Dispute Resolution Strategies
There are four common approaches to settling legal disputes: Direct Negotiation; Mediation; Arbitration and Litigation. Which one is right for you?
Direct Negotiation: Works best in instances where the dispute is of fairly minor character and small in dollar amount, or where the disputing parties have an ongoing relationship that they don’t want to disrupt. In these situations, there is powerful incentive for both sides to avoid the cost, time, uncertainty and potential disruption of a protracted dispute. The negotiation process starts by the attorney for each side conducting a case evaluation to identify the legal and factual strengths and weaknesses for each side, followed by one or more face to face to telephonic discussions to resolve the dispute.
Mediation: works best where the parties have had a prior or ongoing business or personal relationship and both sides are inclined to meet each other part of the way, but the dispute is either too complicated or too much is in dispute to be resolved by direct negotiation. Mediation can be binding or non-binding. The process starts with joint selection of a mediator by the parties, submission of “position papers” by each side to the mediator and meeting, which typically lasts ½ day to a full day. Generally, the approach of the mediator is not focused on the legal merits of the parties, but on their willingness to resolve their dispute.
Arbitration: Arbitration or “private litigation” is most similar to a regular court litigation conduced in private. Arbitration clauses are common in many employment contracts as well as in business contracts such as purchase and lease agreements for automobiles, appliances and consumer products and services. In addition, sometimes parties to a litigation mutually agree to submit their case to arbitration to minimize the cost, length and uncertainty of litigation. The process starts by joint selection of 1-3 arbitrators, followed by some discovery and submission of evidence and culminates in hearing and a decision known as an “Award.” Compared to litigation, arbitration is speedier and less costly. In addition, the decision of the arbitrator is final and, with rare exceptions, unappealable.
Litigation: Litigation is the default method of resolving disputes. The litigation process commences through filing a complaint in court, followed by a period of discovery and concluding in a trial. Most litigations are resolved early as both sides evaluate their cases in light of the evidence developed through discovery. As a result, fewer than 2% of litigations actually end in a trial by a jury or a judge. The losing side can ask the court to review and reconsider its decision during a “post trial review” period, after which the judge will issue a final ruling. Each side then has thirty days to appeal the final decision.
A successful dispute resolution strategy depends on careful evaluation of the facts and circumstances relating to the dispute, and consideration of the client’s goals and risk tolerance.
© 2018 Dr. Dariush Adli