USA Trends and Developments Contributed by: John Desmond, Alexis Taitel and Alice Samberg, Dickinson Wright PLLC
Civil litigation in the United States is notoriously expensive and time consuming. Cases often span years, during which time parties may encounter a host of time-, evidence-, and discovery-related obsta- cles. Over the last few decades, alternative dispute resolution (ADR) services have become increasingly popular, presenting other more cost-effective, efficient avenues through which parties may attempt to resolve their disputes. There are two main forms of ADR in the United States: mediation and arbitration, each of which has its own benefits and drawbacks. Although arbitration is often utilised as a sort of sub- stitute for formal litigation that results in a final and binding legal determination, an arbitration award is not automatically enforceable by the prevailing party against the non-prevailing party. This article is intend- ed to provide an overview of both types of ADR but will primarily focus on arbitration and court enforce- Litigation in the United States is a highly formalised and structured process that commences when a per- son or entity, claiming to have suffered some loss or harm due to the actions of another, initiates a law- suit. When a lawsuit is fully and finally resolved, the judge presiding over the case enters a “judgment” in favour of the prevailing party, making binding findings of fact and conclusions of law and issuing some, all, or none of the requested relief, as appropriate under the circumstances. A judgment is powerful, entitling the party who holds it – sometimes referred to as the “judgment creditor” – to the relief awarded by the judge. The judgment creditor is empowered by the judgment to demand the losing party’s compliance with the judgment if that party does not do so volun- tarily. For example, if the judgment creditor is entitled to be paid a certain sum of money by the losing party, but the losing party refuses to pay, the judgment cred- itor may ask a judge for the right to seize and sell the losing party’s property; garnish money from the losing party’s paychecks or bank accounts; and/or take a lien on the losing party’s real property. Some juris- dictions also permit law enforcement entities, such as sheriffs’ departments, to enforce certain types of judgments. In sum, when a party to a lawsuit becomes a judgment creditor, that party need not engage in ment of arbitration awards. The Power of a Judgment
additional steps or processes to access these rights (although additional court filings or procedural steps may be needed to bring about enforcement of a judg- ment). The judgment itself is automatically enforce- able when it is entered by the court. The Two Main Types of ADR: Mediation and Mediation is a relatively informal process aimed at exploring parties’ potential areas for compromise and settlement. The mediator is a neutral third party who facilitates discussions between the mediating parties but will not ultimately decide a “winner” or “loser” of the dispute. While the parties’ respective claims and defences are always germane, mediation does not necessarily assess or determine the merits of the parties’ arguments or supporting evidence. Rather, the mediator attempts to guide the parties toward a mutually agreeable compromise, bringing an early end to the lawsuit. By and large, mediators are individuals with significant legal backgrounds that have experi- ence in litigated disputes (in some jurisdictions, retired judges work as mediators), so they rely on that knowl- edge to assess the strengths and weaknesses of each party’s position and explain those to each party. While these assessments may mirror the analysis that each party’s counsel already conducted and discussed with the client, hearing that same information from a neu- tral third party can sometimes carry more weight with a client and tip a party in favour of settlement. Arbitration Mediation Parties may elect to mediate their dispute at any time during the pendency of their lawsuit (assuming they can get their opponent to the proverbial table), tempo- rarily deviating from their litigation activities to pursue a confidential, facilitated settlement discussion with a neutral mediator. Parties may opt to do so for a variety of reasons. Perhaps parties hope to settle their lawsuit and save the time and money that it would cost to litigate until a judge issues a final resolution. Or parties may prefer to work with a mediator to craft their own less conventional resolutions – eg, structured pay- ments, non-monetary terms, business accommoda- tions, or future conduct commitments – that courts may not have authority to order. Even if a lawsuit is not fully resolved through mediation, it can nonetheless settle certain claims, dismiss certain parties, or award
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