Dispute Resoloution and Its Growing Role in U.S. Business

Conflict is unavoidable. In the world in which we live, competition is a driving force that creates and destroys markets, allows businesses to flourish, and others to fall by the wayside, and grants consumers the ability to decide which entities in business will survive, and which will burn out, as their natural life cycle draws to a close. With competition being such a large part of what fuels the fire, progressing our modern business world; companies are bound to have disputes needing resolution. In the past, litigation was the only method in which companies were able to solve disputes. The process is a long and strenuous one to say the least, involving teams of lawyers, judges, panels of jurors, witnesses, and various relevant experts, all to come to a conclusion on a single dispute. This form of conflict resolution is one that pits the involved parties against each other as opponents, declaring a winner, and loser in each argument, often times, increasing the level of hostility between the involved parties. This is also an extremely demanding form of resolution from various standpoints, to various parties. Litigation imposes a significant financial burden, as well as an unreasonable time burden on not only the parties involved, but the government agency that is forced to hear these proceedings. Often times, a case can reach a verdict in which the debate is solved, yet the underlying issue causing the problem remains unaddressed, allowing for issues to continue to arise, and tie up further time and resources of the court, and the parties involved. Another problem faced by these types of hearings is the lack of consistency. A trial can be heard by two separate panels of jurors, and reach two opposite verdicts, all based on who the evidence was presented to. In a recent survey of judges in civil court proceedings, the judges were asked if they would have made the same ruling as the panel of jurors did. Despite the fact that the judges had heard the same testimony as the jurors, in fifty percent of the cases the judges said they would have made a different ruling (McCallum Jr.). All of these factors combined are indicative to the fact that it is time for a new form of dispute resolution. This change has brought about several new forms of ADR (Alternate Dispute Resolution) that people are becoming increasingly comfortable using, and more and more willing to agree upon. The benefits of mediation and arbitration are overwhelmingly evident and include cost savings, time savings, increased creativity in decisions, more agreeable outcomes, beneficial cooperation between parties, and an increased perception of justice.

One reason that ADR has become so important is the rapid increase in the amount of cases being filed to the government for resolution. In the past sixty years, the annual number of cases filed demanding a hearing have increased from about 35,000, to over 250,000, a seven fold increase, while the population has barely doubled. On the appellate level, the number of cases has expanded from 2,800, to 57,000 over the span of the past fifty years, an increase by a factor of twelve (Senger). The government simply does not have the time, nor does it have the resources to present all of these cases in front of a judge and jury. In order to ease the load felt by the court system, the government has began to implement ADR in order to eliminate much of the formality of a trial and pretrial litigation. The proof of the time savings is in the numbers. For example, in cases in civil court in which ADR is contrasted to standard litigation, the cases took an average of six less months to come to a resolution than in traditional hearings. It is also noted that the Justice Department estimated that using ADR saved an average of 89 work hours of attorney and staff time per case versus the normal 260 hours (Bentley). If ADR was to become more common place, the courts would have more room to resolve cases in which litigation has been deemed the appropriate solution, and the only way to resolve the dispute.

The amount of time saved by the parties involved has a direct correlation to the amount of money saved by the use of ADR. A case forced to adjudication can prove extremely costly for all parties involved, often times forced to pay for travel costs, transcripts, expert witness testimony, as well as attorney fees. These costs can stack up quickly, adding to thousands of dollars, in many cases to solve a dispute that has less than that at stake. Another cost is the opportunity cost forfeited by spending so much time in the court room. The longer a case stays in trial, the less a person is able to be working at their profession; ultimately exemplifying the old adage that time is money. The use of ADR often times prevents a case from needing formal adjudication, and an estimate by the Department of Justice indicates that cases solved prior to adjudication save an average of $10,700 in total cost (Bentley).

In