January 30, 2008

Dan and George are partners in a computer and software consulting business. Dan notices sales are down and wants to retire. George wants to start his own company. The problem is that the partnership owns over $3,000,000 in computers and software which George would like to use for his business. They also own copyrights to the software and patents for them as well. They cannot agree on a buy out for Dan, nor can they agree on how to split the assets. Dan sues and after $40,000 in pleadings, depositions, motions and judicial conferences, there is no resolution…

Mary cares for her mother who is 85 years old. Mom has a home in Chester County, Pennsylvania, and a home on the Jersey shore. She also owns over $700,000 in investments. Joan lives in Western Pennsylvania, near Pittsburgh, and sees her mother once or twice per year. She calls mom two to three times per month. Mom dies and Joan finds that mom has left everything to Mary in her will. Joan sues in Orphan's Court claiming undue influence. After $25,000 in litigation expenses, the case is ready for trial and her lawyer says that the chances of her winning are a long shot…

What can you do? Isn't there a better way? Yes, there is. More and more of these disputes are handled privately with minimal litigation costs. The parties involve themselves in what is called alternative dispute resolution. There are three basic methods: mediation, arbitration and private settlement services. They are described as follows:

Mediation
The role of mediator is to be neutral; he/she cannot take sides or judge who is right or who is wrong. The mediator's job, quite simply, is to lead the parties to their own resolution. Each party has the right to be assisted by legal counsel, if desired. The advantages to mediation are many: it reduces costs, in many cases it may resolve personal conflicts and, most importantly, the parties control their own fate. If the parties agree, the mediation can be binding. You can actually walk out of the room with an agreement in your hands which would be enforceable in the future.

Private Arbitration
With private arbitration, the parties can either pick one neutral arbitrator to handle the entire dispute or they can each pick one arbitrator and their chosen arbitrators select a neutral to chair an arbitration panel. The advantages are relaxed discovery, relaxed rules of evidence, quicker hearings and quicker results. Most importantly, the costs to the litigant are drastically reduced.

Private Settlement Services
This technique is, basically, a combination of the above two concepts. Private settlement services are used when the parties are in the midst of litigation and both parties realize that a settlement might make more sense than incurring an additional $10,000 to $20,000 or more in litigation costs. In private settlement services, the settlement facilitator will often split the parties into separate rooms and shuttle back and forth with settlement offers, and counter offers. The settlement facilitator is an experienced trial attorney who has seen it all and can give each party a candid assessment of their view of the value of the case at hand. Again, the advantage here is reduced litigation costs and some finality to the litigation if the parties agree to be bound by the agreement they reach in the settlement conference.

Litigation costs can be very high and emotions can run the gamut of anger and even worse. With private dispute resolution, parties can resolve business disagreements, estate and trust disputes, family law matters, in a more efficient and surprisingly more satisfactory way than heated courtroom battles, appeals and collections. This is a service that the Private Dispute Resolution division of MacElree Harvey is proud to offer to its clients and the community in general.

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