5-1 Chapter 5— Negotiation and Alternative Dispute Resolution Systems REED SHEDD PAGNATTARO MOREHEAD F I F T E E N T H E D I T I O N McGraw-Hill/Irwin.
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Personal reasonsPersonal reasons• Compromise is instinctiveCompromise is instinctive• Dislike of troubleDislike of trouble• Opinion of othersOpinion of others
Business reasonsBusiness reasons• Bad for businessBad for business• Sympathetic juriesSympathetic juries
Personal reasonsPersonal reasons• Compromise is instinctiveCompromise is instinctive• Dislike of troubleDislike of trouble• Opinion of othersOpinion of others
Business reasonsBusiness reasons• Bad for businessBad for business• Sympathetic juriesSympathetic juries
Reasons for Settlement without Litigation
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$4.85Billion $1.6
Billion
Merck Citicorp
Major Settlements
$1.2Billion
Eli Lilly
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Third party (arbitrator) makes final decision
Mandatory v. Voluntary Final decision (award)- binding Reasons
Arbitration- Submissions Parties agree to arbitration -
written Specific matters agreed to
arbitrate Matters for arbitration
Questions of fact Questions of law Fact & law
Trend toward arbitration
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Chosen By Disputing Parties
Beyond Legal
Number = 1- 3
Authority- Authority- Granted By Granted By AgreementAgreement
Expert
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think
TANKthink
TANKthink
TANKAll of the following are advantages of All of the following are advantages of arbitration over litigation except:arbitration over litigation except:a.a. Right to appealRight to appealb.b. Takes less timeTakes less timec.c. NonpublicNonpublicd.d. Not as expensiveNot as expensive
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Arbitration - AwardsDisclosure of findings & reasons
• Not needed unless required by statute or agreement
•Parties bound by award
Court favors award & broad scope of authority
Final on submitted Issues – filed with court clerk & enforced by court
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“Role”•Enacted 1925 & 1947
•Covers any Arbitration clause involving Interstate
Commerce.
“Role”•Enacted 1925 & 1947
•Covers any Arbitration clause involving Interstate
Commerce.“Impact”
•Court assumes intention•May set aside state
laws under commerce andsupremacy clauses
“Impact”•Court assumes intention
•May set aside statelaws under commerce and
supremacy clauses
Federal Arbitration Act
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States adoptingStates adoptingSpeeds up processSpeeds up processMany qualified Many qualified
arbitratorsarbitratorsTypes of casesTypes of cases
• <$15,000<$15,000• Specific subject matterSpecific subject matter
Record of proceedings Record of proceedings requiredrequired
States adoptingStates adoptingSpeeds up processSpeeds up processMany qualified Many qualified
arbitratorsarbitratorsTypes of casesTypes of cases
• <$15,000<$15,000• Specific subject matterSpecific subject matter
Record of proceedings Record of proceedings requiredrequired
Mandated Arbitration
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Mandatory Arbitration- Procedures
Submit ClaimSubmit Claim
Arbitrator Determines:Arbitrator Determines:Admissibility Of EvidenceAdmissibility Of Evidence
Law/Facts Of CaseLaw/Facts Of CaseObjectionsObjections
HearingHearing
DiscoveryDiscovery
8 Months8 Months
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Parties AgreeTo Method By:
1) “Pre- DisputeArbitration
Clause” and
2) “Post-Dispute ArbitrationClause”
Voluntary/Contract-Based Arbitration
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Judicial Review of Arbitration
Voluntary/Contract-Based Award is final Findings of fact/law- conclusive Limited review by court Correct fraudulent/arbitrary actions/against public
policy Statutorily-Mandated
In accord with procedural/due process of law Constitutional challenges De Novo Review
Minitrial – Confidential Focus on central issues Back to business problem
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pop
QUIZpop
QUIZpop
QUIZIf the parties to a mediation sign an If the parties to a mediation sign an agreement at the end, that agreement is agreement at the end, that agreement is usually legally binding (can be enforced usually legally binding (can be enforced in court.)in court.)