🔒Seeking meaningful results in lawsuits

Your business is involved in a lawsuit, or about to be. Have you thought about whether the result of a trial will be meaningful to you?

If you are the plaintiff, winning at trial might not mean much financially if the defendant does not have any assets. If you are the defendant, winning at trial might not mean much if certain sensitive information about your company becomes public. Conversely, those results might be meaningful to you if you really want your day in court for reasons concerning public perception.

Each client is unique in terms of its goals, financial resources, business concerns, patience for the pace of litigation, tolerance for public exposure, opponent, etc. In evaluating your dispute, you should consider what a meaningful result would be and whether mediation or binding arbitration is an alternative.

Mediation

Mediation is an effort to reach a settlement agreement with the services of a neutral mediator who will attempt to bring the two parties together. Frequently, the mediator is a seasoned lawyer who practices in the area of the dispute or a former judge.

Mediation requires the participation of both parties, but gives them the freedom to control the terms of a settlement or to walk away. Whether you reach a settlement depends on the factors important to you and their costs.

Perhaps you are willing to take a discount on your alleged damages if you can obtain an immediate cash payment; perhaps you do not want to subject your employees to numerous depositions and disrupt your business operations; perhaps you want to allocate payment to certain claims for tax or lien purposes; or perhaps you are willing to pay to make a problem go away before it hits the news outlets. Settlement allows you to take those considerations into account and control the outcome.

Typically, settlement agreements contain clauses (1) requiring the parties to keep the settlement terms confidential, (2) requiring the parties to refrain from disparaging each other, and (3) identifying neither party has made any admissions concerning the dispute.

Binding arbitration

An average track case in the Massachusetts Superior Court provides for a trial three years from filing. Thus, the process can be slow and expensive due to the wide-breadth of pretrial discovery and numerous court hearings.

Binding arbitration is considered to be faster, less expensive, and less rigid. An arbitration is similar to a trial in the parties present evidence, elicit witness testimony, and make arguments; however, the arbitrator’s decision is binding, with limited grounds for having the decision reviewed. If the parties agree to arbitrate, they can usually schedule a hearing within a few months, and the proceedings can be confidential.

The parties have significant control over the parameters of the arbitration, such as deciding whether an arbitration association’s standard rules will apply or whether the parties will create their own rules. For instance, the parties might decide to limit discovery to two depositions and 10 document requests per side, require the arbitrator be an attorney with 10 years of commercial litigation experience, and provide for a cap of three days of presentation per side.

The court serves an incredibly important role in our society, and trial might be your best course of action; but consider whether these alternatives can provide you with a meaningful result.

Jared A. Fiore is an attorney at Worcester law firm Bowditch & Dewey, LLP. Reach him at jfiore@bowditch.com