Volume 3, Number 1
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Representing Individuals in Mandatory ADR Proceedings
Mandatory arbitration/mediation clauses are becoming more and more prevalent in contracts today. The clauses range from just limiting the forum, to limiting damages and procedures available to consumers and employees are becoming common place. These clauses are becoming standard provisions included by some of America’s largest corporations. Chances are your cell phone contract has such a clause: your home service contracts, (such as termite protection, lawn care, and more), have such clauses: your credit card contracts likely have similar provisions; many employers require employees to sign such agreements prior to extending an offer of employment. The proliferation of mandatory arbitration/mediation clauses in contracts is the result of the courts general preference for alternative dispute resolution and their willingness to enforce ADR provisions. Second, the companies are seeking to avoid judges and juries and their unpredictable nature. Third, and not to be discounted, companies are seeking to contain and control litigation costs.
The growth of these provisions, both in the consumer and the employment world, has led to an increasing likelihood you may represent a client in this forum, either as a consumer or in business.
This article sets forth some of the issues raised by employer/employee and consumer/vendor disputes and ADR mechanisms available to assist the practitioner in representing the employee or consumer effectively in this venue.
The first step is to review the provisions and the contract itself to determine whether there are grounds in your state to challenge the mandatory arbitration term. Many limit types of claims, type of damages (generally to compensatory damages), venue for disputes and whether the decision can be appealed. They are one-sided contracts by design. The first consideration is whether to challenge the mandatory ADR provision in court. Depending upon your home state and the financial resources available to you and your client, a challenge to the mandatory ADR clause may be unpractical.
How you prepare and approach the ADR session will greatly depend upon the contractual requirements and your right to file a claim in a court of law. It is common that these provisions limit the aggrieved party to mandatory arbitration, with no right to appeal. In that case, you should:
Prepare for arbitration like you are preparing for TRIAL. Consider this is your client’s only shot at an award, many times there is no right to appeal the decision, so prepare just like you would prepare the case for trial.
There are some advantages to mandatory arbitration. You can stipulate to present experts by reports, saving time and money. Your presentation can be less formal, also saving time and expense. Many times discovery is less formal and can be done on a more informal basis. Much of a traditional motion practice can be eliminated. An added benefit is that clients seem to be more at ease in the less formal setting.
Some clauses are requiring mandatory mediation before any claim can be filed. In this instance, there are different considerations:
Joan practices in St. Louis, Missouri at the Law Office of Joan M. Swartz LLC. Her office focuses on representation of businesses and individuals in business related matters. She is a 1987 graduate of St. Louis University School of Law. She is also a trained mediator, serving on United States Arbitration & Mediation Midwest, Inc.’s panel since 2002. She has participated in a number of mediations and arbitrations both as an advocate and a mediator. You can contact her at: email@example.com.