Alternative Dispute Resolution Chapter 3I. Negotiation and Mediationa. Negotiation: the parties attempt to settle their dispute informally, withor without attorneys. They try to reach a resolution without the involvement of a third party acting as mediator.i. Preparation for Negotiationii. Assisted Negotiation: involves a third party who helps the disputing partiesb. Mediation: the parties attempt to come to an agreement with the assistance of a neutral third party, called a mediator. The mediator does not decide the matter, he or she merely facilitates a resolution. The result may be bindingi. Advantages: non-adversarialii. Disadvantages: fees and the absence of deadlines and sanctionsII. Arbitrationa. Arbitration: a more formal method of ADR, in which a neutral third party of a panel of experts hears a dispute and renders a decision, which can be legally binding. i. Almost any commercial matter can be submitted to arbitration;often an arbitration clause is included in a contractii. Federal and many state governments favor arbitration over litigationb. The Federal Arbitration Act: requires courts to defer to a voluntary arbitration agreement in a case governed by federal law; FAA doesn’t set out arbitration procedures, but does provide for court orders to compel arbitration under an arbitration agreement and to conform an arbitration awardc. State Arbitration Statues: virtually all states follow the federal approachd. The Arbitration Process: includes submission, the hearing and an awardi. Submission: identifies the parties, the nature of the dispute, theamount in controversy, and the place for arbitrationii. Hearing: what power the arbitrator has at the hearing is dictated by the parties who decide the rules for the proceeding or agree to let the arbitrator set the rules; generally the rules are less formal than judicial rules, though the format may be similar to a trialiii. Award: usually, an arbitrator must render an award within 30 days of the hearing; an award must usually be in writing but nostatement of conclusions or reasoning is requirede. Enforcement of Agreements to Submit to Arbitration: as long as an agreement to submit to arbitration does not compel an illegal act or contravene public policy, a court will enforce iti. The Issue of Arbitrability: at the request of a party to compel arbitration, a court may decide whether an arbitration agreement covers a particular disputeii. Compulsory Arbitration Agreements: generally, mandatory arbitration clauses in employment contracts are enforceable; arbitration clauses in consumer contracts will NOT be enforcedif their enforcement would be manifestly unfair or oppressivef. Setting Aside an Award: losing party may appeal an arbitrator’s award to a court, or winning party may seek a court order compelling the other party to comply with the awardi. Fact Findings and Legal Conclusions: the right to appeal an arbitrator’s award is limited, as an arbitrator’s award is usually final. A court will rarely review the merits of the arbitrated dispute, but the arbitrator’s decision may be set aside for misconduct, fraud, corruption or abuse of power. ii. Public Policy and Legality: no award will be enforced if compliance would result in the commission of a crime or conflict with, or undermine, public policyiii. Defects in the Arbitration Process: FAA provides 4 grounds on which awards may be set aside1. Award was the result of corruption, fraud or other ‘undue means’2. Arbitrator exhibited bias or corruption3. Arbitrator refused to postpone the hearing, despite sufficient cause, refused to hear pertinent evidence, or otherwise acted to substantially prejudice the rights of one of the parties4. The arbitrator exceeded his or her powers or failed to use them to make a mutual, final and definite awardiv. Waiver: a party who fails to make a timely objection to an award forfeits the right to challenge itv. Conflicts of Law: where there is a conflict, federal law prevailsvi. Choice of Law: parties may choose the law of a specific state to govern their arbitration agreementg. Disadvantages of Arbitration: include: i. Unpredictability of resultsii. Lack of required written opinionsiii. Difficulty of appealiv. Possible unfairness of procedural rulesv. ExpenseIII. Integration of ADR and Formal Court Proceduresa. Court Mandated ADR: courts are increasingly requiring that parties attempt to settle through ADR before going to trialb. Court-Annexed Arbitrationi. A Fundamental Difference: Mandatory, court-annexed arbitration is usually not binding. Due process requires that any party can reject an award and go to trialii. The Role of the Arbitrator: essentially the same in both private and public arbitrationiii. Which Rules Apply: most states impose the same rules of evidence as on a trialiv. Waiver: failure to appear or participate constitutes a waiver of the right to reject an awardc. Court-Related Mediation: judges often order mediation before a dispute may proceed to triald. Summary Jury Trials: a mock trial that occurs in a courtroom before a judge and jury rendering an advisory verdictIV. ADR Forums and Servicesa. NonProfit Organizations: the major source of private arbitration services is the American Arbitration Associationb. For-Profit