Alternative Dispute Resolution 101

Thanks in part to TV courtroom dramas, many people have at least some basic awareness of the litigation process – or the process of pursuing (or defending against) formal legal action in court. What tend to be less familiar are the alternatives to litigation – namely, negotiation, facilitation, mediation and arbitration – which present the opportunity to resolve disputes without a courtroom trial.

Negotiation – As the least formal alternative dispute resolution technique, negotiation typically involves communications between the parties or their attorneys. Negotiation techniques can be utilized at any stage of a dispute, regardless of whether a lawsuit has been initiated. The advantage to pre-suit negotiation is its cost-effectiveness and its potential for bringing about a quick resolution.

Facilitation/Mediation – In Michigan, facilitation and mediation are synonymous. This process involves the use of a third “neutral” party (the facilitator) who helps the parties to settle their dispute. Notably, the facilitator does not have authority to decide the case or issue any rulings; rather, his or her role is to guide the parties in a constructive dialogue in hopes of reaching a “win-win” settlement. For this reason, facilitation can only work in cases where two or more adverse parties genuinely desire to resolve the conflict. Michigan business court judges often require those involved in a lawsuit to participate in an “early facilitation” to determine whether any portion of the disagreement can be settled before starting the costly and time-consuming discovery process.

Arbitration – Arbitration is the most formal litigation alternative and involves submitting a dispute to an arbitrator who will render a binding decision on the case. While parties can voluntarily agree to arbitration, it is more common that disputes find their way to this process because of a contractual obligation that requires any disagreements be settled by arbitration. It is worth noting, though, that arbitration typically requires the parties to give up their right to appeal the rulings of the arbitrator.

If the current trend in favor of settling conflicts outside of the courtroom serves as any indicator of the future, it is likely that alternative dispute resolution will continue to gain traction with parties, attorneys and judges alike.

Please contact Wright Beamer with any questions regarding dispute resolution.

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