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