Legal Representation and Alternative Dispute Resolution
Describe the role of attorneys in the dispute-resolution process.
List the differences between litigation and the other forms of dispute
Discuss the processes of negotiation and mediation.
Identify the steps in the arbitration process.
Define summary jury trials and mini-trials.
Attorneys and Dispute Resolution
the diversity of legal issues that attorneys may confront on a day-to-day basis,
they share a common approach to the law because their education nearly always
involves an in-depth study of basic legal principles and concepts.
Roles of an Attorney
Adviser – advises
a client on steps to take to avoid possible legal problems.
Drafter – writes
contracts and other documents for clients.
Negotiator – persuades,
argues, or settles with another party on a client’s behalf.
Advocate – presents
a client’s position in court.
A client must disclose all relevant information to his or her attorney so
the attorney can determine the best course of action.
The attorney must keep the information confidential—the attorney-client
privilege prevents a court and other government bodies from compelling
disclosure of the information.
Decision to File a Lawsuit
Whether the law provides a remedy.
Whether the person can expert to prevail.
Whether the expected benefit will compensate for expenses and
other costs, including any business lost as a result of the lawsuit and
Decision to Defend
Against a Lawsuit
Whether the relationship with the plaintiff is too valuable to
Whether the publicity surrounding a trial would damage the
defendant’s reputation or image.
Whether the dispute could be resolved in a less costly manner.
The Search for
Alternatives to Litigation
resolution (ADR) is less costly, less time-consuming, and an increasingly
attractive alternative to litigation in the courts.
The Search for
Alternatives to Litigation
Forms of ADR include:
Negotiation and Mediation
Alternative dispute resolution methods differ in the degree of formality
involved and the extent to which third parties participate in the process.
What is the primary difference between negotiation and mediation?
Negotiation and Mediation
The parties come together, with or without attorneys to represent them,
and try to reach a settlement without the involvement of a third party.
The parties themselves reach an agreement with the help of a third party,
called a mediator, who proposes solutions.
A more formal method of ADR in which the parties submit their dispute to
a neutral third party, the arbitrator, who renders a decision, which may or may
not be legally binding, depending on the circumstances.
Some courts refer certain cases for arbitration before allowing the cases
to proceed to trial; in most cases, this
kind of arbitration is nonbinding on the parties.
ADR Around the Globe
Other countries also encourage mediation, arbitration,
and other forms of ADR. Examples:
Japan has recently authorized
neutral panels to act as mediators in product liability suits.
China passed an arbitration law in
1995 that spells out what types of disputes are arbitrable, the form and content
of valid arbitration clauses, etc., all of which should make it simpler for
disputes to be settled through ADR.
The Federal Arbitration Act
The Federal Arbitration Act (FAA)
does not establish a set arbitration procedure.
The FAA provides the means for
enforcing the arbitration procedure that the parties have established for
The FAA covers any arbitration
clause in a contract that involves interstate commerce—even where the business
activities may have remote connections or minimal effects on interstate
Case 4.1 Hooters of America, Inc. v.
Annette Phillips was employed by Hooters restaurant from 1989-1996.
Five years after she was hired, Hooters implemented an alternative
dispute-resolution program which was not supplied to the employees.
In 1996, Phillips was allegedly sexually harassed by Gerald Brooks, a
Hooters’ official. Her manager
told her to “let it go”, so she quit. Phillips threatened to sue and was
told by Hooters that she needed to submit her claim to arbitration, which she
refused. Hooters filed a suit against Phillips to compel arbitration
but was denied by the court.
employers are including arbitration clauses in contracts with their employees.
Some argue that while it may be fair to enforce such clauses in contracts
between parties of equal bargaining strength, it is not fair to enforce them in
employment contracts—because employees usually have no right to negotiate the
terms of the contract. Do you agree
with this argument?
State Arbitration Statutes
Thirty-four states and the District of Columbia have adopted the Uniform
Arbitration Act, under which courts generally give full effect to voluntary
agreements to arbitrate disputes between private parties.
Those states that have not adopted the Uniform Act nonetheless follow
many of the practices specified in it.
The Arbitration Process
The three steps of
International standards for the recognition of arbitration agreements and
awards are set out in the U.N. Convention on the Recognition and Enforcement of
Foreign Arbitral Awards.
Article V(2) provides an exception to enforcement where the arbitration
clauses are “contrary to the public policy” of the relevant country.
businesspersons evaluate the policies of different countries before deciding
where to arbitrate their disputes?
Enforcement of Agreements to Submit to Arbitration
When a dispute arises as to whether or not the parties have agreed to
submit a particular matter to arbitration, one party may file suit in court to
The court’s role is essentially interpreting a contract, either the
arbitration clause or submission agreement, to determine to what the parties
have committed themselves.
