09 / 07 / 2016

ADR: What Are My Alternatives to Litigation?

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Despite best-selling law movies and books basing their plots off of highly tense and dramatic court cases, about 90-95% of real cases end in some form of a pre-trial settlement in both civil and criminal court. Litigation is attractive, but it’s not popular. Arbitration, mediation and collaboration are the alternative forms a vast majority of parties ultimately choose.

However, is this just a trend? Is litigation expected to pick up or will the aforementioned forms of dispute resolution eventually replace litigation entirely? After all, arbitration, mediation and collaboration are usually chosen after both sides to a case have spent considerable time, effort and money in preparing for litigation. The alternative form to litigation is typically chosen because one party gets cold feet on the eve of trial (or exceptionally close to trial).

Alternatives to litigation

Arbitration offers substantially the same benefits and experiences of traditional litigation: evidence, witnesses, arguments, etc. However, the atmosphere is less formal than traditional litigation and arbitration does not need to occur inside a courtroom; a conference room suffices.

There are many pros and cons to arbitration, but the gist is that arbitration is the reasonably priced alternative to full-blown litigation. Perhaps what is most attractive after its cost, arbitration is just as binding as a final court order (but, remember, there is always an exception with the law).

There is a growing trend nowadays to include arbitration clauses in contracts and other agreements, thus ostensibly supporting the idea that arbitration is becoming the preferred form of dispute resolution.

However, the ironic effect of these clauses is that they are becoming so complex—understandably, this is to protect the company or party who drafts them—disputes over arbitration clauses, the very thing that is meant to prevent parties from ever entering into the courthouse, is the very thing bringing parties into the courtroom in order to figure out whether the clause itself is binding and/or valid.

What is collaborative law?

Collaborative law, on the other hand, aims to simply encourage the parties to work together in order to achieve a mutually beneficial outcome. Even the attorneys for both sides work together in order to reach a negotiated agreement.

This form of law is mostly found in family law, however, and is still somewhat foreign to businesses. On paper, it makes sense for all parties to build and maintain a cordial relationship as a dispute is reconciled, but there could be practical obstacles preventing collaborative law from becoming reality in the corporate world.

Looking down the road, it appears litigation will still be a relevant form of dispute resolution, but as arbitration and other forms of dispute reconciliation eventually gain popularity and as parties realize the economical and relational advantages of them, we may very well see that 5-10% remainder drop even further.

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