Increasingly, as the Georgia Courts have become slower and slower due to increased case loads, parties have sought other avenues to resolve their disputes. Without added funding in the future for additional judges and courthouses, these alternative dispute resolution avenues will likely grow to fill this void. The main advantages of alternative dispute resolution are the speed and flexibility it offers both clients and attorneys. The two largest forms of alternative dispute resolution are arbitration and mediation.
Arbitration is a popular method of resolving disputes on commercial projects. Often, commercial contracts require that disputes between owners and general contractors be resolved using arbitration. It is important to note that the form contracts prepared by the American Institute of Architects and the Associated General Contractors require all disputes to be resolved by arbitration.
Arbitration typically involves an administrator and an arbitrator. The administrator handles all preliminary matters such as processing paperwork and scheduling. The administrator sometimes assist in obtaining an arbitration panel to hear cases. A typical arbitration panel consists of three accredited arbitrators with each party choosing a single arbitrator and these two arbitrators choosing a third arbitrator.
In an arbitration case, the parties also choose the date and time for completing discovery and trial of the case. By being able to control the speed of the case, little or no time is spent waiting for motion and trial calendars. Arbitration affords the parties’ control over the pace of the case thereby controlling the costs involved. By resolving a case quicker, the parties generally will spend less on attorney’s fees and other expenses. In addition to the speed and cost effectiveness, arbitration can be beneficial in that the arbitrators chosen are usually experienced in construction matters. The construction background and experience of the arbitrator can significantly shorten any hearing or trial because he/she understands the industry and does not have to be educated on construction issues and concepts before reaching a decision. When ongoing or future relationships are at stake, the less adversarial atmosphere of an arbitration hearing can significantly enhance the possibility of future relationships between the parties.
Arbitration hearings (trials) are typically less formal than a courtroom trial. An arbitration hearing is usually held in a conference room at a time convenient to both parties. The rules of evidence, while existing, are less stringently applied. Another potential benefit of arbitration is that it is private. There are situations and disputes where the parties may feel it is best that the case not be handled in public with the potential negative coverage or scrutiny which can accompany certain types of cases. It is also important to note that most arbitration hearings are binding on the parties. While some arbitration hearings have a method for appeal, most do not and the decision of the panel is final.
Thus, the major benefits of arbitration is the cost effectiveness, experience of the arbitrators and the flexibility and speed of the preparation and trial of the case.
Mediation, on the other hand, is a private non-binding method of dispute resolution. Through mediation, the parties hire a single person (mediator) who discusses the case with the parties and then attempts to assist them in reaching a mutually agreeable settlement. Mediation is truly a settlement negotiation whereby the mediator attempts to show each side the respective strengths and weaknesses of their position in the hope that this will assist them in settling their case.
Parties typically love or hate mediation. Mediation, because it is non-binding, is sometimes thought of as a waste of time since there is not certainty even after the hearing is concluded. On the other hand, if the case is settled, the parties seem to think it is great.
The benefits of mediation include cost effectiveness, speed and informal nature. Like arbitration, mediation is typically far less costly than a normal trial. However, mediation is usually less costly than arbitration since there is only one person (the mediator) to be paid as opposed to three arbitrators. In addition, mediators will usually meet with parties at any mutually convenient location while arbitrators provide less flexibility as to location. Like arbitration, mediation is a far faster method of resolving disputes than a normal trial. However, scheduling a hearing for mediation, because it is non-binding, can be even faster than arbitration, but because it is non-binding could be unproductive. A typical mediation session excludes the parties’ attorneys which can lower costs and assist or hinder settlement depending on the parties and their willingness to compromise with the mediator and the other party.
While alternative dispute resolution is not always a viable possibility, it is important to be aware of the alternatives to the traditional court room resolution of legal matters. As outlined above, alternative dispute resolution can save time and money, but there are varying degrees of success depending largely on the type of case and the parties involved. If all parties agree to a form of alternative dispute resolution and it is possible to obtain a very competent mediator or arbitration panel then alternative dispute resolution may be worth considering to handle the dispute.
Mr. Busch is an attorney specializing in commercial and construction litigation for Busch, Reed, Jones & Leeper, P.C. in Marietta, Georgia