Editor: What are the factors that general counsel should look for in selecting an ADR forum? Are some forums more favorably disposed than others in certain types of dispute?
Hamilton: Mediation and arbitration have multiple applications and are frequently used in concert to resolve disputes. We highly recommend mediation as a first step. Mediation can be used in employment, contract, vendor, supplier, construction and liability disputes to mitigate risk and control expenses. By using mediation as a first step in the resolution process, the parties are in control of the outcome. Mediation is especially appropriate for the resolution of disputes where the parties will continue to have a relationship after the dispute is resolved, such as with customers, employees, distributors, manufacturers, etc. Arbitration can be used if mediation fails. Arbitration brings finality to the dispute while reducing costs associated with litigation and maintaining privacy. Arbitration is especially appropriate to resolve disputes where there is "no middle ground" or compromise available. Another advantage of arbitration is that it allows the parties to select a hearing officer who is highly experienced in the area of dispute. Juries may not understand the complexities of a business dispute. Selecting a knowledgeable arbitrator instills confidence with the disputing parties that whatever the outcome, it was fairly and competently reached. Our clients generally write mediation/ arbitration clauses into their contracts with employees, customers and business partners. We recommend that these clauses mandate mediation first followed by arbitration if the mediation does not produce a resolution.
Published January 1, 2009.
