3 Best Practices to Keep Legal Disputes Out of Court

  • Post category:Feature
  • Reading time:9 min(s) read

No one wants to deal with the stress of resolving legal disputes. The process can be demanding, hence exhausting. However, disagreements between two parties inevitably happen from time to time. In fact, it occurs more often than we know, making it more important for us to understand the different methods of settling a legal dispute.

A legal dispute can be any legal action, suit, or proceeding between or among the parties arising out of or relating to any disagreement, conflict, controversy, or claim originating out of or relating to a specific contract or agreement. Legal disputes are court cases initiated by one party against another when they are unable to resolve their disagreements amicably.

For instance, when two parties have a verbal or written contract in which one party is to provide products or services to the other, a legal conflict can occur when one party believes the other has failed to deliver on their promises.

Another type of legal dispute arises when one party believes that it is being taken advantage of, or even defrauded of money by the other party. The numerous lawsuits filed by music recording artists against record labels are an example of this type of legal dispute. A musical group, for instance, might not want a record label to extract individual songs from its albums and sell them digitally. 

Almost any issue can be the subject of a legal dispute. Some public officials find themselves embroiled in court battles over what appears to be the illegal use of public funds. Slander, employment legislation, or any other disagreement between two people can become the subject of a legal dispute. As such, it is significant to learn how to manage dispute resolution.

There are a variety of options for resolving legal disputes. The most common one is going to court. However, there are methods other than the traditional court trial known as “Alternative Dispute Resolution” (ADR). ADR refers to the different ways people can resolve disputes without a trial. ADR procedures are generally confidential, less formal, and less stressful than traditional court proceedings. This article will discuss three common ADR practices you and your attorney can pursue in the face of a legal dispute.

Negotiation

Negotiation is a systematic procedure based on bipartite dialogue between conflicting parties. Its goal is for both parties to reach an agreement that is mutually beneficial for them. Sometimes negotiation can be relatively informal as it can happen in everyday situations. For example, a vendor negotiating with a customer over the price and terms of a sale. It can also be a formal method to resolve interpersonal, intergroup, and interstate conflicts. For instance, we often see a conflict between the marketing and production units within a corporation as each vies for more resources to accomplish subgoals. People negotiate to resolve these kinds of problems.

The negotiation process involves three main steps:

  • Identification of the problem. The parties must identify the problems. The nature of these concerns may have an impact on the entire negotiation process, including the selection of representatives and the period of negotiation.
  • Preparation for negotiation. Both parties must prepare for the matters that they will discuss. They should select representatives who will carry out the negotiation.
  • Negotiation. The parties will appoint a chief negotiator who will be in charge of presenting the issue under consideration. Thereafter, the representatives of both sides can express their initial demands as well as their points of view. During the course of the procedure, the representatives must focus on understanding the purposes of the other side, so that they can present their counterarguments. This will go on until both parties reach a final agreement.

Negotiation has three possible outcomes:

  • Win-Win Outcome – Both parties win.
  • Win-Lose Outcome – One party wins while the other loses.
  • Inefficient But Equitable Outcome – All the items are shared equally between parties.

Mediation

Mediation is a non-binding method of resolving legal disputes. In this method, the disputing party hires the help of an independent and unbiased third party to aid them and the other party in reaching a mutually acceptable settlement.

People used mediation to resolve many types of disputes such as custody and visitation, probate, personal injury, and malpractice. Mediation can be useful when a dispute involves many questions wherein a mediator can help by clarifying productive steps for solving the problem.

A third party that will serve as the mediator will facilitate the resolution process to assist the parties in reaching a negotiated settlement. The mediator is usually a lawyer, a retired judge, a subject matter expert, or a skilled professional who has received training in various mediation techniques.

A mediator’s job is similar to the parties’ consultants. This means that a mediator does not make decisions for them; rather, he assists the parties in reaching a settlement by listening to the issues, suggesting solutions, and communicating with and persuading them.

Parties seek mediation in a legal dispute when they:

  • are looking for a negotiated outcome;
  • want to maintain confidentiality;
  • want to control the outcome;
  • want a quick settlement; or
  • want to maintain and strengthen their relations in the future.

