom are provided by both government courtroom are provided by both government agencies and private organizations.agencies and private organizations.

• Sources of private arbitration services include:Sources of private arbitration services include:– American Arbitration Association (AAA).American Arbitration Association (AAA).– State and local arbitration organizations.State and local arbitration organizations.– Better Business Bureau.Better Business Bureau.– Industry-wide programs.Industry-wide programs.– Online ForumsOnline Forums

• Negotiation services: e.g., Cybersettle.com.Negotiation services: e.g., Cybersettle.com.• Arbitration services: CAN-WIN conferencing system.Arbitration services: CAN-WIN conferencing system.


International International Dispute ResolutionDispute Resolution

• Forum selection and choice-of-law clauses.Forum selection and choice-of-law clauses.– Designate the jurisdiction of court or country Designate the jurisdiction of court or country

over a contract.over a contract.– What about enforcement of awards?What about enforcement of awards?

• Arbitration Clauses.Arbitration Clauses.– The ‘New York Convention.’The ‘New York Convention.’– AAA.AAA.– International Chamber of Commerce.International Chamber of Commerce.

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