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Alternative Dispute Resolution: How To Resolve Your Dispute Without Going To Court.

Prepared by: The Alternative Dispute Resolution Committee, and the Committee on Arbitration

1996, The Association of the Bar of the City of New York.

All rights reserved.

CONTENTS

Introduction

What Is Alternative Dispute Resolution (ADR) ?

Why Should I Consider Settling My Dispute Out of Court?

How Can I Resolve My Dispute Out of Court?

What Are the Disadvantages of Using ADR?

What Types of Disputes Have Been Solved by ADR?

How Does the Cost of ADR Compare With Lawsuits?

If I Have Already Filed a Lawsuit, May I Still Use ADR?

How Can I Get the Other Parties to Use ADR?

Is an ADR Agreement Enforceable in Court?

What Happens If One Party Is Emotionally, Financially or Educationally Stronger?

Does ADR Really Work?

Do I Need an Attorney?

How Do I Know the Mediators and Arbitrators arc Competent and Qualified to Handle My Dispute?

INTRODUCTION

This booklet is designed to help you resolve your dispute without going to court. It will introduce various dispute resolution processes, their advantages, disadvantages, and differences. It will help you find a dispute resolution process that suits your needs.

Call The Association of the Bar of the City of New York at (212) 626-7373 if you have questions regarding this booklet or would like to be referred to a dispute resolution program in your community or to an attorney who will be able to advise you further.

WHAT IS ALTERNATIVE DISPUTE RESOLUTION(ADR)?

ADR refers to the processes for resolving disputes without going through the increasingly overburdened court system. ADR processes are used in resolving many disputes that never get to court, as well as providing a means of settling the cases that are filed in court.

WHY SHOULD I CONSIDER SETTLING MY DISPUTE OUT OF COURT?

_ An Opportunity To Work With Expert Neutrals

The individuals who assist the parties are impartial, knowledgeable, independent and trained experts in dispute resolution. They may also be expert in the subject matter of the dispute.

_ Flexibility

Many of the alternatives to litigation permit custom-tailored and creative approaches to conflict resolution, insuring optimal outcomes for particular problems.

_ Increased Control

Parties have more control over the process and the results. In litigation, the disputants relinquish control to the judge and jury.

_ Optimal Outcomes For All Parties

Negotiation and mediation can result in innovative and mutually beneficial solutions as a result of parties focusing their energy on problem solving rather than fighting.

_ Personal Satisfaction With The Resolution

Having an opportunity to explain your concerns and to participate in resolving your dispute increases the likelihood that you will be satisfied with both the process and the outcome.

_ Preservation of On-Going Relationships

Disputing parties who have an on-going family, neighborly business, or working relationship may benefit from working together to achieve a mutually acceptable resolution to their dispute. Parties who understand each other's concerns and develop satisfactory solutions to address these concerns often improve their relationship and enhance their ability to work together in the future.

_ Privacy

Under applicable rules, mediators, arbitrators and dispute resolution agencies are generally obligated to maintain the privacy and confidentiality of the proceedings. The parties themselves may also agree to confidentiality. This may avoid publicity and embarrassment.

_ Resolution of All Issues

Alternative processes can address and resolve all problems you may have with another party. Sometimes going to court can only resolve part of the problem.

_ Saves Time and Money

Many alternative processes provide convenient and simplified proceedings, speedy results, solid solutions and substantial time savings. These efficiencies can reduce legal fees and related costs.

HOW CAN I RESOLVE MY DISPUTE OUT OF COURT?

Do not let anyone tell you that your only choice is to sue. You can handle your dispute as you see fit. Carefully consider your alternatives to decide which is the most appropriate. The primary methods of alternative dispute resolution are negotiation, mediation and arbitration.

_ Negotiation

Negotiation is a voluntary and informal process to discuss conflict and to reach mutually acceptable agreements. The participants decide whether the process will be private.

The parties also have the choice of appointing individuals, such as attorneys, to assist them in the negotiation. Prior to the negotiation, your attorney can help you determine your goals and objectives. During the negotiation, the attorney is responsible for protecting your interests and keeping you informed.

The parties themselves, not their attorneys, decide whether to accept or reject a settlement offer.

_ Mediation

Mediation is also a voluntary, private and informal method of discussing your problem and reaching an agreement. In mediation all parties meet with a trained neutral third party, known as a mediator, to seek an agreement that is acceptable to all disputants. Although mediators may help the parties negotiate effectively, they do not dictate or recommend an outcome. The mediator's function is to draw out all the concerns of each of the parties, assist in ensuring accurate communication, outline issues and help the parties generate solutions. If all disputing parties cannot agree the mediator has no authority to impose a result. The costs of mediation include the mediator's fees and possibly an administrative fee. Each participant pays his or her own attorney.

