The Secret to Avoiding Litigation

Posted by Danny Katz on October 07, 2015

Two guys avoiding litigation. Shaking hands in agreement.Would you like to know the secret to avoiding litigation? Well, unfortunately, there isn’t one. However, you can position yourself to avoid a lengthy and expensive court battle. Choose alternatives and plan ahead! One of the best ways to avoid it is by looking into Alternative Dispute Resolution (ADR). Often times, a provision ADR can be built into an agreement, and if possible, you should always attempt to include one.

There are four alternatives you should consider before going through litigation:

1. Negotiation is interchange between parties to reach a compromise. This does not involve a neutral third party. Typically, both parties try not to focus on who is right or wrong, but instead focus their efforts on reaching a mutual agreement that satisfies both parties.

The benefit of negotiation is that is a voluntary process and both parties remain in control of the outcome without outside influencers. This process is desirable to those who want to maintain a healthy business relationship without having the confrontation that litigation brings. If negotiation settles the issues at hand, it is always a good idea to memorialize the agreement in writing.

If both parties cannot reach a mutual agreement they often look to a neutral third party.

2. Mediation is a way to resolve disputes outside of court. It is usually informal and confidential and is conducted by a mediator. The mediator is a neutral party who has no personal interest in the dispute. They do not decide who is right or wrong and they do not issue a decision, instead they help both parties reach a mutual agreement.

The benefit of mediation is that it is an amicable way to resolve disputes, time friendly and cost effective.

For examples of mediation, check out University of Bath case study.

3. Arbitration is another way to resolve disputes outside of court. Unlike Mediation, arbitration involves an arbitrator who reviews the evidence, listens to both parties and then makes a decision. This is a more formal way of handling disputes than mediation while still being less formal than a traditional court hearing. Arbitration can be binding so both parties lose the right to appeal after the final decision is made. If you are going to arbitration, it is important to know whether it is binding arbitration, or non binding, which is more of a suggestion than an order.

 The benefit of Arbitration is that it is typically less expensive than litigation, both parties must agree in order for arbitration to take place, it is time friendly and it gives finality so that it ends the dispute.

For examples of arbitration, check out Sports Resolution case study.

 4. Collaborative Law is a more modern way of handling disputes. This involves both parties having their own attorneys to help them settle the dispute outside of court. Unlike mediation and arbitration, each attorney provides legal advice to their clients and acts as a negotiating partner. A 4-way meeting, which is a face-to face negotiation, is typically how the dispute is then settled. 

The benefits of collaborative law is that both parties avoid court, you have greater control over the agreement with a negotiating partner who is an expert in law, it is not a time consuming process all of the time, and it preserve relationships.

For examples of collaborative law, check out Collaborative case study.

If you’re writing a contract, ALWAYS try to build in a provision for Alternative Dispute Resolution. It is less formal, less stressful, and less expensive. Contact me today if you are looking for alternatives or if you need any legal advice. This Katz got your back!