It is no secret that courts are crowded these days. This fact is largely responsible for the turn to alternative dispute resolution, also referred to by the acronym “ADR”. Sometimes parties agree to try ADR, sometimes courts or individual judges require parties attempt some form of ADR before proceeding to trial. Likewise, in part because of concerns about the costs of trial and the time it takes to resolve a case through the court system, an increasing number of contracts that include a clause requiring disputes be heard in an alternative tribunal. As a Northern California alternative dispute resolution law firm, we are fully prepared to guide our clients through ADR. This blog entry looks at two key forms of ADR, mediation and arbitration, and some advantages and disadvantages of turning to an alternative forum.
Mediation and Arbitration Explained
The website for the Superior Court in Alameda County discusses the forms of ADR used in civil matters. There are two types of ADR that all potential civil litigants should know about: mediation and arbitration.
In mediation, a neutral mediator meets with parties and attempts to help them reach a consensus to which they agree to be bound. Mediation may be thought of as assisted negotiation. While less formal than trial or even arbitration, it is important that a party entering into mediation be well-prepared and understand the strengths and weaknesses of their case. Mediators often meet with the parties together and separately to gain an understanding of the dispute and each party’s goals. While the mediator may suggest possible resolutions, the mediator does not impose an outcome on the parties. Importantly, if mediation fails (i.e. no agreement is reached), information shared at mediation cannot be used at trial. Mediation is particularly useful when the parties wish to maintain a relationship after the dispute is resolved, such as a disagreement between a manufacturer and long-time seller. Mediation is also useful when parties want more than just money, such as a seller who might want a right of first-refusal before a competitor is given access to a new product.
Arbitration might be described as a more relaxed trial. In this type of ADR, an arbitrator makes a ruling after hearing the evidence and the parties’ arguments. Arbitration can be binding, meaning a ruling cannot be appealed and there will not be a traditional trial or non-binding meaning either party can reject the ruling and request a courtroom trial. Parties should prepare for arbitration much as they would for trial, although they should be aware that the rules of evidence are typically relaxed in arbitration. Arbitrators are typically experienced attorneys, retired judges, or subject-matter experts. In some cases, there may be multiple arbitrators who release a joint decision.
ADR Advantages & Disadvantages
There are, as the Alameda court website further notes, advantages and disadvantages to using ADR. As noted above, mediation can be a good choice when the parties wish to preserve an amicable (or at least functional) relationship or simply prefer a more cooperative style of resolution. ADR tends to be much faster than trial and offers parties more flexibility and control. This can result in parties feeling more ownership over the outcome, something especially useful in the family law arena or when the outcome requires action rather than just payment. Traditionally, ADR has been cheaper than trial, but that is not always the case these days.
ADR is not without its disadvantages. Some parties do not take ADR very seriously and some find ADR’s discovery limitations frustrating or dislike sacrificing a jury of peers. While confidentiality is often a positive, it can be a negative if a party wants to make a public statement about the dispute. Perhaps the biggest disadvantage is that ADR, particularly mediation and non-binding arbitration, may fail to resolve the case and the parties may still have to go to trial. Even so, ADR can help parties to see the weaknesses and strengths of their case and be more prepared when a trial occurs.
The Brod Law Firm is fully prepared to engage in mediation or arbitration, whether by agreement of the parties or by judicial mandate. As with trial, our San Francisco area plaintiffs’ law firm ensures our clients are prepared for and understand the ADR process.
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(Image by Eric E. Johnson)