Thursday, April 8, 2010

Alternative Dispute Resolution

I liked chapter 13 of our book, mainly because conflict is a big part of everyone's life. There is conflict between people, companies, and even countries. The key to unraveling all this conflict? Alternative dispute resolution, of course!

(Image courtesy of

No, not war. That's more like 'last resort resolution.' Alternative dispute resolution involves mediation and arbitration. I took a summer class at Dominican in which the subject matter completely revolved around ADR (alternative dispute resolution), and so I want to go into some depth about mediation and arbitration.

Litigation (taking something to court) is really expensive for both sides. Many companies would rather avoid litigation altogether, which is why your health insurance company has an arbitration clause in the contract agreement that you signed in order to receive coverage that bars you from suing them should a doctor leave a scalpel lodged in your head.

First off, mediation can be a godsend, provided you're dealing with another party that's honest and won't screw you over, because they totally can. Mediation involves sitting the two involved parties down to negotiate, sometimes one at a time alternating with group negotiation. In the end, the parties often wind up meeting somewhere in the middle, shaking hands, and everything is all good, right?

Wrong. Mediation is not legally binding. So, you can go to mediation with someone and come to an agreement, but they are in no way bound to follow through on that agreement, because mediation is NOT a legal contract. If the other party is honest and follows through on their word, then GREAT! You've solved the problem! Mediation is great because it allows the two parties to come together and hash out their differences in an environment that lets them make offers and see the other side. It tends to be nonconfrontational, which is a plus when dealing with a someone who's pissed off and just needs to sit down and calmly talk through what they want (or what you want) and come to an agreement.

Arbitration, on the other hand, CAN be legally binding, and is almost like a mock court, only slightly more impartial. The two parties come together with a third person called the arbitrator (not to be confused with the ARBITER from Halo), and they sit down and plead their case with all available information. The arbitrator hears both sides, and then renders a legally binding judgment in favor of one of the parties, effectively ending the dispute.

In the class at Dominican University, we role-played both systems of negotiation. We found that arbitration can have a better outcome for the party that wins the judgment, but the relationship between the parties afterward is often strained or even cut off entirely. Mediation, on the other hand, is a give-and-take endeavor where both parties make some concessions, usually to keep whatever relationship (professional or otherwise) largely intact. Mediation is less confrontational and more open, while arbitration is simply a right/wrong scenario.

Back to my statement about your healthcare provider. Think about this: you cannot sue Kaiser Permanente if you are a member. You HAVE to go to arbitration. The company does this to avoid costly malpractice suits that can severely damage their reputation and balance sheet. Some companies require their employees to sign such arbitration (or mediation) contracts as well as a condition of employment, due to the costs of litigation and the relative fairness of arbitration.

There are more ways than just suing someone to get a settlement. These ways are designed to keep the court out of it and the decision largely private. With sensitive matters, it pays to go with alternative dispute resolution.


  1. I liked how you brought in information you learned outside the class. It makes it a lot more interesting to read. I never thought about how two groups can go to a non-biased place and have a non-biased mediator help them work through conflict, but that such conclusions aren't neccessarily legal and going to occur. It brings me back to the palestinian/israeli conflict in which the US often is the mediator and tries to get each side to learn to live with eachother. Sometimes, during such meetings, things are worked out and leaders say 'yeah we'll stop building on that land' or something to that effect, but since the US can't really enforce such agreements, just help the sides to say they agree, there is still conflict taking place.

  2. It's interesting to note the specific cases you showcased. For example, the details regarding Kaiser are really interesting for most students and DU to know, considering a good amount of us are insured by Kaiser. It's a really sneaky way to conduct business, and in fact I bet majority of there clients (including myself) are unaware of the ways big businesses protect there name and shove liability elsewhere.