Why is it that we, as Americans, defer so quickly to lawsuits when we have a dispute instead of trying to resolve our differences privately on our own? Today, litigation happens so frequently in the United States that it has almost become a way of life. It has certainly become a part of our culture and has created quite a demand for attorneys. But is this a good thing for our society and for business?
No business goes into a relationship expecting a legal dispute. But neither does a skydiver jump out of an airplane expecting his parachute to fail. However, in both cases, the wise person will prepare for the worst in case it actually happens. Just like the wise skydiver carries a spare parachute, the wise business owner will include a provision in his contracts that outlines how the parties will resolve disputes, should they occur.
As an attorney, I would say that generally litigation is not a good solution for resolving disputes and should be considered a last resort. It’s expensive, time consuming, and it often can be argued that no one wins but the lawyers. For this reason, I recommend that disputes be resolved outside the courtroom as much as possible. This usually involves what is called “alternative dispute resolution” or “ADR.” Typically, ADR refers to either “mediation” or “arbitration.”
Mediation is a non-binding method that involves a mediator who brings both parties together to discuss ways to resolve their concerns. The idea is that a mediator who does not have a vested interest in the outcome can see things more clearly and with less bias, and as a result can recommend solutions that the disputing parties are unable to see. Mediation is far less expensive and time consuming than litigation and it can sometimes even salvage the relationship.
Arbitration is a more formal method of ADR that involves an arbitrator who hears both sides of the argument and then makes a decision as to how the dispute is to be resolved. The arbitrator’s decision is binding on both parties, similar to the ruling of a court in litigation, but is far less expensive and time consuming.
Both of these methods of ADR can be an effective alternative to litigation that benefits both parties, and it would be wise for businesses to consider including mediation or arbitration in their contracts as their method of dispute resolution.
Wade Hardie, JD, MBA
MINES Corporate Counsel