Alternative Dispute Resolution Procedure - Environment of Business - Lecture Slides, Slides of Business Management and Analysis

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Chapter 4

Alternative Dispute

Resolution Procedure

• Judges
  • Cuts costs
  • Reduces court delays
• Businesspeople
  • Maintains business relationships
  • Reduces costs
• Public-at-large
  • Reduces costs
  • Reduces court delays

Negotiation

• Parties meet to discuss and resolve their

disputes and arrive at a mutually acceptable agreement

• Involves joint problem solving and cooperative

behavior

• Produces no winner or loser
• Requires good negotiation skills

Conciliation

• Third party (the conciliator) brings conflicting

parties to an agreement

• Conciliator’s role is to limit passions and

negative rhetoric and facilitate negotiation without taking a position

• Works well in labor disputes and divorce cases

Mediation

• Impartial third party tries to persuade the parties to discuss their disagreements and come to a resolution
• Parties meet with the mediator and outline their respective positions; then, they go to separate rooms, and the mediator shuttles back and forth
• The mediator does not make a decision for the parties, but tries to persuade the parties to reach a resolution of their dispute

Arbitration

• Parties submit their dispute to a neutral third party who resolves their dispute
• Arbitration is cheaper in time, money, and privacy than a trial
• Arbitration is less formal than a judicial proceeding and allows the parties to select the forum
• The main federal statute is the Federal Arbitration Act
• The main professional organization is the American Arbitration Association
• Many contracts require arbitration

Differences Between Contractual and

Judicial Arbitration

• Contractual arbitration
  • Private
  • Limited discovery
  • Generally does not include a subpoena power
  • Does not include rules of evidence
  • Generally, results in a binding award
  • Has limited grounds for appeal
  • More cost effective
    • Judicial arbitration
      • Public
      • Full discovery
      • Includes subpoena power
      • Includes rules of evidence
      • Does not result in a binding award
      • Fully preserves all appeal rights
      • More expensive, but cheaper than a full trial

Disadvantages of Arbitration

• Lack of appeal rights
• Lack of full disclosure
• Lack of discovery and disclosure
• Lack of evidentiary standards
• Lack of arbitration clause
• Lack of knowledge regarding the arbitrator’s background
• Lack of a clear-cut victory
• Lack of precedent

Other Forms of ADR

• Mediation/Arbitration
• Fact finding
• Minitrial
• Private judges
• Short trial
• Partnering

International Considerations

• New York Convention
  • Is ADR in the World Community?

Legally Speaking

• When life gives you lemons …. i.e., you have just

purchased your first car and it turns out to be a “lemon.” What should you do?

• Check to see if your state has a lemon law
• If so, do the necessary documentation
• See if your contract requires arbitration
• If not, see if your dealer will agree to arbitration
• Determine whether a lawsuit is worth the time and expense for you

Summary

• Who Advocates ADR?
• Negotiation
• Conciliation
• Mediation
• Arbitration
• Differences Between Contractual and Judicial Arbitration - Disadvantages of Arbitration - Other Forms of ADR - International Considerations - Legally Speaking