1. ALTERNATIVE AND ONLINE DISPUTE RESOLUTION COPYRIGHT © 2010 BY JEFFREY PITTMAN

2. ALTERNATIVE DISPUTE RESOLUTION PROCEDURES Alternative dispute resolution (ADR) is a catch-all label for procedures to settle controversies outside the courtroom JEFFREY PITTMAN - LEGAL ENVIRONMENT OF BUSINESS 2

3. ADR HISTORY ADR as a concept has existed for thousands of years. For example, consider the following Bible passage: 1 Corinthians 6: 1, 5, 7 - When one of you has a complaint against another, do you take your complaint to a court of sinners?... Aren't any of you wise enough to act as a judge between one follower and another? When one of you takes another to court, all of you lose. (CEV) Copyright © 1995 by American Bible Society JEFFREY PITTMAN - LEGAL ENVIRONMENT OF BUSINESS 3

4. ADR HISTORY George Washington used ADR procedures in his will Abraham Lincoln urged lawyers to promote ADR JEFFREY PITTMAN - LEGAL ENVIRONMENT OF BUSINESS 4

5. ADR TODAY ADR is a tool popular today with the judiciary, business managers and citizens ADR procedures include negotiation, mediation, arbitration and other procedures JEFFREY PITTMAN - LEGAL ENVIRONMENT OF BUSINESS 5

6. SECTION 1 THE SEARCH FOR ALTERNATIVES TO LITIGATION

7. ALTERNATIVE DISPUTE RESOLUTION PROCEDURES Why would you consider using an ADR procedure? JEFFREY PITTMAN - LEGAL ENVIRONMENT OF BUSINESS 7

8. ADR CONSIDERATIONS Compare litigation to ADR on the following: Cost? Time? Privacy? Bitterness? JEFFREY PITTMAN - LEGAL ENVIRONMENT OF BUSINESS 8

9. SECTION 2 – NEGOTIATION AND MEDIATION

10. NEGOTIATION Negotiation is a process where the parties to a dispute meet to discuss their differences As neither party can force a settlement under negotiation, the process involves joint problem solving and cooperative behavior JEFFREY PITTMAN - LEGAL ENVIRONMENT OF BUSINESS 10

11. ASSISTED NEGOTIATION Assisted negotiation and mediation involve third parties in the dispute resolution process A mediator’s role is to direct the parties discussions, limiting passions and negative rhetoric Advantages and disadvantages? JEFFREY PITTMAN - LEGAL ENVIRONMENT OF BUSINESS 11

12. SECTION 3 - ARBITRATION

13. ARBITRATION Arbitration is the most powerful and popular ADR procedure Arbitration (as well as all ADR techniques) is controlled by the parties and it may take a variety of forms JEFFREY PITTMAN - LEGAL ENVIRONMENT OF BUSINESS 13

14. ARBITRATION Usually arbitration agreements by parties involve submission of their dispute to a neutral third party with the power to resolve their dispute The main federal statute is the Federal Arbitration Act; most states also have adopted the Uniform Arbitration Act See textbook exhibit 3-1 for a summary view JEFFREY PITTMAN - LEGAL ENVIRONMENT OF BUSINESS 14

15. ENFORCEABILITY OF ARBITRATION How did the court rule in the following cases?  Case 3.1 - Buckeye Check Cashing v. Cardegna  Case 3.2 – NCR Corp. v. Korala JEFFREY PITTMAN - LEGAL ENVIRONMENT OF BUSINESS 15

16. THE ARBITRATION PROCESS Most parties do not create their own arbitration process Parties usually choose an arbitration provider such as the American Arbitration Association JEFFREY PITTMAN - LEGAL ENVIRONMENT OF BUSINESS 16

17. AGREEMENTS TO ARBITRATE Agreements to arbitrate are increasing in number and generally enforceable Note the ethical issues presented in this regard in “Insight into Ethics,” pages 70-71 Arbitration in employment is presented in Morrison v. Circuit City Stores  How did the court rule in this case? JEFFREY PITTMAN - LEGAL ENVIRONMENT OF BUSINESS 17

18. ARBITRATION APPEAL Arbitration decisions are usually final, not subject to court review The limited grounds for review are found in the textbook, page 75 JEFFREY PITTMAN - LEGAL ENVIRONMENT OF BUSINESS 18

19. DISADVANTAGES OF ARBITRATION The following points are possible disadvantages of arbitration versus litigation Lack of appeal rights (but appeals are expensive and time consuming) Lack of full discovery (but discovery is expensive and time consuming) Lack of evidentiary standards “Hidden” arbitration clauses (but truly hidden arbitration agreements may be unenforceable) JEFFREY PITTMAN - LEGAL ENVIRONMENT OF BUSINESS 19

20. DISADVANTAGES OF ARBITRATION Lack of knowledge regarding the arbitrator’s background (but the parties select the arbitrator; judges are appointed and may also be a mystery) Lack of precedent JEFFREY PITTMAN - LEGAL ENVIRONMENT OF BUSINESS 20

21. SECTION 6 – ONLINE DISPUTE RESOLUTION

22. SECTION 7 – INTERNATIONAL DISPUTE RESOLUTION

23. INTERNATIONAL CONSIDERATIONS The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards is commonly called the New York Convention This agreement, along with other international agreements, renders arbitration a powerful dispute resolution tool JEFFREY PITTMAN - LEGAL ENVIRONMENT OF BUSINESS 23