USA Law and Practice Contributed by: Courtney Scobie, Jack Edwards and Andrea Whitley, Ajamie LLP
non-binding, meaning that the parties are not required to accept the mediator’s recommen- dations, and they retain the ability to pursue litigation if no agreement is reached. • Arbitration – arbitration is another popular ADR method, particularly in cases involv- ing arbitration agreements, such as those found in employment contracts, consumer agreements, and commercial contracts. In arbitration, a neutral arbitrator or panel of arbitrators makes a binding decision to resolve the dispute. The Federal Arbitration Act (FAA) governs arbitration agreements and awards in federal court. The FAA emphasises the enforceability of arbitration agreements, subject to certain statutory exceptions and contract defences. • Settlement conferences – federal courts frequently schedule settlement conferences to encourage parties to resolve their disputes before proceeding to trial. These conferences are presided over by a magistrate judge or another neutral and they provide a forum for parties to discuss their cases and explore potential settlements. Overall, ADR is a valued and integral compo- nent of the federal legal system in the USA. It allows parties to tailor dispute resolution pro- cesses to their specific needs and preferences and also promotes efficiency and reduces the burden on the court system. Additionally, it can lead to more creative and mutually satisfactory solutions than traditional litigation. 12.2 ADR Within the Legal System In the federal legal system of the USA, the pro- motion of ADR is a well-established practice, and ADR mechanisms are actively encouraged. Here is an overview of the extent to which the legal system promotes ADR. In general, ADR is voluntary ‒ although many courts require it as
part of the standard scheduling order issued with cases. In addition, arbitration clauses in contracts are strongly favoured and are typically
enforced by federal courts. 12.3 ADR Institutions
In the USA, institutions offering and promoting ADR are well-organised and play a significant role in the legal landscape. These institutions are responsible for providing resources, training and services related to various ADR methods, ensuring their effectiveness and accessibility. Organisations such as the American Arbitra- tion Association and the Judicial Arbitration and Mediation Services are widely used by parties and have well-established sets of rules and pro- cedures as well as lists of potential arbitrators and mediators. There are also many private ADR practitioners that can be used in state or federal matters. 13. Arbitration 13.1 Laws Regarding the Conduct of Arbitration The FAA is the primary federal law on arbitra- tion. It embodies public policy favouring arbitra- tion. This policy seeks to promote finality and efficiency in arbitration while allowing for limited judicial review. Under the FAA, if an arbitration agreement is valid under basic contract princi- ples, a court has limited authority to set aside an arbitral award. The USA is a signatory to the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the “New York Conven- tion”). Under the New York Convention, US courts are required to recognise and enforce foreign arbitral awards, subject to limited excep- tions. The USA is also a signatory to the Inter-
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