_ Arbitration

Arbitration is more formal than mediation, but less formal than going to court. Arbitration is a private process and can be speedy and economical. It may be binding or non-binding, as the parties decide at the start of the proceedings.

Binding means the decision is legally final (no appeal is allowed) and enforceable in court.

Non-binding means that if you or the other party does not like the decision you still have the opportunity to go to court and have your dispute litigated.

At the arbitration hearings all parties give evidence, either written or through witnesses, to neutral decision makers called arbitrators. The arbitrators then decide the outcome of the dispute. The arbitrators are selected by the parties or appointed from a preselected list. The parties present written and oral evidence, as in court. However, the proceedings are informal and are often held in a conference room rather than in court. The disputants are not involved in fashioning their own resolution as in mediation, but, instead, have a resolution imposed on them by the arbitrators. The arbitrators usually decide a case by issuing a written decision or award following the arbitration hearings. Arbitration costs include the fees of the arbitrators, administrative fees and attorneys' fees. Parties pay their own attorney's fees, but usually split the administrative and arbitrators' fees.

_ Mixed Processes

In addition, the growth of alternative dispute resolution has resulted in several combinations of dispute resolution processes: early neutral evaluation (ENE), mediation-arbitration (med-arb), mini-trial, rent-a-judge, neutral expert, and ombudsman. To understand these processes and their appropriate uses, you should consult an attorney knowledgeable in ADR.

WHAT ARE THE DISADVANTAGES OF USING ADR?

Because many alternative processes are confidential and the outcomes bind only the parties to the agreement or award, such processes may not be the best way to resolve a dispute where you want the issue to be publicized (i.e. an environmental issue) or the outcome to become a precedent for others.

If one party (or a child) has been physically abused by another party, litigation may provide more protection for the victims of violence than ADR processes.

WHAT TYPES OF DISPUTES HAVE BEEN SOLVED BY ADR?

ADR has been used successfully to resolve a wide variety of disputes. The following are disputes frequently resolved using ADR methods:

_ Business

Contract claims, commercial problems, organizing or closing a business or partnership, insurance claims, real estate transactions.

_ Construction

Contractor/client disputes, architect problems.

_ Consumer

Sales/purchase disputes, warranties, refunds, repairs, deposits, services, interactions between sales personnel and customers.

_ Employer/Employee

Contracts, discrimination, sexual harassment, wages, dismissal, working conditions, communication.

_ Family

Parenting, visitation, domestic disputes, custody, divorce and separation arrangements, spousal and child support, property issues, elder care.

_ Landlord/Tenant

Lease agreements, rent, repairs, security deposits, evictions, services, apartment entry, lockout, pets, communication between tenants and management.

_ Neighborhood

Noise, boundary/property lines, pets, parking, problems between children, parents and neighbors.

_ Securities

Losses in the securities and commodities markets.

_ Small Claims

Accidents, debts, property, services.

_ Tort Cases

Automobile accidents. personal injury claims, professional malpractice.

HOW DOES THE COST OF ADR COMPARE WITH LAWSUITS?

ADR processes often save:

_ Disputants who use an ADR process often find their dispute is settled more efficiently than through litigation. Settling the dispute quickly saves money.

_ Some ADR programs run by community organizations or the courts use volunteers as the neutral. This permits the dispute to be settled for a low charge or even no charge at all.

_ Numerous ADR programs offer free or low-cost services to low-income persons.

IF I HAVE ALREADY FILED A LAWSUIT, MAY I STILL USE ADR?

If all disputants agree, ADR processes may be used before or after a lawsuit is filed.

HOW CAN I GET THE OTHER PARTIES TO USE ADR?

Although many disputants readily agree to use ADR, some are skeptical of alternative processes. Here are ways to encourage another party to try ADR:

_ If the other party is angry or standing on principle, WAIT. Let the reality of the expense, risk and delay of going to court sink in before you propose an alternative.

_ Ask the other parties to consider ADR. Suggest that a neutral person be brought in to explain the advantages of ADR. The other parties may feel the neutral person is objective and may listen to and trust the information given by a neutral authority.

_ Ask the neutral intervenor to make the initial contact with the opposing party and put the burden on the neutral to explain ADR and its advantages. After all, the neutral is skilled in making such presentations.

IS AN ADR AGREEMENT ENFORCEABLE IN COURT?

The answer depends on which ADR process is used.

_ Negotiation

Negotiation usually results in the parties making an agreement. An attorney can make sure that the agreement will be binding and enforceable in court.

_ Mediation

No one, not even the mediator, can force the parties to reach an agreement. Only when all disputants accept an agreement is the mediation concluded. Parties who shape their own agreement usually comply with it and do not need a court's enforcement powers.

