SECRET LEGAL WISDOM

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The Benefits Of ADR 

 

There are obviously many advantages to bypassing the courts and settling a matter prior to trial. A few pitfalls too – which this chapter will help you prepare for – but since settlement talks can break out at any time up to and throughout the day of trial, you, as the well-prepared would be litigant, should be fully versed and ready should they erupt out of nowhere in your dispute. 

 

As innovative as our system of justice is, it simply doesn’t work well for every dispute. For some conflicts that may require nothing more than the opinion of a neutral third party, the court system can be a rather inefficient, heavy-handed arbiter, more of an instrument of blunt force where a tool of more precision would work better. 

 

All this has overtaxed our legal system, stretching and contorting it and forcing it into every social nook and crevice in a desperate bid to smother every dispute, from landmark civil rights issues all the way down to mild disagreements and differences-of-opinion. The results have left the system frayed, expensive, and fraught with delays and confusion, while we – the frustrated citizens that system was designed to serve – are left feeling both intimidated and disillusioned by the inner workings of American justice.  

 

Alternative dispute techniques allow disagreeing parties to find a new forum to resolve their differences while preserving access to the courts. Sometimes it helps to see the realm of conflict resolution in terms of degrees marked along a spectrum. At one end of the spectrum, there would be no conflicts of any sort and society would live and work together in perfect harmony. At the other end of the extreme the courts would impose solutions upon the parties in conflict, like what our system is today. ADR then, occupies every degree in between these two extremes. 

 

So, in addition to the benefit of a non-trial forum, what are some of the other advantages ADR offers disputants? 

 

Time: Time for one. As America becomes an ever more litigious culture, increasing numbers of civil and criminal cases compete for a cut of the justice system pie. Extensions, delays, motions, appeals, all these and much more work together to extend docket lengths by months and even years in many jurisdictions.  

 

ADR can bypass those delays and get to a solution in much less time. The American Arbitration Association reports that most mediated disputes take just a few weeks to resolve and most arbitration claims are decided within a few months of filing. Additionally, dispute resolution can be sped up in circumstances where there is a compelling “need for speed.” Most courts are frustratingly unable to accelerate time-is-of-the-essence claims.  

 

Choice of Methods, Neutrals: You and your opponent can often choose your method of resolution and any third-party neutrals you want to preside over the dispute. Sometimes, as in the case of contract mandated or court-ordered arbitration the range of choices can narrow somewhat, but there still is usually far more decisive input from the disputants with ADR than in most courtrooms. 

 

This flexibility becomes a huge benefit in situations that allow you, for example, to select an expert from your industry to help decide your dispute. Judges by definition are impartial neutrals, but they usually are not expert neutrals, which may be critical to obtaining a fair solution to your dispute.  

 

In most arbitration settings, the impartial neutrals are selected with input from the parties. In some cases the parties may appoint representatives to a panel which then selects the neutral[s] decision-maker, or as in the case of the American Arbitration Association and other ADR facilitators, the parties may choose neutrals or delete the names of neutrals from a panel of registered field experts.  

 

Minimizing Associated Costs: ADR can reduce or eliminate nearly all the costs associated with taking a case to trial including, lawyer’s fees, court costs, lost time and wages and other less-tangible costs associated with the emotional toll and hassle of litigation.  

 

Mediation and arbitration fees can range from about $200 to $600 for small and medium-sized disputes like personal injury, property damage and negligence claims, and landlord-tenant and individual contract disputes. 

 

Business contract and damage award disputes can be much more expensive to mediate-arbitrate. Nolo reports that business parties in a multi-million dollar contract dispute that takes four eight-hour days to iron out will probably shell out around $8,000. 

 

In divorce mediation cases where the couple has a house and cars and bank accounts to divide up and child support and custody questions to clear up, parties can expect to pay about $1,200 each. 

 

Many organizations exist to facilitate alternative dispute techniques and are less interested in making a buck than they are in working out an agreement. If your dispute is not too complicated you can probably find an organization to help mediate your claims for a nominal charge. 

 

Private and Confidential: One major benefit of ADR is that hearings and meetings and proceedings and decisions are usually always kept private and confidential. This can keep the terms of any agreement behind closed doors and away from prying eyes and can facilitate total candor among the parties and help reach the common ground necessary to settlement.  

 

Conclusion and Finality: ADR brings closure to disputes that can drag out for months or even years and most settlements result in binding agreements – particularly with arbitrated settlements -- that carry the weight of legally enforceable contracts between the parties. 

 

Pitfalls of ADR: Alongside the benefits of ADR, there are also some serious pitfalls to watch out for. Any of the benefits mentioned above can become a liability in the wrong set of circumstances. The decisions of non-binding arbitration and mediation, for example, are often much less final than parties might like. Really, they amount to agreements that may or may not be enforceable. 

 

The choice of neutrals, as another example, carries the flipside possibility that you may not be able to find out much about your decision-maker before the day of the hearing, and neutrals are generally much-less accountable than judges who are public officials and subject to ethics rules and laws that govern their profession. 

 

The confidentiality and privacy of ADR can have its dark underside too, as when you want others to know of the behavior of your opponent. Settled disputes often require parties to stay hush-hush as to the outcome. Also, there are no records or transcripts of ADR proceedings that can be used by you for any potential appeal, which brings us to perhaps the chief difficulty of ADR.  

 

An arbitrated decision may carry a very limited or even no rights to appeal. Courts are taking an increasingly strong view of the merits of arbitration, enforcing decisions whether the parties necessarily agree with them or not.  

 

Steven K. Ludwig describes that trend in an article outlining the growing practice among employers to require binding arbitration for all statutory conflicts as a condition of employment. 

 

Ludwig notes the United States Supreme Court ruling that upheld a decision in Gilmer v. Interstate/Johnson Lane Corp., (500 U.S. 20, 1991) in which the court held that there was no absolute right of access to the courts by a plaintiff pursuing an age-discrimination action against an employer, if the employer has a solid arbitration agreement with its employees.  

 

Ludwig adds, “The court found that an agreement to arbitrate was governed by the Federal Arbitration Act which provides that ‘a written provision in any … contract … to settle by arbitration a controversy thereafter arising out of such contract … shall be valid, irrevocable, and enforceable.’ The court also noted that it had regularly held that federal statutory claims can be the subject of enforceable arbitration agreements” [3].  

 

You should weigh each of these benefits against the possible pitfalls to help determine if ADR is for you. 

 

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