Alternative Dispute Resolution

As the complexity and cost of litigation has increased, coupled with congested court calendars, some parties are increasingly turning to “alternative dispute resolution (ADR)” as a way to manage disputes they cannot avoid. With ADR, the parties can avoid delay and expense of litigation. While over ninety percent of lawsuits filed eventually settle, too often they settle only on the eve of trial, after exhaustive work and accumulated costs. As a result, attorney’s fees and costs play a significant role in how you approach your case.

ADR proceedings are usually conducted in private to allow you to maintain the results confidential. This can be important in certain cases, such as high publicity divorce or trade secret cases. The parties make the key decisions, such as selecting the person who will facilitate the negotiations or conduct the hearing. They can control the timing and pace of litigation; set deadlines and determine where, when and in what sequence the ADR hearing will be held.

One of the most widely used forms of ADR is arbitration. In arbitration, disputes are submitted to a third party, called an arbitrator, who is not a judge in a court, to make a decision. In today’s society, an increasing number of contracts have mandatory arbitration clauses. For example, in most commercial lease agreements, all disputes must first be attempted to be resolved by arbitration. The arbitrator makes a final decision called an arbitration award.

There are two types of arbitrations, non-binding and binding.           In a non-binding arbitration, a party can file a lawsuit if he does not agree with the arbitration award within 30-days of receiving the results. In binding arbitration, the results are final and no further action can be taken. As I outlined in last weeks’ article, WHAT TO DO WHEN A PROBLEM ARISES WITH AN ATTORNEY, California law provides for arbitration in attorney-fee disputes as a cost-effective alternative to filing a lawsuit.
Another method is mediation, where a third-party works to help the parties reach a settlement of their dispute. Unlike an arbitrator who decides the results of your dispute, a mediator works with both parties to have them reach a settlement. Remember in mediation, settlement does not mean that one party wins. In actuality, a true settlement has both sides neither happy nor unsatisfied with the results. Mediation is frequently used in family law disputes, like child custody and domestic relations matters. In many counties, there are low-fee and/or free mediation services for the public through the State Bar of California or your local city bar association.
Increasingly, as a matter of local policy and in response to calendar congestion, courts are encouraging and even requiring that litigants participate in an appropriate court-administered ADR program. In most instances, the arbitrator and/or mediator voluntarily provides their services to the Court and no costs are incurred by the individual clients. Another form of ADR, used through court-administered proceedings, is mandatory settlement conferences (MSC). In an MSC, the parties rotate between different mediators and sometimes participating judges throughout the day to reach a possible settlement. MSC’s are usually conducted in the weeks prior to trial.
However, there are some drawbacks to ADR. Many procedural safeguards that are present in the courts, such as the right to a jury trial and the right to an appeal, are not present in some forms of ADR. Therefore, each case must be individually evaluated by you and your attorney, and you should clearly understand the advantages and disadvantages of the process before agreeing to participate in ADR.

This column is produced by Mary Der-Parseghian, Esq. For questions or comments, please send your message to 4727 Wilshire blvd., Suite 301, Los Angeles, CA 90010; E-mail: or call at 323-937-2727. For additional articles please visit our webpage at

© 2011. Der-Parseghian Law Group

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