Alternative Dispute Resolution
Mediation—The Trend towards Resolution of Expensive Litigation
Filing a lawsuit is one route to take when seeking to reach a legal result. However, clients and attorneys should recognize that there are other means of achieving results without litigating.
Alternative dispute resolution (ADR) is just what the name says, an alternative to litigation. The parties place in writing an agreement establishing that a neutral person, often an attorney, shall act as a mediator in an effort to attempt to resolve a dispute without the need to go through the many steps of filing a lawsuit and being heard in court. Mediation may resolve many of the issues and provide the parties with an opportunity to have a limited number of issues heard before a judge or jury. This could result in a time saving for the court and a cost saving to the client. Alternative dispute resolution often leads to a result that may be better than an extreme loss or win in a court of law. Often ADR can achieve results that a judge or jury cannot award. Here are some examples. Let’s assume the dispute is over a monetary amount and the party who would have to pay the other party does not have sufficient funds to pay the full amount. Through mediation, both parties could come to an agreement that the paying party has 18 months to pay the funds without interest at 10%, which is the rate the court would award in its decision. Let’s assume liability is an issue in an automobile accident case and in Maryland, Maryland law does not follow the comparative negligence statutes that the majority of states follow. In Maryland, if a party is 1% at fault, he will lose his or her case. The person who brings the suit may not want to have the case tried because it may result in a total loss if the court determines he is 1% at fault. Also, the defendant wants resolution and does not want to take the chance of losing and either having to pay or have his insurance company to pay a large sum of money. Let’s say the defendant is 10% at fault, the damages are $15,000, and the parties are willing to settle at $13,500. Each party, having agreed to the settlement of $13,500, has certainty of the outcome. Each party does not want someone else to decide for them.
The process is relatively efficient and often more cost effective than litigation.
Often the mediators are neutral persons as well as lawyers or retired judges. Mediators have significant experience in the area of the law involved be it auto tort, contracts, real estate, family law, and other areas. The mediators are knowledgeable both of the law and as to the kind of result may occur in court. They utilize their expertise to assist parties in arriving at a reasonable resolution. Often, even when parties have lawyers, settlement discussions do not occur. At the district court in each county, the courts have mediators available to attempt to resolve cases on the day of trial. There is no cost to the parties and participation is voluntary. Some counties have mediation services in the circuit courts as well.
In addition to ADR there are other types of approaches such as binding arbitration, where the parties agree to a minimum and maximum result without the mediator knowing the maximum and the minimum. Example – let’s assume the parties agree that the minimum is $20,000 and the maximum is $60,000. If the arbitrator decides that $15,000 is the binding amount, because there is a minimum of $20, 000 already set, the outcome in fact will be $20,000. Likewise if the arbitrator decides on $80, 000, the maximum of $60,000 will be amount that is actually paid.
In family law cases and workers’ compensation cases, judges, as part of their decision making discretion, often order mediation and the parties must attend two- two hour sessions of mediation.
For the past five years I have provided mediation services in alternative dispute resolution as a volunteer at the Howard County District Court and occasionally at the Circuit Court for Howard County. The first year that I acted as a volunteer, I received an award for outstanding ADR volunteer. Approximately 10% of the volunteers received awards and the awards were based on effectiveness, number of cases resolved, attendance, and survey rankings from the parties.
At the Law Offices of Fredric G. Antenberg, we inform clients of alternative dispute resolution, particularly where it is appropriate, and we encourage clients to pursue alternative dispute resolution. Call Fred for a free consultation at 410 730 4404.