Dispute Resolution: Know what you want and select the right process

Edmund Sikorski Jr.

The choice of which dispute resolution process to use boils down to answering one basic question: Do you want to actively participate in the resolution outcome or do you want someone else to impose a solution upon you?

The answer will determine the choice of dispute resolution process, between mediation (where a neutral third party helps the disputants come to a consensual decision on their own); or litigation (including arbitration) where a third party imposes a solution and there is a “winner” and a “loser.”

Some parties may be required (because of a contract between them that requires the filing of a complaint) to commence litigation or arbitration proceedings in order to bring the parties into the Alternative Dispute Resolution arena. That action is a strategic decision—not a commitment to seek a litigated outcome.

There are three basic types of dispute resolution in the American system of civil conflict resolution:  mediation, arbitration and litigation.

Mediation

In mediation, the parties employ a qualified neutral third party to help them come to a consensus on their own that resolves the conflict. The parties are encouraged to explore their respective interests (what they really want/what is important to them) and come to a mutually satisfactory solution they can live with.The process is confidential.

It is generally accepted this method of conflict resolution is the most efficient and cost effective. Courts report mediated resolutions are more likely to be complied with by the parties than litigated resolutions. 

In evaluating the suitability of this method, the attorney should address the following issues with the client:

1) What are the client’s goals in the litigation?

2) Why does your client want those goals (especially in non-monetary cases)? 

3) The same questions should be asked about the other side:  What do they want and why to they want it?  

4) What are the strengths and weaknesses of your case? Carefully consider the opposing side’s view of the case and their strengths and weaknesses.

5) What facts and legal issues are subject to agreement or disagreement?

6) What points are you able to concede?

7) Are there motions that are likely to be filed that make it more or less desirable to settle now?

8)  Are there deadlines that make it more or less desirable to settle now?

9) What are the estimates of provable damages and the likelihood of recovery?

10) Is your client economically and emotionally prepared to take the risks inherent in trial?

11) What is the downside risk to your client?

12) What is the downside risk to the opposing party?

13) How much is your client willing to pay, accept, do, or refrain from doing in order to settle the case?

A new empirical study by the Maryland State Justice Institute in January 2016 made the following finding: “An important benefit to ADR is that the participants who reached agreements in ADR are less likely to return to court for enforcement action, thus creating more efficiency in case processing.”

This finding confirms the proposition that the conduct of a fair and impartial mediation process is central to the legitimacy of the decisions reached and to the individual’s acceptance of those decisions as final.

Case Evaluation

Unique to Michigan is a process called Case Evaluation governed by MCR 2.403.

It is a process through which a panel of three attorneys, appointed by a court and not involved in the dispute, hears issues specified by the parties and then renders a monetary evaluation of the case. Penalties may be attached for not accepting the award if the rejecting party does not improve upon a trial verdict by 10 percent over the award.

A 2011 Report to the SCAO office included a major finding that twice as many cases were settled “at the table” in mediation compared to the acceptance rate of case evaluation awards. This is an intermediate process where some third party tell tells everyone what to do.

Arbitration

Arbitrators listen to each side of the conflict and unilaterally decided a binding outcome, i.e., arbitrators tell everyone what to do.

Generally speaking, arbitration is more expensive than mediation but much less expensive than courtroom litigation. The disputants can often negotiate almost every aspect of the arbitration process, including the standards of evidence. The process is conducted without the strict application of courtroom evidentiary standards and requirements. Arbitration decisions are usually confidential, final, and not subject to appeal except in a very few circumstances.

Litigation

In litigation, a third party tells everyone what to do. The setting is public, formal, and must adhere to a pre-ordained set of procedural and substantive rules. A judge or jury is responsible for evaluating the competing positions and facts, weighing the evidence as they deem appropriate, and make a decision (ruling). The third-party decision is subject to appeal to higher courts.

Client participation and consent to the decision to “bet the farm” is absolutely essential for the simple reason that someone will win and someone will lose.

Conclusion

The Supreme Court Administrative Office recently reported that less than 1 percent of filed cases concluded by verdict of a judge or jury in 2016.

Oakland County Circuit Judge James Alexander informed the participants of the Michigan Institute Business Court Judicial & Practitioner Seminar held on May 2, 2017, that the motion caseload in Oakland County only permits three minutes of judicial attention per case.

These facts alone compel the conclusion that justice is well served by observing and implementing the wisdom given us by Abraham Lincoln: “Discourage litigation. Persuade your neighbor to compromise whenever you can. As a peacemaker, the lawyer has superior opportunity of being a good man. There will still be business enough”

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Edmund J. Sikorski, Jr., recipient of the 2016 National Law Journal ADR Champion Trailblazer Award, is an approved Washtenaw County civil mediator, an incoming co-chair of the Washtenaw County Bar Association ADR Committee, and a Florida Supreme Court certified circuit civil and appellate mediator. He can be reached at edsikorski3@gmail.com.