Keeping it out of court
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Before you spend your time, energy and money on a tedious, drawn-out court battle, weigh the option of alternative dispute resolution. gregory L. Greenwood, owner of a car dealership in Youngstown, Ohio, claimed that Chevrolet owed him more than $100,000 worth of bonuses through its dealer incentive program. But Chevrolet refused to pay the incentive to Greenwood Chevrolet due to an intricacy in their agreement. After six months of exchanging nasty letters, parent company General Motors gave Greenwood the option of arbitrating the dispute. That meant he could have an impartial panel of three people hear and decide his case outside of court. They jointly chose the panel, which included a Chevrolet dealer, a Chevrolet factory representative and a professional arbitrator from Endispute Inc., a Washington, D.C., company that offers such services. Greenwood and Chevrolet chose a day for the hearing and met on neutral ground. Within nine hours, the panel had reached a decision, awarding Greenwood about one-third of the money. Although he was not totally satisfied with the size of the award, Greenwood still believes he’s “several hundred percent ahead” I because arbitration cost less than one-tenth of what he would have spent on full-fledged litigation. What’s more, Greenwood and General Motors were able to resolve the dispute in confidence, preserving their working relationship, rather than sacrifice it to the adversarial forces of a protracted and public legal battle. “I’m not just here for the next two weeks. I’m here for a long time,” says Greenwood, a second-generation automobile dealer. “It felt good to resolve [the case] in a noncombative way.” A Growing Trend Increasingly, companies like General Motors and Greenwood Chevrolet are handling the usual business disputes–with suppliers, customers and employees–through arbitration and other types of alternative dispute resolution (ADR). These companies agree, either before or after a lawsuit has been filed, to attempt an out-of-court resolution with the help of a neutral third party such as a lawyer, retired judge or company that offers ADR services. In 1991, ADR case filings with the American Arbitration Association in New York exceeded 62,000 nationwide, a 34 percent increase from five years ago. The value of claims and counterclaims in these cases amounted to $4.6 billion. The various forms of ADR, including arbitration, mediation and mini trials, have grown in use primarily because they are faster and cheaper than litigation. In recent years, court backlogs in both civil and criminal cases have pushed trial dates on to long waiting lists. And the civil cases, in particular, have taken a backseat to more pressing criminal matters. Rather than devote years to maneuvering a case through court, companies have found they can resolve their differences in a matter of months with ADR. And in the process, their disputes remain confidential because ADR proceedings generally are not a matter of public record. Indeed, many courts themselves are behind the move to ADR. Nearly 40 percent of federal trial courts and half of federal appeals courts now encourage or require parties to attempt ADR before litigating a case, according to the Center for Public Resources, a New York-based nonprofit group that promotes ADR. At the state level, court initiatives include “settlement weeks” in New Mexico, Texas Source : accessmylibrary.com |