Alternative Dispute Resolution – A More Creative and Less Expensive Alternative to Litigation | FFS Insights
Ask anyone who has been involved in a lawsuit what their experience was like, and I would bet that most would say “unsatisfactory.” It is costly, time consuming. and the court is limited in their award. Either the plaintiff wins or the defendant wins – there is usually nothing in between.
Alternative Dispute Resolution (ADR) is another method to resolve differences and creates settlement opportunities that are not available in the litigation process. The two methods of ADR are arbitration and mediation. The public is somewhat familiar with arbitration because the term is often contained in most construction and real estate contracts, as well as certain business transactional documents. Others may know of arbitration only conceptually through their familiarity with the agency American Arbitration Association.
The other method of ADR is mediation. Unlike arbitration, where the arbitrator conducts a “trial” and renders a decision, mediation is a process where the parties and the lawyers, before or during litigation, engage a professional mediator (one who has completed various coursework required) to attempt to assist the parties in reaching a settlement. Those settlements can be as creative as the people involved. For example, the parties may agree to continue to do business together, rather than go their separate ways, but adjust the price so that the aggrieved party has a method to recoup his loss. Meanwhile, it does not lose its customer, and the other party may have time to pay the settlement sum while doing nothing more than continuing to do his business—a win-win situation. A trial court or arbitration cannot fashion such a settlement.
In the Los Angeles Superior Court, litigants are required to advise the court if they are amenable to ADR. If they are amenable the court will require ADR and most likely mediation. They often push the parties towards ADR even if they do not initially agree to ADR. The courts are overloaded and cannot move cases to trial in a timely manner. In studies done by the court, it was found that a significant number of cases settle at mediation. It is often the first time the parties are engaged one-on-one since the lawsuit is filed. The success helps the litigants avoid trial and relieves the court calendar. Most litigants do not know about this mediation until their lawyer tells them that the court has ordered mediation.
It is estimated that between 80 percent and 90 percent of all cases settle—it is just a question of when. Early attempts at resolution of a case can be critical to its ultimate settlement. Often too much time, effort, “investment,” and expenses have accrued in the case as the parties near trial that prevent them from settling a case that could have been settled through mediation before the “investment.” As a result of this economic conundrum, the case can no longer be settled.
There is an alternative for waiting for court-required mediations. The participants to a dispute and their attorneys may select their own mediator, someone who is familiar with their business or industry or has a reputation for specific knowledge on the topic of their dispute, and hire that mediator for a block of time which the lawyers believe necessary to resolve the dispute. This may afford the parties: (a) a more successful outcome, (b) in less time, (c) in a process that they will have to be going through anyway, and (d) save litigation expenses.
In this day of increasing business complexity, a litigious culture, the overcrowding and inefficiency of the court system, soaring legal expenses, and the limited nature of remedies which the court can award, mediation is a more and more viable method to resolving disputes and should be pursued in most cases as early as possible.
About the Author
Robert Ezra is a litigator as well as a California State Certified Mediator. He was a member of the Los Angeles County Superior Court Panel of Mediators and has successfully mediated multiple matters.