However, an agreement reached by the parties is binding and enforceable in court if it satisfies the requirements for a contract. If a party fails to abide by the contract's terms, the other party may either re-mediate the issue or seek to enforce the agreement in the court system. Once again, an attorney will help make sure that your agreement can be enforced.

_ Arbitration

If the parties have agreed to a final and binding award, the award will be legally enforceable in the New York state courts or in the federal courts. An arbitration award is as effective as a decision made following trial because New York state law and federal law allow a party to confirm an arbitration award into a court judgment. An attorney can advise you further on enforcing an award.

WHAT HAPPENS IF ONE PARTY IS EMOTIONALLY, FINANCIALLY OR EDUCATIONALLY STRONGER?

_ Mediation

During mediation, the mediator can address the unequal situation in several ways. First, the mediator will encourage the participation of all parties. Second, the mediator may meet separately with each party and urge them to consider and weigh all options. Third, the mediator may decide to suspend the process until all parties obtain the legal counsel, financial information or moral support they need to evaluate their case and make appropriate decisions.

Before the disputants accept an agreement, the mediator is expected to ensure that all parties understand the agreement, have carefully considered all alternatives and feel that the resolution represents their best option.

In extreme situations, such as physical abuse, severe deficiency in information, language barriers, or mental problems, the mediator may decide that the inequality cannot be effectively handled in mediation. The mediator will then inform the disputants, terminate the mediation, suggest the parties obtain legal counsel and discuss the remaining dispute resolution options available. The mediator will also take these steps if it appears that any disputant feels forced into an agreement.

Mediation is voluntary. Any participant feeling disadvantaged can leave at any time.

_Arbitration

Arbitration is less formal than a lawsuit. This means that an arbitrator, unlike a judge, need not strictly follow the rules of procedure and evidence. Each party is given the same opportunity to fully present its case without being hindered by technical rules. Therefore, a party with less resources may not be at as great a disadvantage in arbitration as he or she would be at a formal trial where technical rules must be followed.

DOES ADR REALLY WORK?

YES, ADR works.

People who choose to use ADR to solve their problems report a high rate of satisfaction with the results.

You may want to consider including an ADR clause in agreements. An attorney can help you evaluate ADR options.

DO I NEED AN ATTORNEY?

You do not have to use a lawyer to participate in an ADR process. However, any party can employ an attorney or other representative to help resolve a dispute. Some advantages of hiring an attorney are listed below.

  • An attorney's primary role is to represent your interests. You may want to talk to an attorney to ensure you understand your rights and obligations, the most likely outcome of litigating the dispute, and the benefits and costs of alternative approaches. An attorney can explain the procedures involved, help you choose an ADR process, represent you in all aspects of the process and assist in drafting an agreement or reviewing proposed settlement terms.
  • If you decide you want the assistance of an attorney, you must decide to what extent you want the attorney involved. You can limit the attorney's role to a specific task or engage the attorney to take over the entire matter. The attorney can be an important resource for legal information and an effective representative of your interests.
  • Ultimately, only you can decide what is best, how you want your dispute handled and how you will spend your time and money.
  • If you decide that you need an attorney, but do not know how to find one with experience, The Association of the Bar of the City of New York and the New York County Lawyers' Association's non-profit Legal Referral Service can help. Call the Legal Referral Service, (212) 626-7373, to discuss your case with a counselor and receive a referral to a lawyer.

HOW DO I KNOW THE MEDIATORS AND ARBITRATORS ARE COMPETENT AND QUALIFIED TO HANDLE MY DISPUTE?

Mediators and arbitrators may be attorneys, retired judges, educators, business people, psychologists or persons with an expertise relevant to the case.

Neither mediators nor arbitrators are currently required to comply with any uniform standards for education, training or practice.

You should make inquiries as to whether the neutral third party is well qualified in the following respects:

  • educational background for your type of dispute;
  • adequate training in dispute resolution and the subject matter of your dispute; and
  • satisfactory experience of service as a neutral authority.

    HOW CAN I FIND AN ADR PROCESS OR PROVIDER?

    The Association of the Bar of the City of New York and the New York County Lawyers' Association, through the Legal Referral Service, are committed to helping citizens locate competent legal services. To find an ADR program or provider in the metropolitan area contact the Legal Referral Service at (212) 626-7373. When you call you will be asked about your dispute. The person answering your call will then provide you with a choice of dispute resolution programs that suit the type of dispute you have described, as well as the names of attorneys experienced in the area of law involved in your dispute.

    The publication of this brochure is supported by:

     

American Arbitration Association

  • American Stock Exchange
  • J.A.M.S./Endispute
    • National Association of Securities Dealers

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