Alternative Dispute Resolution ("ADR"), Arbitration and Mediation

ADR is short for "alternative dispute resolution." It encompasses arbitration and mediation.

Traditionally, disputes were resolved by a trial, which took place in court. A judge presided over the trial. A jury decided what the true facts were. The jury trial system was a great achievement in law, and is a constitutional right under many circumstances. Nevertheless, it has its drawbacks.

• A trial is in a public courtroom, requires formal presentation of evidence and witnesses, often is decided by a jury, and the outcome can be appealed by any aggrieved party.

• Trials are expensive and time consuming, in that they take place when directed by the court and require not only the attendance of the witnesses and parties but also a great deal of preparation.

• It is especially difficult to obtain the cooperation of doctors, and always expensive to do so.

• The trial of a dog bite case often costs the victim approximately $15,000.00.

• The decisions of juries cannot be predicted.

Alternative dispute resolution simply means ways of solving disputes without having to go to trial. The goals of ADR include resolving the case faster, more efficiently, at more convenient times, and with greater predictability. The methods of ADR are discussed below.

Arbitration

One of the most common forms of ADR is an arbitration. Because of the many drawbacks associated with traditional trials, many cases at this time are resolved by arbitration. An arbitration is very similar to a trial, but more convenient, streamlined and economically feasible.

• An arbitration takes place in a conference room, with a retired judge presiding instead of a jury.

• The date and time are agreed to by the parties, not dictated as they would be if there were a trial.

• Witnesses do not have to be present most of the time, and doctors can testify through written reports instead of taking the witness stand.

• The judge makes the decision, which may or may not be binding upon the parties. When it is intended to be binding, it is called a "binding arbitration." The judge is referred to as the "arbitrator."

• Sometimes an arbitration agreement provides for a certain range of recovery for the victim. In other words, it might be agreed that, no matter what the arbitrator rules, the victim will receive not less than $10,000.00 or more than $25,000.00.

• An arbitration in a dog bite case often costs about $2,000.00, so there would be a savings that, especially in a small case, would be significant.

Mediation

Another common form of ADR is mediation. Mediation is essentially a conference with the opposing side and a mediator, in which both sides attempt to arrive at a mutually acceptable agreement to resolve something. In a personal injury case, mediation is often used to settle prior to trial.

The mediator in personal injury cases is often a professional mediator who has been a judge or respected attorney. Mediation takes place with the plaintiff or her parents, the plaintiff's lawyer, the insurance company, and its lawyer. The mediation takes place in a conference room. If agreement is reached, the mediation is followed up with obtaining an annuity for the plaintiff or the child, and then a short court hearing if the victim is a minor.

The difference between an arbitration and the mediation is that the judge is there to assist the parties to form their own agreement to settle part of the case or all of it. The judge does not make a decision, but lets the parties make whatever decision is comfortable to them. The judge is referred to as the "mediator."

In some circumstances, a case is required to be arbitrated or mediated. For example, the rules of many courts require the parties to arbitrate or mediate prior to a case being scheduled for trial. It is believed that this will promote settlement in many cases. Such a proceeding is referred to as "court ordered," and if it is an arbitration, is not binding.

Strategy

ADR should always be considered in every case. It is the modern way of resolving disputes. It is especially good for injured persons, because it means that the litigation will cost less and will produce results faster.

Mr. Phillips often recommends that, if a client decides to turn down the settlement offer, he or she should agree to submit the case to an arbitrator or mediator. That way, it can be heard sooner and will be less expensive to prosecute. An arbitrator or mediator usually is in just as good a position to award damages as a jury or judge. Most important in many cases, arbitration or mediation will avoid the high costs of trial. Also important is the fact that the insurance company often is willing to waive their right to recover their costs from victim if the victim loses. Defense costs often come to at least $2,000.00 because the insurance company has to pay at least that much to take the victim's deposition, have her examined by their doctor, and pay filing fees. Those costs would rise if there were a trial. The losing party is required to reimburse the winning party for its costs after a trial.

If the case is arbitrated, Mr. Phillips also often recommends that a victim agree that the arbitrator's award be deemed final and binding on both parties. (This is not an option in mediation unless the mediation is converted to a "binding mediation.") Many arbitrations are considered non-binding and not final. That means that, after the arbitrator announces his or her decision, one or both parties can decide that they want a full trial. The arbitrator's award becomes null and void. On the other hand, if it is a binding arbitration, then the award becomes a final decision in the case. Neither party can reject the award and require a trial. Both parties are giving up their trial rights in advance, as well as their right to appeal a decision that they do not agree with. In exchange, they know that the arbitrator's award will mark the end of the case, and they do not have to spend more time or money on it.