Business Legal Ch. 4

Alternative Dispute Resolution (ADR)

1. Alternative means to resolve disputes
2. Outside traditional judicial process
3. Less expensive and less time consuming than litigation
4. Any statements inadmissible if case proceeds to trial
5. Minimize antagonism between parties
6. Flexible and encouraged in state and federal courts

Negotiation

1. Two parties with or without attorneys-third parties not necessary
2. Most informal
3. Conducted before and during litigation
4. Simplest form of ADR and least costly
5. Preparation improves odds of a favorable result
6. Joint problem solving and cooperative behavior

Conciliation/ Facilitation

1. Introduction of a third party
2. Not adversarial
3. Carries offers and counteroffers back and forth
4. Generally does not offer solutions

Mediation 

1. Uses the services of a neutral third party-Mediator
2. Unbiased and chosen by the parties
3. Professional playing an active role in finding solutions
4. Few formal rules and not adversarial and most informal
5. Proposes solutions and makes suggestions for settlement
6. Charges a fee
7. Parties must enter in good faith
8. Most popular form of ADR
9. Less antagonistic than litigation

Arbitration

1. Submission to an impartial third party-Arbitrator
2. Parties can agree to make legally binding by contract before claim
arises or by agreement after claim arises binding parties to the
decision reached by the arbitrator (Award)
3. Can be voluntary or ordered by the court (New Trial issues)
4. Like a trial
5. Favored by state and federal law (Federal Arbitration Act)
(Uniform Arbitration Act)
a. Give full affect to voluntary agreements-arbitration clauses
b. Providing procedures and remedies for enforcement of awards

Arbitration Hearing and Award

1. Informal and private
2. Arbitrator chosen by parties
3. Procedures set by parties and by arbitrator
4. Award binding on parties if by agreement unless:
a. Award was as a result of corruption, fraud, bias
5. Award may be appealed if court ordered (Trial de Novo)

Disadvantages of Arbitration 

1. Decision not appealable-no written decisions
2. Little discovery
3. Unpredictable
4. Putting confidence in one person to hear the claim
5. Can be expensive
6. Mistake by Arbitrator not sufficient grounds for overruling