1. Alternative Dispute Resolution

Alternative Dispute Resolution

Playlist: 18 Videos: 45 Minutes



Topics: Learning Material

Introduction to Alternative Dispute Resolution (ADR)
This chapter explores the resolution of disputes between individuals. More specifically, it explores the methods that individuals use to resolve disputes without resorting to civil litigation. Alternative dispute resolution includes any method or procedure for achieving this purpose; however, there are two commonly recognized processes - arbitration and mediation. Employing these resolution methods may be mandatory or voluntary. Further, these methods may not be exclusive. That is, the parties may employ mediation, arbitration, and litigation, all within the realm of a single dispute. This chapter will explore the procedures and general legal principles applicable to these processes. For further written and video explanation, discussion and practice questions, see Alternative Dispute Resolution (Intro)

What is a “Settlement”?
  • Work out a legal dispute
  • Agreement to resolve the situation.

For further written and video explanation, discussion and practice questions, see What is a "Settlement"?

What is “Alternative Dispute Resolution”?
  • Alternative to resorting to litigation.

⁃ Mediation

⁃ Arbitration

For further written and video explanation, discussion and practice questions, see What is "Alternative Dispute Resolution"?

Advantages and Disadvantages of ADR
  • Lowers costs associated with litigation.
  • Avoids allowing a jury to decide a dispute.
  • Knowledgeable professionals to resolve the dispute.
  • Private process
  • Maintain the company’s brand or reputation
  • Maintain business relationship between the parties

For further written and video explanation, discussion and practice questions, see What are the Advantages and Disadvantages of ADR?

What is “Mediation”?
  • Employ a third-party mediator, to assist in resolving the dispute.
  • Unbiased and disinterested third party.
  • Special training in dispute resolution
  • In-depth knowledge of the subject-matter of the dispute.

For further written and video explanation, discussion and practice questions, see What is "Mediation"?

Advantages and Disadvantages of Mediation
  • Control
  • Costs
  • Privacy
  • Relationships

For further written and video explanation, discussion and practice questions, see What are the advantages and disadvantages of Mediation?

How to initiate a Mediation
  • Mandatory Mediation - Pursuant to a court order or pursuant to the law.
  • Voluntary Mediation - Pursuant to agreement among the parties.

For further written and video explanation, discussion and practice questions, see How Do Parties Initiate Mediation?

Mediation Process
  • Delivery of Evidence
  • Introductions
  • Initial Statements
  • Private Sessions
  • Formalization of Agreement

For further written and video explanation, discussion and practice questions, see What is the process for carrying out a mediation?

Challenging a Mediation
  • Agreement between the parties controls
  • Cannot pursue litigation for the underlying dispute.
  • May attack validity of the agreement.

For further written and video explanation, discussion and practice questions, see What is the process for challenging a mediation agreement?

What is “Arbitration”?
  • Third-party decision-maker resolves dispute.
  • Unrelated and unbiased third parties
  • Acts as judge and jury in deciding the dispute.
  • Results in an arbitrator’s award.

For further written and video explanation, discussion and practice questions, see What is "Arbitration"?

Advantages of Arbitration
  • Expertise
  • Resolution
  • Costs
  • Privacy
  • Relationships

For further written and video explanation, discussion and practice questions, see What are the Advantages of Arbitration

Voluntary vs Mandatory Arbitration
  • Voluntary Arbitration

Pre-dispute Arbitration Clause

Post-dispute Arbitration Clause

  • Mandatory Arbitration

⁃ Required by state or federal law

For further written and video explanation, discussion and practice questions, see Initiating Arbitration - Voluntary and Statutorily Mandated Arbitration?

Arbitration Procedure
  • Subject-matter of the Arbitration
  • Choosing Arbitrators
  • Submit to Arbitration
  • Agreement with Arbitrator(s)
  • Arbitration Proceeding
  • Award
  • Enforcement

For further written and video explanation, discussion and practice questions, see What is the procedure for carrying out an arbitration?

Federal Arbitration Act
  • Voluntary arbitration = parties agree upon the rules

⁃ Model rules

  • Mandatory arbitration, state law or court order dictates the rules governing the arbitration.

⁃ Federal Arbitration Act (FAA)

For further written and video explanation, discussion and practice questions, see Rules governing the arbitration - Federal Arbitration Act

Judicial Review of Voluntary Arbitration
  • Review of Voluntary Arbitration Awards

⁃ Based upon the arbitrator exceeding her authority or validity of the arbitration agreement.

