Whether you own a business or run a household, inevitably you will find yourself in a dispute. A contractor's work is incomplete or unsatisfactory, or the property owner refuses to pay for work performed. A financial advisor or broker fails to properly advise and invest in accordance with your needs or instructions. A nursing home resident and family have concerns about the quality of care being given, or a resident's family fails to honor their agreement to pay timely for the care and services that an aging parent is receiving.
How are - and should - these disputes be resolved? In our current system of civil justice, there are essentially three ways to accomplish this, all of which avoid a "duel at 20 paces," which did not work out very well for Alexander Hamilton in 1804.
This is what courts are for. A judge or a jury is responsible for adjudicating your case, after hearing the facts, and applying the law. In disputes involving modest amounts of money, a small claims option is typically available for a low filing fee, and you can even represent yourself.
In larger matters, the assistance of an attorney is both necessary and prudent. As litigating lawyers representing you, we undertake a dual responsibility. We act as your advocate, shaping, presenting and arguing your case both to the opposing counsel and to the court. But we also must be an objective evaluator of your position, and advise you of the risks and exposure you face. Based on our many years of experience, we have found that most cases are never just black and white, but rather some shade of gray, which calls for a reasonable compromise, once both sides have come to appreciate the strengths and weaknesses of their positions.
Who pays for the attorney you hire? In almost every case, you do. This is the so-called "American rule." One of two key exceptions might apply to your case. First, a state or federal statute might allow for a shift of the burden of attorney's fees to the losing party. Certain civil rights cases, or wage disputes under the Fair Labor Standards Act are key examples. Second, if you are involved in a contract dispute, the contract itself could provide for the prevailing party to recover attorneys’ fees, at least with respect to issues on which that party does succeed.
Lawsuits vary widely in length and expense, depending on the issues and amount of money involved. They provide for a thorough exploration and complete resolution of the dispute, with options for appeal if the outcome at the trial court level is perceived to be flawed.
Arbitration is an alternative dispute resolution method that allows the parties to choose a neutral person to resolve the dispute, with an outcome that is binding on the parties. The arbitrator, or panel of arbitrators, is selected by agreement of the parties, and can be chosen because of their expertise or familiarity with the particular industry or area of law involved. The arbitrators do not necessarily need to be lawyers. The arbitration hearing is typically held in a conference room setting, and may take place on a single day, continuous days, or on multiple days scheduled by mutual agreement of the arbitrator and the parties.
Parties to a contract may agree in the contract itself that any dispute arising out of the contract can be settled only by arbitration, rather than resorting to a lawsuit in court. The law provides mechanisms to enforce the arbitration agreement. A judge will refuse to hear a case that the parties have agreed to arbitrate, and will enforce an arbitration award once it is rendered by the arbitrators. Arbitration is a mechanism that can also be invoked by the parties voluntarily agreeing to the process after a dispute has arisen.
The advantage of arbitration is thought to be its greater speed as it eliminates things like the "discovery" process (the formal investigation that precedes any trial) which tend to consume time and resources. Arbitration is also touted as a preferred alternative to a lawsuit in jurisdictions or in particular kinds of cases where juries are thought to be unable to adequately comprehend the issues involved, or where the parties fear a "runaway jury." Arbitration also provides greater finality: an arbitration award cannot be appealed to a "higher court," and can be overturned only in extreme situations, such as fraud, or partiality of the arbitrator.
But arbitration is not a panacea. Although it is possible to arbitrate small disputes without hiring legal counsel, most significant cases will require the expertise and advocacy skills of a litigator. In addition, the arbitrator(s) must be compensated at their hourly or daily rates by the parties, typically on a 50/50 basis. This can involve significant out-of-pocket expense if the hearings are lengthy. Moreover, the finality aspect of an arbitration award is a two-edged sword: the case is over, but if you did not win, and still feel wronged, there is no appeal.
The third way that a dispute may be resolved is by mediation. A mediator is a neutral person skilled in helping parties see and face the strengths and weaknesses of their case, enabling the parties themselves to come to a compromise agreeable to both sides. Unlike arbitration, the mediator has no power to adjudicate the dispute. An agreed upon mediation outcome is then memorialized in a settlement agreement or other enforceable document, such as a judgment.
Mediation is a very flexible mechanism. The parties can select a mutually acceptable mediator, agree on the amount of time to be spent at the mediation sessions, and work with the mediator to determine what information may be voluntarily exchanged in advance to facilitate a productive session. As with arbitration, the mediator is compensated by the parties.
A number of federal district courts, including those in the Western District of New York, now require parties to participate in a mediation session early in a federal civil case, with a view toward speedy resolution of the dispute. As stated by one federal court:
“In all cases, mediation provides an opportunity to explore a range of potential solutions and to address interests that may be outside the scope of the stated controversy or which could not be addressed by judicial action. A hallmark of mediation is its capacity to expand traditional settlement discussions and broaden resolution options, often by exploring litigant needs and interest that may be formally independent of the legal issues in the controversy.” – Eastern District of New York, Local Civil Rule 83.8(a)
MCCM's litigators have many years of experience in all three forms of civil dispute resolution, and can represent you in any forum, or even serve as arbitrators or mediators of a dispute involving parties who are not their clients. If you have questions about any aspect of civil controversy resolution, please contact Kevin S. Cooman at 585.512.3502 or firstname.lastname@example.org, or Peter Weishaar at 585.512.3542 or email@example.com.
This publication is intended as an information source for clients, prospective clients, and colleagues and constitutes attorney advertising. The content should not be considered legal advice and readers should not act upon information in this publication without individualized professional counsel.