What is the simplest most direct and least expensive way to settle a dispute quizlet?

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Advantages of Mediation
Few procedural rules are involved in the mediation process—far fewer than in a courtroom setting.
The proceedings can be tailored to fit the needs of the parties—the mediator can be told to maintain a diplomatic role or be asked to express an opinion about the dispute, lawyers can be excluded from the proceedings, and the exchange of a few documents can replace the more expensive and time-consuming process of pretrial discovery. Disputes are often settled far more quickly in mediation than in formal litigation.

Brings the Parties Together. One of the biggest advantages of mediation is that it is not as adversarial in nature as litigation. In mediation, the mediator takes an active role and attempts to bring the parties together so that they can come to a mutually satisfactory resolution.

The mediation process tends to reduce the antagonism between the disputants, allowing them to resume their former relationship while minimizing hostility. For this reason, mediation is often the preferred form of ADR for disputes involving business partners, employers and employees, or other parties involved in long-term relationships.

Parties Choose the Mediator. Another important benefit of mediation is that the mediator is selected by the parties. In litigation, the parties have no control over the selection of a judge. In mediation, the parties may select a mediator on the basis of expertise in a particular field as well as for fairness and impartiality. To the degree that the mediator has these attributes, he or she will more effectively aid the parties in reaching an agreement over their dispute.

Nearly all states follow the federal approach to voluntary arbitration. Most of the states and the District of Columbia have adopted the Uniform Arbitration Act, which was drafted by the National Conference of Commissioners on Uniform State Laws in 1955. Those states that have not adopted the uniform act nonetheless follow many of the practices specified in it.

Under the uniform act, the basic approach is to give full effect to voluntary agreements to arbitrate disputes between private parties. The act supplements private arbitration agreements by providing explicit procedures and remedies for enforcing arbitration agreements. The uniform act does not, however, dictate the terms of the agreement. Moreover, under both federal and state statutes, the parties are afforded considerable latitude in deciding the subject matter of the arbitration and the methods for conducting the arbitration process. In the absence of a controlling statute, the rights and duties of the parties are established and limited by their agreement.

In the following case, the parties had agreed to arbitrate disputes involving their contract, but a state law allowed one party to void a contractual provision that required arbitration outside the state. The court had to decide if the FAA preempted (took priority over, or blocked—

Because the parties are free to construct the method by which they want their dispute resolved, they must specify the issues that will be submitted and the powers that the arbitrator will exercise. The arbitrator may be given power at the outset of the process to establish rules that will govern the proceedings. Regardless of who establishes the rules, the arbitrator will apply them during the course of the hearing.

Restrictions on the kind of evidence and the manner in which it is presented may be less rigid in arbitration, partly because the arbitrator is likely to be an expert in the subject matter involved in the controversy. Restrictions may also be less stringent because there is less fear that the arbitrator will be swayed by improper evidence. In contrast, evidence in a jury trial must sometimes be presented twice: once to the judge, outside the presence of the jury, to determine if the evidence may be heard by the jury, and—depending on the judge's ruling—again, to the jury.

In the typical hearing format, the parties begin as they would at trial by presenting opening arguments to the arbitrator and stating what remedies should or should not be granted. After the opening statements have been made, evidence is presented. Witnesses may be called and examined by both sides. After all the evidence has been presented, the parties give their closing arguments. On completion of the closing arguments, the arbitrator closes the hearing.

Parties are afforded wide latitude in establishing the manner in which their disputes will be resolved. Nevertheless, an agreement to arbitrate may be governed by the Federal Arbitration Act (FAA) or one of the many state arbitration acts, even though the parties do not refer to a statute in their agreement.

Recall that the FAA covers any arbitration clause in a contract that involves interstate commerce. Frequently, however, transactions involving interstate commerce also have substantial connections to particular states, which may in turn have their own arbitration acts. In such situations, unless the FAA and state arbitration law are nearly identical, the acts may conflict. How are these conflicts to be resolved?

As a general principle, the supremacy clause and the commerce clause of the U.S. Constitution are the bases for giving federal law preeminence. When there is a conflict, state law is preempted by federal law. Thus, in cases of arbitration, the strong federal policy favoring arbitration can override a state's laws that might be more favorable to normal litigation.

The result in any particular dispute can be unpredictable, in part because arbitrators do not need to follow any previous cases in rendering their decisions. Unlike judges, arbitrators do not have to issue written opinions or facilitate a participant's appeal to a court. Arbitrators must decide disputes according to whatever rules have been provided by the parties, regardless of how unfair those rules may be.

In some disputes, arbitration can be nearly as expensive as litigation. In part, this is because both sides must prepare their cases for presentation before a third party decision maker, just as they would have to do to appear in court. Discovery usually is not available in arbitration, however, which means that during the hearing the parties must take the time to question witnesses whom, in a lawsuit, they would not need to call.

Mediation is proving to be more popular than arbitration as a court-related method of ADR, and mediation programs continue to increase in number in both federal and state courts. Today, more court systems offer or require mediation, rather than arbitration, as an alternative to litigation.

Mediation is often used in disputes relating to employment law, environmental law, product liability, or franchises. One of the most important business advantages of mediation is its lower cost, which can be 25 percent (or less) of the expense of litigation. Another advantage is the speed with which a dispute can go through mediation (possibly one or two days) compared with arbitration (possibly months) or litigation (possibly years).

Part of the popularity of mediation is that its goal, unlike that of litigation and some other forms of ADR, is for opponents to work out a resolution that benefits both sides. The rate of participants' satisfaction with the outcomes in mediated disputes is high.

As you will read in Chapter 11, parties to international transactions often include forum-selection and choice-of-law clauses in their contracts. These clauses designate the jurisdiction (court or country) where any dispute arising under the contract will be litigated and which nation's law will be applied.

When an international contract does not include such clauses, any legal proceedings arising under the contract will be more complex and attended by much more uncertainty. For instance, litigation may take place in two or more countries, with each country applying its own national law to the particular transactions.

Furthermore, even if a plaintiff wins a favorable judgment in a lawsuit litigated in the plaintiff's country, the defendant's country could refuse to enforce the court's judgment. As will be discussed in Chapter 8, the judgment may be enforced in the defendant's country for reasons of courtesy. The United States, for example, will generally enforce a foreign court's decision if it is consistent with U.S. national law and policy. Other nations, however, may not be as accommodating as the United States, and the plaintiff may be left empty-handed.