⁃ Based in contract law

For further written and video explanation, discussion and practice questions, see What is the Judicial Review of Voluntary Arbitration?

Judicial Review of Mandatory Arbitration
  • Review of Mandatory Arbitration
    • 6th and 7th Amendments of the Constitution.
    • Statutorily mandated arbitration requires a higher level of judicial review
    • Party can reject the arbitrator’s award and seek de novo judicial review

For further written and video explanation, discussion and practice questions, see What is the Judicial Review of Mandatory Arbitration?

Judicial Review under FAA
  • Federal court must confirm arbitration results.

For further written and video explanation, discussion and practice questions, see What is Review under the Federal Arbitration Act?

Enforcing Arbitration Awards
  • States establish procedures.
  • Under the FAA, awards must be registered with the court system
  • Certification of judgment order for a judge’s signature.
  • Enforce like a judgment

For further written and video explanation, discussion and practice questions, see How are Arbitration Awards enforced?


Flash Card: Study Practice

Q1
_________ means that the parties to a legal dispute work out their differences and enter into an agreement to resolve the situation.

Q2
The benefit of a settlement of a legal dispute is that the parties ____________

A2
maintain control over the outcome

Resource Video: https://thebusinessprofessor.com/settlements/

Q3
Businesses often settle legal disputes to ___________.

A3
Avoid the high cost of litigation; Maintain privacy; Preserve the relationship with the other party

Resource Video: https://thebusinessprofessor.com/settlements/

Q4
Mediation and Arbitration are the two most common forms of _________.

A4

Q5
Disputing parties must begin a lawsuit prior to using any form of ADR. True or False

Q6
Filling a lawsuit precludes the use of ADR in conjunction with the litigation. True or False

Q7
_________ Is/are (an) advantage(s) of using ADR

A7
Cost, No Jury, Privacy, Business Relationship

Resources Video: https://thebusinessprofessor.com/what-are-the-advantages-of-alternative-dispute-resolution/

Q8
ADR is generally for cheaper for the disputing parties than litigation. True or False

Q9
Businesses generally prefer ADR to litigation because it avoids allowing a jury to decide a dispute. True or False

Q10
Litigation and court records are open to the public, whereas ADR is a private affair. True or False

Q11
ADR can preserve the on-going business relationship between the parties, where litigation often destroys the relationship. True or False

Q12
________ is the process by which parties to a legal dispute employ a third party to assist in resolving the dispute.

A12

Q13
Mediators are generally _________

A13
Unbiased and disinterested third party; has undergone special training in dispute resolution; possesses in-depth knowledge of the subject matter of the dispute; generally licensed

Resources Video: https://thebusinessprofessor.com/mediation/

Q14
Which of the following is not a characteristic of mediation?

A14
The dispute is certain to be resolved.

Resource Videos: https://thebusinessprofessor.com/mediation-pros-cons/

Q15
_____________ is initiated pursuant to a court order or pursuant to the law (statute or regulation).

Q16
In mandatory mediation, the parties are forced to arrive at a settlement. True or False

Q17
______________ is initiated pursuant to agreement among the parties.

Q18
Parties may agree to voluntary mediation before a legal dispute arises or afterward. True or False

Q19
The voluntary mediation process is less rigid than that of mandatory mediation. True or False

Q20
Which of the following is not a common step in the mediation process?

Q21
A successful mediation results in a _________.

Q22
A mediation agreement resolving a dispute replaces the underlying dispute. True or False

Q23
If the parties to a mediation enter into a negotiated settlement agreement, the only way to attack the validity of the mediation is ________.

A23
Challenge the validity of the settlement agreement.

Resource Video: https://thebusinessprofessor.com/how-do-parties-challenge-a-mediation-agreement/

Q24
If the party is successful in rescinding (doing away with) the mediation agreement, the parties would be free to litigate the underlying dispute or pursue other forms of ADR. True or False

Q25
_________ is a form of ADR in which the parties choose to forgo litigation and solve their problems through a third-party decision maker.

A25

Q26
In an ___________ the parties are hiring one or more unrelated and unbiased third parties to decide the legal dispute.

A26

Q27
Arbitrator(s) act(s) as judge and jury in deciding the dispute. True or False

Q28
Arbitration yields a final resolution of the dispute in the form of an arbitrator’s ________.

Q29
Parties may generally enforce an arbitrator’s award similarly to a judgment. True or False

Q30
Which of the following is NOT an advantage of arbitration?

