USA Law and Practice Contributed by: Claudia Ray, Joseph Loy, Brandon R. Weber and Andrew (Keum Yong) Lee, Kirkland & Ellis LLP
10. Alternative Dispute Resolution 10.1 Dispute Resolution Mechanisms The parties may settle their civil dispute at any time. Depending on the jurisdiction and the judge’s individual practices, a court may require the parties to engage in one or more settle - ment conferences or other alternative dispute resolution (ADR) procedures prior to trial, or may offer voluntary procedures for accessing ADR resources. The parties may also voluntarily choose to engage in mediation, a non-binding ADR process whereby the parties and their attorneys meet with a neutral third party who is trained to facilitate settlement discussions. A mediator typically helps the parties reach their own voluntary settlement by assessing the strengths of the parties’ positions and identifying potential areas of agreement or disagreement. Even if the parties are not likely to reach a com - plete settlement, the ADR process may assist by “ stress testing ” a party’s case and identifying any potential areas of weakness before proceed - ing to trial. ADR can sometimes offer advantages over tra - ditional litigation. For example, parties frequent - ly resolve disputes more quickly through ADR than they would in court, which can also save costs. The parties are largely in control of the ADR schedule and therefore have more flexibil - ity to tailor the process to their unique needs. Many types of ADR are confidential, which can be appealing to parties who do not want the details of their dispute made public through court records.
The most common forms of ADR used in trade secret disputes are mediation and arbitration. Whereas mediation is non-binding, in arbitration a neutral third party – known as an “ arbitrator ” – will typically issue a written decision resolv - ing the case on the merits. Parties may agree to arbitrate after a conflict arises, although occa - sionally the parties will have agreed in a prior contract (such as a licensing, subcontracting or joint venture agreement) to resolve future dis - putes through arbitration. However, if the parties have not entered into any contract containing an arbitration clause, courts are unlikely to mandate arbitration between liti- gants on the basis of arbitration clauses found in contracts with a party’s employees, even if those employees may have been involved in acts of misappropriation. In an arbitration proceeding, the parties present evidence and arguments supporting their posi - tions to the arbitrator(s). The applicable proce - dural and evidentiary rules are usually deter- mined by the parties’ arbitration agreement. Arbitration is generally less rigid than litigation but more formal than mediation. Depending on the type of arbitration, the arbitrator’s decision can be either binding or non-binding. In non-binding arbitration, the parties are usually bound by the decision unless one of them rejects it and requests a trial. In binding arbitration, the parties agree that the arbitrator’s decision will be the final resolution of the case, and the parties will generally not have the opportunity to appeal the merits of the dispute.
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