“Dispute Resolution - Pick Your Poison”		«BACK
	by Phillip R. Krass
	from Spring 2005 Krass Monroe, PA Newsletter

Many things can be done to avoid such problems, but this article is intended to deal with the methods in which those disputes can be handled.

There may be occasions where you simply have no input into the method of dispute resolution. There may be no contract in which you can make a choice, or no invoice in which you can insert a dispute resolution requirement. However, where the choice is yours, your basic options are to go to court and litigate, or to choose the alternative dispute resolution of arbitration. Both of those methods of resolution could include a side trip known as mediation, which is a good place to start.

Irrespective of whether your ultimate dispute resolution may be litigation or arbitration, you may choose to include in your contracts an obligation to mediate before the matter is allowed to proceed. Mediation has become a cottage industry in the last 15 years, as many lawyers have chosen to emphasize their positions as mediators, rather than advocates, and many retired judges have set up shop as mediators.

Mediation is nothing more complicated than having a third party getting involved in your dispute, receiving information from both parties, and then sitting down to talk separately with each party in an effort to find some middle ground in which a settlement of the issues is possible. Mediators emphasize to the participants:

• The cost of arbitrating or litigating their claims;
• The uncertainly of that resolution; and
• The time and effort it will cost both sides to proceed past mediation.

With that framework, a mediator uses his or her training and skills to find a solution that both parties can live with, if not be excited about.

Most people would be amazed at the percentage of success rate enjoyed by mediators in finding a solution to often difficult and complicated issues. In addition to a skilled mediator, a successful outcome is going to depend, to a large degree, on both sides being willing to:

• Listen;
• Continue to engage in the process;
• Keep in mind the cost benefit ratios of moving on in the dispute process; and
• Put aside the “principal” involved.

ARBITRATION

If mediation does not resolve your issues, the alternative is to “try” your lawsuit. You can do that either in the traditional way in front of a court and a jury, or you can put your case before an arbitrator selected by the parties or one selected by the American Arbitration Association (“AAA”). The AAA is a national organization that provides qualified arbitrators (and for that matter mediators) in each jurisdiction and handles the administrative aspects of moving your dispute along to a final arbitration. Once the parties “try” their case to an arbitrator and that arbitrator gives a decision, it is virtually impossible to successfully appeal the result absent fraud on the arbitrator’s part. The courts will generally reject an appeal from an arbitration award absent such fraud, and not even a clear error of law or fact by an arbitrator will cause a court to intervene.

The advantages of arbitration are:

• It is quicker than getting entangled in the legal system;
• More likely to result in a final resolution without any prospect of further appeals; and
• The usual “discovery period” provided for in litigation which involves the parties sending questions back and forth to be answered under oath, the parties demanding document exchanges, and the parties taking depositions of witnesses ahead of time, are for the most part reduced or eliminated in the arbitration system.

Offsetting those savings, are the costs of the arbitrator who charges on an hourly basis, and the costs of an organization such as the AAA. Those costs are generally split between the parties. Despite the administrative costs that exist in arbitration and not in litigation, everyone would agree that arbitration is quicker and less expensive than a traditional court setting.

Why then, do you ask, would anyone choose not to arbitrate? Probably because some of the advantages in arbitration turn to disadvantages in certain disputes. If your issues are extremely complicated and you have a concern that it is going to be impossible for an arbitrator to understand the complete story unless you have the opportunity to utilize all of the discovery techniques that are unquestionably available in litigation, you may choose a courtroom setting. In addition, many people believe that arbitrators may choose to “cut the baby in half” more often than a judge or jury would.

Trying your case to a court and a jury does give you the advantage of obtaining fuller disclosures through the discovery process. It also has some disadvantage, including the likelihood that no one on the jury is going to have the background, experience, education, and training of an arbitrator. Many lawyers believe that trying a very complicated piece of litigation to a jury is a major gamble and their client would be better off selecting an arbitrator with background in the industry in question.

Your attorney can help you make a decision about which of your contracts or agreements might prudently include an alternative dispute resolution provision mediation and/or arbitration as a method of resolving your issues depending on the amount of money involved, the complexity of the issues, and the collective view of what makes the most sense in your circumstances.

Please contact the attorneys at Krass Monroe, P.A. if you have questions or require additional information.