Before You File a Lawsuit

How to avoid the courtroom.

With the increasing amount of litigation in our society, it's important to give some consideration to alternative ways of dealing with disputes other than in the courtroom.

More and more, lawyers are recommending that their clients consider pursuing methods other than lawsuits as a way to settle disputes. These so-called "alternative dispute resolution" or ADR methods include a number of techniques. Some of these methods, such as conducting a trial in a private court system, tend to be fairly expensive, and lend themselves more to disputes between business than to disputes between individuals, or between an individual and a business. However, a couple of alternative dispute resolution techniques can sometimes be used by individuals at a substantial savings in time and money.

One increasingly popular method of alternative dispute resolution is mediation. In mediation, the parties to the dispute select an impartial person trained in negotiation techniques to help them arrive at a mutually satisfactory settlement of their problem. The mediator's role isn't to impose a solution, but to help the parties find areas of mutual agreement, and to help each of them understand the other side's position. In addition, a good mediator helps each side determine what it really wants to receive in order to come away satisfied with the settlement, rather than seeking the most it may be legally entitled to receive.

Mediation is usually conducted in a very informal matter, and the procedures mediators use vary. Some mediators like to have both parties in the same room, while some shuttle back and forth between the parties in an attempt to keep personality conflicts to a minimum. Mediation is a voluntary process, and generally either party may decide to end its participation in mediation at any time.

In many parts of the country, courts now require couples involved in certain kinds of disputes, such as those concerning child custody and visitation privileges, to attempt to resolve their differences through mediation before bringing their dispute into the courtroom.

If you decide to try mediation as a means of resolving a dispute, be sure to find a well-trained and qualified mediator to assist you. Although a number of lawyers, former judges, and social workers have established firms offering mediation services, just about anyone can claim to be a mediator. If possible, you and your opponent in the dispute should interview several mediators before settling on the one to assist you.

Another, somewhat different method of alternate dispute resolution is arbitration. In arbitration, your dispute is heard by one or arbitrators selected by mutual agreement of you and your opponent in the dispute. Although the procedures still aren't as formal as those used in the courtroom, they are much more formal than those used in mediation. Witnesses are sworn in and examined and cross-examined as they would be during a trial. Each side gets to make opening and closing statements, and the party whose complaint led to arbitration gets to rebut the defendant's claims.

After all the evidence is heard, the arbitrators take the case under consideration, and in most cases issue their decision within a few weeks of the hearing. In most cases, the arbitrator's decision is final, and the only basis for an appeal is that the arbitrator somehow violated the rules of arbitration in reaching his decision. However, since arbitrators don't issue explanations of their rulings, establishing a basis for an appeal is a difficult and daunting task.

In a growing number of contracts, such as the one you have with your stock brokerage and the warranty you receive when you purchase a new car or a major appliance, an arbitration provision is often included. Under this provision, if you and the other party cannot arrive at an acceptable resolution of a problem, you must take your claim to arbitration rather than filing a lawsuit. In many of these contracts, however, the decision of the arbitrator is binding only on the company. If you are unhappy with the outcome, you may still pursue your claim in court. Be sure you understand the terms of the arbitration clause in any consumer contract you enter, however, since some clauses do require both parties to abide by the arbitrator's decision.

You can obtain more information about arbitration from the American Arbitration Association, which has regional offices in major cities across the country. Or you can write to the AAA's national headquarters at 140 West 51st Street, New York, NY 10020.