Q31
Arbitrators are generally chosen to resolve a dispute based upon their _______.

A31
expertise in the subject matter

Resource Video: https://thebusinessprofessor.com/what-are-the-advantages-of-arbitration/

Q32
Arbitrations allow the disputing parties to maintain more control than in a mediation. True or False

Q33
__________ means that the parties agree to submit a dispute (or any dispute) to arbitration.

Q34
__________ generally involves a contract between parties that may contain an arbitration clause.

Q35
__________ is where the parties may enter into an agreement after the dispute arises to resolve a dispute through arbitration.

A35
Post-dispute Voluntary Arbitration

Resource Video: https://thebusinessprofessor.com/statutorily-mandated-arbitration/

Q36
The rules and procedures applicable to an arbitration depend on the jurisdiction follows common law or as a statute. True or False

Q37
The dispute in an arbitration may be a question of fact, law, or a mixed question of fact and law. True or False

Q38
Which of the following is NOT a step in the arbitration process?

A38
Filing the dispute with the Clerk of Court

Resource Video: https://thebusinessprofessor.com/procedure-for-carrying-out-an-arbitration/

Q39
In most cases, arbitration involves an odd number of arbitrators. True or False

Q40
The judicial rules of evidence and procedure apply in an arbitration. True or False

Q41
The arbitration agreement and the rules employed by the arbitrators may limit the amount or type of award the arbitrators can issue. True or False

Q42
Arbitrators generally provide the reasoning for their decision in the form of an __________.

Q43
In a ___________, the parties may agree upon the rules to govern the proceeding.

A43
voluntary arbitration

Resource Video: https://thebusinessprofessor.com/federal-arbitration-act/

Q44
In a ___________, state law, federal law, or court order dictates the rules governing the arbitration.

A44
mandatory arbitration

Resource Video: https://thebusinessprofessor.com/federal-arbitration-act/

Q45
Notably, in 1925, Congress passed the __________ to encourage the use of arbitration to resolve conflicts.

A45
Federal Arbitration Act

Resource Video: https://thebusinessprofessor.com/federal-arbitration-act/

Q46
__________ applies when the dispute is subject to mandatory federal arbitration or when there is an voluntary arbitration agreement and the dispute involves federal law.

A46
Federal Arbitration Act (FAA)

Resource Video: https://thebusinessprofessor.com/federal-arbitration-act/

Q47
The FAA requires that where the parties have agreed to arbitrate, they must do so in lieu of going to court. True or False

Q48
Parties may challenge an arbitration award based upon ____________.

A48
the arbitrator exceeding her authority; a contractual defense to the validity of the arbitration agreement

Resource Video: https://thebusinessprofessor.com/judicial-review-voluntary-arbitration/

Q49
That is, the court will overturn an arbitrator’s award based upon an error in the application of law or determination of a fact. True or False

Q50
The fact that the arbitrator made an erroneous ruling or reached erroneous findings of fact are not grounds for setting aside the award. True or False

Q51
The following situations may render an arbitrator’s award void when it

A51
requires the parties to commit a crime; is fraudulent or arbitrary

Resource Video: https://thebusinessprofessor.com/judicial-review-voluntary-arbitration/

Q52
Many courts have held that mandatory arbitration statutes that close the courts to litigants are void as against public policy and are unconstitutional. True or False

Q53
Mandatory arbitration is generally deemed constitutional if __________.

A53
fair procedures are provided by the legislature; ultimate judicial review is available

Resource Video: https://thebusinessprofessor.com/judicial-review-mandatory-arbitration/

Q54
If a party can reject the arbitrator’s award and seek de novo judicial review, mandatory arbitration is generally considered constitutional. True or False

Q55
If a party rejects an arbitrator’s award and challenges the case at trial, the court may impose sanctions on the party who fails to improve its position. True or False

Q56
Under the Federal Administration Act, once an award is entered by an arbitrator or arbitration panel, it must be __________.

Q57
Per Federal Arbitration Act procedures, awards must be confirmed within _____. A losing party must object and challenge the award within ______.

Q58
In a ____________, a party must generally initiate a legal action to enforce an arbitration award as a contract.

A58
common-law arbitration jurisdiction

Resource Video: https://thebusinessprofessor.com/how-are-arbitration-awards-enforced/

Q59
In a ____________, the government establishes a process for enforcing arbitration awards.

A59
statutory-arbitration jurisdiction

Resource Video: https://thebusinessprofessor.com/how-are-arbitration-awards-enforced/


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