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CHAPTER 3- DISPUTE RESOLUTION DISPUTE PREVENTION AND ALTERNATIVE DISPUTE RESOLUTION: Dispute Prevention - important work of attorneys is DISPUTE PREVENTION! “You have a chance to go broke twice in your life: Once when you lose a lawsuit, the other time when you win.” There are thousands of lawyers working every day to keep their clients out of court by telling their clients what they need to do to avoid BEING SUED. To me, this is the most productive and exhilarating way to practice law. Not hashing things out in court. - Employee handbooks are a way for employers to avoid being sued. Why? - Warning labels on products are a way for manufacturers to avoid being sued. Why? - Rules at fitness clubs are a way for the fitness club to avoid being sued. Why? - Rules, regulations and warnings at amusement parks are a way to avoid being sued. Why? - Counseling employers, teaching corporate CEOs and executives, educating doctors and accountants and engineers and cashiers on the law as it pertains to them is all in an effort to AVOID DISPUTES. - Contracts, which we talk about in Chapters 10-22, are written in an effort to avoid lawsuits. Okay, so we know we should avoid disputes, but sometimes it is just impossible to do. So when a dispute occurs, there are a two avenues to take 1) Alternative Dispute Resolution and 2) Lawsuits ADR- There are three ways of resolving disputes without going to court (or in some cases, before going to trial): 1) Negotiation- trying to settle the dispute by making offers, concessions and counter-offers 1
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Example: Jane is in a car accident with Joe. Jane is injured and Joe is at fault. Jane hires a lawyer who negotiates a settlement with Joe’s insurance company. Jane never has to file a lawsuit. 2) Mediation- negotiating with a mediator; a neutral 3 rd party there to facilitate negotiations and help the parties settle Example: Delco, Inc. has a contract with Home Garden, Co. for landscaping services. Once day, Home Gardens comes to service the lawn, and accidentally damages a 100 year oak tree on Delco’s property. Delco is unhappy but wants to keep its relationship with Home Garden. They decide to sit down with a mediator that they both agree on to try to settle the dispute. The mediator gives both parties a chance to air their grievances, talk about the situation and helps them come up with a mutually agreeable solution. Delco never files a lawsuit and they continue in business with Home Garden. 3) Arbitration- a pseudo-trial with an arbitrator- a judge-like figure who hears the arguments from each side and makes a decision for one party over the other. Example: Harry works for Jane Magazine as a design editor. He has a two year employment contract. In the contract there is a binding arbitration clause, meaning that the parties agree to resolve any dispute arising out of the contract with arbitration, not in COURT. Harry wants to sue Jane Magazine demoting him based on the language in the contract that he cannot be demoted without just cause. Harry cannot file a lawsuit.
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