Case 4.2 Wright v. Universal Maritime
Wright was a longshoreman and member of
the International Longshoreman’s Association (ILA). The ILA provides workers to the South Carolina Stevedores
Association (SCSA), with which they
had a collective bargaining agreement. Wright
suffered a job-related injury that ended in
disability. After recovering, the
SCSA would not hire him because of the disability.
Wright filed suit claiming discrimination and violation of the Americans
with Disabilities Act (ADA). The court ruled in favor of the defendants.
compulsory arbitration contradict the public policy enunciated in statutes
specifically designed to protect employees’ rights, such as the right to be
free from discrimination (see Chapt. 18)?
Arbitration Clauses in Employment Contracts
Arbitration is easier, faster, and less costly than litigation. Therefore, more businesses are including arbitration clauses
in their contracts. What happens if
a potential employee objects to the clause?
Is this mandatory condition enforceable?
A majority of courts have followed the Gilmer precedent of the U.S.
Supreme Court in 1991.
have been examining the issue of mandatory arbitration more closely.
victims of employment discrimination prefer to litigate their claims in a
judicial forum rather than having them arbitrated, even assuming that
arbitration proceedings would be unbiased and would not violate due process
Setting Aside an
No award will be enforced
if compliance with the award would result in commission of a crime or would
violate public policy.
Setting Aside an
An arbitration award may also be set aside because of defects in the
Award was result of corruption,
The arbitrator exhibited bias or
The arbitrator’s actions
substantially prejudiced the rights of one of the parties.
The arbitrator exceeded his or
Setting Aside an
Arbitration awards may be set aside for a number of reasons, but courts
do not generally look at the merits of the dispute, the sufficiency of the
evidence presented, or the arbitrator’s reasoning in reaching a particular
Since the parties freely contracted to enter into arbitration, the courts
will not interfere simply because one side feels that it received a “bad
Case 4.3 Orlando v. Interstate Container
After Interstate denied Orlando’s request to return to work and an
arbitrator also rendered a decision in favor of Interstate, Orlando brought suit
claiming such decision was not final or binding because the agreement to
arbitrate failed to state so.
The Court of Appeals held that the arbitration award was not binding
unless the parties specifically agreed that it should be.
Why might the
parties to an arbitration agreement prefer that the arbitration award not be
Case 4.4 Garvey v. Roberts
In 1986, 1987, and 1988, the
Major League Baseball Players Association complained that the Major League
Baseball Clubs had engaged in collusion to underpay some of the players.
The grievance was submitted to arbitration before a panel.
The association and the clubs
entered into a settlement agreement, under which the clubs set up a fund of $280
million to be distributed to victims of the collusion.
Steve Garvey, player for the
Padres from 1983-1987, filed for damages claiming his contract was not extended
due to the collusion. Garvey lost
Is it fair for the courts to
give such deference to arbitrators’ findings of facts?
Disadvantages to Arbitration
has some disadvantages:
Unpredictable, since arbitrators
are not required to follow prior precedents, but must only follow whatever rules
have been provided by the parties.
Expensive, sometimes as expensive
Time consuming, since discovery is
often unavailable, the parties may have to call more witnesses than they would
The Integration of ADR and Formal Court
Many jurisdictions at both the state and federal levels are integrating
alternative dispute resolution into the formal legal process.
Utilizing methods such as arbitration and mediation within the
traditional framework may relieve the logjams afflicting most of the nation’s
Court-Mandated ADR vs. Court-Annexed Arbitration
Most states (and about half the federal courts) have adopted programs to
encourage the parties to settle their disputes through ADR.
Some courts require parties to submit to ADR before proceeding to trial.
Some states require the parties to undergo non-binding arbitration before
proceeding to trial.
Note that in court-annexed arbitration, either party may reject the
Today, courts are increasingly turning to mediation rather than
arbitration as an alternative to litigation.
One reason for its popularity is that its goal, unlike litigation, is for
opponents to work out a resolution that benefits both sides, resulting in a high
rate of satisfaction with the outcome.
Summary Jury Trials
A kind of trial in which litigants present their arguments and
evidence and the jury renders a nonbinding verdict.
Other Forms of ADR
A private proceeding in which each party’s attorney argues the
party’s case before the other party.
Often, a neutral third party acts as an adviser and renders an opinion on
how a court would likely decide the issue.
The parties rent a judge to hear their case and render a verdict to which
the parties agree to be bound.
Several firms now provide for this kind of private justice.
ADR Forums and Services
Services facilitating dispute
resolution outside the courtroom are provided by both government agencies and
Sources of private arbitration
American Arbitration Association
State and local arbitration
Better Business Bureau
What roles do attorneys play in resolving disputes?
What are some of the similarities and differences between litigation and other
forms of dispute resolution?
How do the processes of negotiation and mediation differ?
What are the steps in the arbitration process?
What are the differences between voluntary arbitration and court-annexed