BUSINESS DISPUTE RESOLUTION

BusinessDispute The two most common alternative dispute resolution (“ADR”) methods available are arbitration and mediation. Both methods can help you settle your conflict and save you significant time and money. While both share characteristics of a traditional courtroom trial, they differ in significant ways:

  1. In disputes involving contracts and other agreements, the parties to the contract can require the use of either method as a means for resolving their disputes before, or instead of, filing a suit.
  2. Neither provides for a trial by jury. For that reason, rules of procedure and evidence are generally much more relaxed at these proceedings.
  3. Unlike a trial, the parties are able to direct the resolution in more meaningful ways, as opposed to a judge or jury deciding their fates. Many courts are requiring some form of ADR before they will allow either party to proceed to trial. The Harris County family courts require mediation in most instances before signing off on the resolution and Galveston County has made a minimum of three (3) half-day mediations mandatory in all family law cases. Therefore, a minimal understanding of the process that is ADR is helpful.


Arbitration
What is Arbitration?

Arbitration is the ADR process for the resolution of legal disputes that most closely resembles an actual trial. An arbitration is presided over by an independent third party who has no interest in the outcome of the dispute called the Arbiter. The Arbiter usually has specific expertise in the industry and field in which the dispute has arisen. For example, a construction dispute will have an Arbiter who may be a civil engineer or an attorney with many years of experience in construction law. An accounting dispute will have an Arbiter who is a Certified Public Accountant. With an expert presiding over the dispute, the parties can benefit from the particular understanding and analysis of the facts an expert can provide. Additionally, the Arbiter may be better aware of the law governing the dispute than a Judge drawn at random or a jury of people who do not have that type of specific experience and education. This allows the parties to focus on the particular strengths of their position without concerning themselves as much with what laws should apply.

Benefits of Arbitration
Arbitration is similar to a traditional case in that the parties generally must agree to make the result binding on all parties. For that reason, arbitration is very similar to a court trial, only with a more relaxed set of rules governing the proceeding. In certain circumstances non-binding arbitration may be available, but either way, the parties cannot be compelled into arbitration absent a consensual, signed agreement. Arbitration can be used to settle the entire dispute or to settle small parts of the total dispute. This particular benefit helps to decrease the time and expense of a full courtroom trial on all issues. Many disputes handled in arbitration involve the scope of what is to be arbitrated and even whether the parties agreed to arbitration at all.

Other benefits of arbitration include greater privacy (as opposed to a public record created by a trial), lower costs, and quicker resolution. These benefits are shared by arbitration’s cousin, mediation.

What is Mediation?
Mediation is less like a trial and more like a negotiation. Most mediations are coordinated by a certified mediator. Texas has particular education and training requirements set out by statute before a person can mediate a dispute. Harris County requires additional training for those who wish to be court-appointed mediators in family law matters. A mediator will bring the parties together and allow them to communicate regarding their particular issues. It is the job of the mediator to ensure that all communications are respected and any barriers to communication are overcome.

Benefits of Mediation
Mediation allows the parties their greatest degree of control over the resolution of their conflict of all the ADR processes. Since it encourages communication and mutual resolution over adversarial confrontation, this method is highly useful in solving conflicts. The particular success rate of mediation after a suit has been filed is over 98%. The success of any ADR process is entirely dependent on the dedication of those involved. As the new philosophy of collaborative law permeates the traditional resolutions of trial by judge or jury, familiarity with the system of all ADR processes will be an important consideration in which attorney to choose.

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