Alternative Dispute Resolution
Bryan Forman’s practice encompasses popular alternatives to litigation that can save clients time and money. These alternative dispute resolution procedures, which include arbitration and mediation, are generally more informal and efficient than a lawsuit. Check out our arbitration discussion for a quick introduction to that process.
Arbitration’s Growing Popularity
An arbitration clause is a provision in a contract in which the parties agree to use arbitration rather than litigation to resolve disputes. These days, arbitration clauses are unavoidable in contracts from an increasing variety of industries, whether among businesses or between business and consumer. No longer just the province of financial services companies, here are a few examples of corporate sectors employing mandatory arbitration agreements:
- Air travel;
- Nursing homes;
- Cellular services;
- Real estate;
- Construction, and
- Consumer electronics.
Even gift cards and e-commerce sites incorporate arbitration agreements into their terms of service. Consequently, more and more disagreements between companies and their clients are being resolved independently, outside the court system.
What’s So Great About Arbitration?
Arbitration confers many advantages on the parties to a dispute. First and foremost, because arbitration is a less formal process than litigation, arbitrated disagreements tend to be resolved more quickly than litigated ones, and with less expense. Typically, arbitration avoids the extensive motion practice and discovery disputes that can bog down a lawsuit. Additionally, arbitrators are neutral third parties who often benefit from extensive experience in the relevant industry, unlike judges who may be learning complex details about a particular type of enterprise for the first time. Further, arbitration proceedings are confidential, unlike court cases, which are public. Finally, arbitration decisions can be appealed in only limited circumstances, which means that in most cases, arbitration concludes when the arbitrator makes a decision, not when a higher court finally rejects all challenges to the lower court’s ruling.
A Good Arbitration Agreement is Critical
At the Forman Law Firm, we know that there is more to arbitration practice than representing our clients when disputes arise. Arbitration and its advantages are only available when all parties execute an enforceable, written agreement to arbitrate. Which means that if you are going to include an arbitration clause in your terms of service or other written agreement, especially with consumers, that clause had better be good. Similarly, if you are accepting a new job and your employment agreement includes an arbitration clause, it's best to negotiate the terms of that clause up front, before you sign it.
Too often, an agreement to arbitrate is an afterthought composed of boilerplate language copied and pasted from other documents. But a carefully crafted agreement to arbitrate allows you to sculpt the situation to your advantage. For example, an agreement can designate where any arbitration will be held, as well as which ADR forum will administer the process. One of the most well-known ADR providers in the country is the American Arbitration Association, also known as the AAA. Consequently, if your arbitration clause has been drafted without much thought, it might specify the AAA as the forum for any disputes - even if the AAA is not the best forum for you. In fact, there are many other ADR providers out there to choose from, from national and international organizations to state and local ones. The Association for International Arbitration lists just a few here.
Designating a favorable forum is only one element of a well-drafted arbitration agreement. You can also establish the following:
- Whether all disputes must be arbitrated, or only certain ones;
- How the arbitrators will be chosen and from where;
- What law will apply;
- What procedural rules will apply;
- How discovery will be limited; and
- Whether the parties are required to negotiate or mediate before filing a claim.
Why You Should Not Use A Boilerplate Arbitration Provision
An overwhelming number of contracts simply adopt a AAA Arbitration Provision without thinking through how such arbitration provision can be tailored to your specific business and the specific type of claims that will inevitably be filed. Don't be guilty of this--- prepare and/or revise your arbitration provisions in your agreements now, before you receive the next demand for arbitration. Well-crafted agreements tailored to your business act as both a sword and a shield, enabling you to design the process fairly, and to your advantage.
Choose The Right Lawyer
Bryan Forman has been representing both individual and institutional clients in arbitration proceedings for decades. We know the ins and outs of a process whose informality can frustrate attorneys more used to the slower pace and rituals of the court system. Bryan’s extensive practice experience, coupled with his years in business as counsel, executive, and board member, make our firm the ideal one to represent you throughout the arbitration process, from preparing a contract to concluding a claim.
To learn more, call us at 903-597-2221, or contact us online.