In 2014, I posted Carefully Craft Your Arbitration Clause if You Want Some, But not All, Disputes Arbitrated. A decision a few months ago, Trustivo, LLC v. Anthem, Inc. is a reminder that if a contract has a broad arbitration provision, a party may have little chance of getting court intervention – even in situations where the general validity of the contract is challenged – unless an appropriate carve-out is inserted.… Keep reading
As I discussed in Is Arbitration Quicker, Cheaper and Better for You?, sometimes it is in a party’s interest to have a dispute resolution mechanism that is long, onerous and expensive. Further, as the recent case Grand Wireless v. Verizon Wireless confirms, if you want some disputes resolved by arbitration and others resolved by a court, it is critical that your arbitration clause spell this out in detail.… Keep reading
Porreca v. The Rose Group was a class action lawsuit brought by Carly Porreca and Charles Walton, alleging that their employer, Applebee’s Neighborhood Grill and Bar, had violated the Fair Labor Standards Act. After Porreca was dismissed from the lawsuit, the restaurant management company that owned and operated the Applebee’s at which Porreca and Walton worked, the Rose Group, sought a stay of the litigation as well as an order (i) compelling Walton to arbitrate his claim individually, and (ii) barring him from pursuing a class action in that arbitration. In support of this request, the Rose Group relied on the fact that Walton had signed an agreement binding him to the company’s Dispute Resolution Program, which specifically stated the following:
… Keep readingThe Company and I agree that all legal claims or disputes covered by the Agreement must be submitted to binding arbitration …. We also agree that any arbitration between the Company and me is of an individual claim and that any claim subject to arbitration will not be arbitrated on a collective or a classwide basis ….
Litigation is time-consuming, is costly and, even in a business context, can be emotionally draining. Thus, it makes perfect sense that in-house counsel and business people, alike, often try to implement mechanisms to avoid having to file or defend suits. One such method, about which I posted earlier this year, is the use of a liquidated damages provision. Another that has become increasingly popular is to include a requirement that the parties meet and confer before they can file suit. A typical version of such a clause that I periodically see in contracts is one like the following:
… Keep readingBefore a party may file suit, it first must give the other party written notice of the dispute. After notice is received, representatives of each party shall meet within 5 days in a good faith effort to resolve the dispute. If the dispute cannot be resolved within 5 days after such meeting, suit may be filed.
Over three prior posts on the subject of mediation, I have discussed what mediation is and is not, explained the process of how mediation works, and most recently, examined under what circumstances it makes sense to mediate. Here, I will conclude this series of mediation posts by breaking down how, once you reach an agreement in principle, you limit the risk of losing it.
After a very long day of back and forth with your mediator, you authorize one last proposal for the mediator to take to the other side. The mediator comes back 20 minutes later and tells you that your offer has been accepted. The mediator then invites all of the parties and their counsel into the same conference room in which you began the mediation process nine hours earlier, to go over the terms. One by one, he goes through each of the six settlement terms, and each time both sides indicate that they agree.
While you do and should feel a sense of satisfaction (even if the settlement is not exactly what you had hoped it would be), do not think for one minute that the process is over. Indeed, one of … Keep reading
After having read Mediation 101 and Mediation 201, you should have a solid understanding of what mediation is and how it works. Now, let’s discuss when it makes sense to mediate.
While different types of cases get resolved through mediation every day, mediation is not likely to be successful in every case. As a general rule, when parties agree to mediate, it is implied that they are willing to at least consider some sort of compromise or “outside the box” resolution to the dispute (it is for this reason that I believe court mandated mediation often leads to nothing more than a waste of time and money). Part of the reason for this is that no matter how reasonable a party’s position may be, mediators are wired to be impartial, and telling one party from the outset that it must capitulate goes against mediator DNA. Another reason for this is that all but the most inexperienced litigators know that mediation implies some sort of compromise. Thus, if a party claims at the mediation that it will not compromise one bit, such a position is not likely to be taken seriously – even if it is genuine. Likewise, a … Keep reading
Hopefully, Mediation 101 gave you a clear understanding as to what mediation is. Now, let’s discuss how mediation works.
While selecting a mediator can be critical, unlike when selecting an arbitrator, parties should not be very concerned that a biased mediator might force them to enter into a “bad” settlement. Because mediation is voluntary, a mediator simply does not have the power to force a party to agree to any settlement with which that party is not completely satisfied. What is crucial about the selection of the mediator, however, is that s/he has credibility with the ultimate decision makers, i.e., the parties, not counsel. Without credibility, the parties are not going to give the mediator’s comments the full consideration that might lead them to modify their positions and settle. Consequently, it is important to ask questions like the following:
Over the past 15 years, Alternative Dispute Resolution (ADR) has become all the rage as parties try to limit the time and expenses they might expend if forced to litigate disputes in court. One of the ADR mechanisms whose use has exploded in growth is mediation. Indeed, it seems that every month or two I see an announcement that a recently retired judge is joining one of the big mediation firms, such as JAMS, or is starting his or her own mediation practice.
While I often engage in mediation as a way to try to resolve my clients’ disputes, it is important to understand what mediation is, and what mediation is not, so that you can evaluate whether it might be an appropriate vehicle to use in an effort to settle a particular dispute that you or your business might have.
Although people often confuse mediation with arbitration, the only real similarity is that parties generally cannot be forced to either mediate or arbitrate a dispute; they must voluntarily agree to engage in either process. Substantively, however, mediation could not be more different than arbitration.… Keep reading
In an earlier post, “Is Arbitration Quicker, Cheaper and Better for You?” I discussed why having a faster and less expensive dispute resolution mechanism may not be in your best interest. Make no mistake, however, the differences between traditional litigation and arbitration go well beyond the time and expense it takes to complete the respective processes. The following are a few of the more notable substantive distinctions between these two dispute resolution mechanisms:
As many in-house counsel are painfully aware, litigating a dispute in court is generally time-consuming and expensive. Further, given a losing party’s right to appeal an adverse verdict, and with all due respect to Yogi Berra, litigation ain’t even over when it’s over. As a result, some companies choose to include arbitration clauses in their agreements, believing that this will greatly reduce the amount of time and expense their company will have to incur if a significant dispute arises that cannot be resolved.
While it usually is quicker and less expensive to arbitrate a dispute rather than to litigate in court, that is not always the case. For example, while it only would cost $375 to file a $5 million claim for breach of contract in the Federal District Court, the fees for commencing commercial arbitration before the American Arbitration Association (“AAA”) are $14,600 – even if the case is extremely simple. (Fees under the AAA Commercial Rules are tied exclusively to the amount of damages being claimed.)… Keep reading