The mediation process involves seven important steps:

  • Mediator’s opening statement. At this stage, the mediator establishes his neutrality and informs both parties about the mediation procedure. The parties are notified that all statements coming from them during the process will be kept confidential and would not be revealed even if they go to court to settle their dispute. The mediator must earn the parties’ trust and confidence by providing an environment conducive to negotiation.
  • Opening statement of the parties. The parties will present the matter from their point of view and interests.
  • Setting of agenda. The setting of the agenda takes place, wherein the mediator determines the order in which the negotiation will go so that the parties can assess their own progress.
  • Exploration of issues. The mediator assists the parties in focusing on the problems at hand and in further investigating them.
  • Private session. At this stage, each party has the opportunity to present their case in front of the mediator one by one, separately. The mediator is not allowed to disclose the information given during this session to the other party.
  • Joint session. Following the private session, the mediator will hold a joint session to help the parties reach an agreement by offering an alternative solution. If the parties are unable to reach an agreement, the mediator may once again organize a private session until both parties reach a settlement.
  • Closure. Once the parties have agreed to each other’s terms, the parties have achieved a voluntary agreement to end the dispute. The settlement agreement between the parties will be put into writing, for their compliance.

In certain cases, your lawyer may represent you during the mediation, and in most situations, your lawyer should review the mediated agreement to ensure that your legal rights are protected and to assist you in putting the agreement in writing.

Arbitration

Arbitration is a means of resolving a dispute without having to file a lawsuit. It’s usually done in a meeting room, and both parties have the right to legal representation throughout the whole process. Witnesses and testimonies from both parties will be heard, and they will be given the opportunity to examine any evidence which will be presented by the other party. This procedure is less formal and, in most cases, less costly than a court trial.

In arbitration, a third party, known as the arbitrator, acts as a private court and decides on the parties’ conflict. An arbitrator could be an attorney, an expert in a particular field, or even a retired judge. The parties are responsible for paying for the arbitrator’s services.

Often, the parties choose arbitration over court simply because it is faster, easier, and less expensive. In some situations, when both parties sign a contract with an “arbitration clause,” they are required to employ arbitration in the event that any contract-related dispute arises. In other words, a party’s right to refer a dispute to arbitration is contingent on the presence of an agreement, known as the Arbitration Agreement, between them and other parties.

Commercial contracts usually include provisions stating how the parties will resolve the contract disputes. If the parties agree to arbitrate, the arbitration agreement between them will usually be included in the document that records the business transaction’s conditions. However, the parties can also enter into an arbitration agreement after a dispute has arisen.

See other legal documents that you may use to protect your rights.

The American Arbitration Association describes arbitration as having seven main steps:

  • Filing and initiation. One party files a Demand for Arbitration which starts the process.
  • Arbitrator selection. Both parties work to select an arbitrator — one they can both agree on to meet their needs based on the nature of their dispute.
  • Preliminary hearing. Parties meet to discuss substantive case issues, information exchange, witness lists, and other relevant matters relating to the dispute.
  • Information exchange and preparation. Parties share information and the arbitrator handles any related challenges.
  • Hearings. Parties present evidence and testimonies before the arbitrator.
  • Post-hearing submissions. If applicable, parties submit additional information to the arbitrator.
  • Award. The arbitrator renders a decision (known as an award) and closes the case.

The grounds for challenging or appealing an award differ depending on certain factors such as the arbitration agreement’s contents, the arbitral’s seat, and the institutional regulations. Although rare, the parties can challenge a tribunal’s findings of fact. If the tribunal has not conducted itself properly, has answered questions it should not have answered, or, in some cases, made an error of law, a party can go to court to ask for the award to be set aside or sent back to the tribunal to make its decision properly.

Conclusion

The best way to settle a legal dispute is through amicable settlements. If you can find ways to resolve your conflicts through negotiation, it is best you do so. However, there are extreme cases that require the involvement of a third party, such as a mediator or an arbitrator. If this is the case, you should consult a legal expert for advice to let you know the necessary steps you need to take to defend your rights.