In prior posts here at FITCH, we have discussed some of the reasons that parties choose international arbitration over litigation for their cross-border disputes. Over the next few months, we will be taking a deeper dive into the advantages of international arbitration. One such advantage is confidentiality.
I recently participated in a panel discussion for a mediation course at a local law school. A well-known full time mediator and a U.S. federal magistrate judge who regularly conducts mediations in the federal court were with me. A highly engaged class of law students asked us to address a range of practical questions on the mediation process.
Supreme Judicial Court Rule 1:18 encompasses the Uniform Rules on Dispute Resolution ("Rules"). The Rules govern court-connected dispute resolution services provided in civil and criminal cases in the Commonwealth's trial courts. One of the express purposes of the Rules is to "foster innovation" in the delivery of court-connected dispute resolution services. Conciliation is an alternative dispute resolution process offered in many of the Commonwealth's Probate & Family Courts, and in some District and Superior Courts.
I recently returned from the American Academy of Matrimonial Lawyers Arbitration Training Institute as a Certified Family Law Arbitrator. A few words about family law arbitration: Arbitration falls within the category of alternative dispute resolution ("ADR"). It can be a very helpful tool to resolve family conflict. Contested litigation is the traditional method to resolve legal disputes arising from family law matters, but contested litigation can be a time consuming and expensive process. As a result of the frustration and expense that many have experienced from being engaged in contested family law litigation, there has been a push in recent years to resolve family law matters through various ADR procedures, such as mediation, conciliation, and arbitration.
One of the many advantages of arbitration over litigation is that the parties to a dispute have the opportunity to choose the arbitrator or arbitrators who will decide their claims. The selection of an arbitrator is a critical decision point that necessarily occurs very early in the arbitral process. The stakes are high since an arbitrator's award is very difficult -- some say nearly impossible -- to have vacated. Choosing an arbitrator who is well suited to your case requires careful consideration of many factors, several of which are set out below.
Aside from the flexibility to tailor the process to the particular needs of the case, arbitration also enjoys another major advantage over litigation: The ability to keep the proceedings confidential. Although a party involved in litigation can move to seal the court proceedings, public access to court records is a central tenet of the American legal system that cannot easily be restricted.
The dispute resolution clause in commercial contracts is very often inserted at the last minute without much attention given to the implications of the particular language contained in the clause. It is increasingly common to see "stepped" dispute resolution clauses, whereby the parties agree to mediate disputes arising under the contract and, if mediation fails to resolve the dispute, to arbitrate. The popularity of stepped clauses is due in part to the fact that they make a quick, inexpensive resolution possible through mediation, but provide arbitration as a fallback mechanism for dispute resolution. While wholly reasonable on their face, stepped dispute resolution clauses can have surprising consequences when a business relationship sours.
Increasingly the question regarding mediation of a complex business litigation case is not whether but when. Among experienced litigation counsel, there is widespread agreement that mediation should be attempted in many if not most cases. The resources of time and money committed to mediation are usually modest compared to the requisites of full-blown litigation. It is a voluntary and confidential process. Though experiences may vary, I have found that mediation succeeds more times than not in obtaining mutually acceptable settlements. Even if a case does not immediately settle in mediation, both parties are apt to receive significant value in obtaining the assessment of a neutral third party and also in learning more about how the other party (or parties) calculates the risks and rewards of the case.