Using Alternative Dispute Resolution
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Digital Library > Legal Issues and Taxes > Alternative dispute resolution (ADR) "Using Alternative Dispute Resolution"
Litigation leads to expensive, messy, public confrontations with uncertain outcomes. However, alternatives exist for disputing parties. Mediation or arbitration can bring faster and cheaper resolutions with concern for privacy and relationships.
OVERVIEW [top]If you are like thousands of other small business owners and employers interested in avoiding exorbitant legal fees, court costs and lost worker hours, consider using mediation or arbitration the next time you have a dispute with a customer, supplier or employee. Mediation and arbitration are designed to avoid expensive and messy litigation procedures and to maintain privacy and confidentiality for all parties. These alternative dispute-resolution mechanisms offer significant advantages compared to the courts and are becoming popular with cutting-edge companies. Most people will agree that virtually every problem has a practical solution. Yet through the process of litigation, disputing parties typically become entrenched and cannot see their way to a compromise. Instead, lawsuits become a means for one party to impose its will on the other. The process is costly for all involved, and the outcome is uncertain, regardless of the time, money and effort expended. Mediation (and, to a lesser extent, arbitration) offers everyone a better chance to resolve a problem with less acrimony and cost. In this Quick-Read you will find:- When it's best to use mediation to resolve a problem.
- Why arbitration is not always the most effective mechanism to use.
- Some lawyers believe that arbitrators are more likely than judges to split close cases down the middle to provide some degree of satisfaction to both parties. This tendency to compromise, if true, benefits claimants with weaker cases.
- You cannot appeal if your company loses the case or disagrees with the size of the award.
- Draft employee manuals and work rules requiring that all unresolved complaints first be mediated.
- Include a clause in all employment contracts and agreements with customers, suppliers and relevant third parties requiring that any disputes be resolved first by mediation and then by binding arbitration.
- Contact the nearest office of the American Arbitration Association (AAA) to learn more about mediation and arbitration rules. The AAA is most often selected to assist parties in these processes. It is a public-service, nonprofit organization that offers dispute-settlement services to employers and business executives. Services are available through AAA's national office in New York City and 25 regional offices in major cities throughout the United States.
- Speak to an experienced business or labor lawyer to review your company's current policies, procedures and practices. Discuss when arbitratio n is appropriate for your company and when going to court might be more advantageous.
- Always get a competent legal opinion before you involve the company in any dispute or litigation. The lawyer should advise what legal work needs to be done, how long it will take, the chances of success and how much it will cost. Some attorneys neglect to give honest appraisals. Clients are then misled and spend large sums of money on losing causes. Be wary if the attorney states, "You have nothing to worry about." Prudent attorneys tell their clients that airtight cases do not exist and that the possibility of unforeseen circumstances and developments in litigation is always present. That is why you should always consider mediation, arbitration and out-of-court settlements.
- Before proceeding with litigation, request an opinion letter from your lawyer that spells out the pros and cons of the matter. Even if you are charged for the time it takes to draft it, an opinion letter can minimize misunderstandings with your lawyer and help you decide whether to proceed with a lawsuit or accept a mediated settlement.
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