What Is Conflict Prevention?
Conflict prevention is an idea that comes from a company managing its risk by trying to develop a culture that wants to present the company to the world, or to operate under a situation, where it tries to avoid conflict. It does this by either collaboration or cooperation. But structuring a conflict prevention culture or set of policies and procedures is something that we can do based on our experience of twenty-three years of handling lawsuits, and seeing how issues of liability could have been avoided by the same token companies. Those token companies are the ones that have been in business for many years, and have had general liability insurance or other types of insurance over that course of time. They have worked with their insurance companies or insurance brokers many times in a risk prevention or risk mitigation culture within the company.
When it comes to conflicts, it’s a similar idea, but also a little bit different because once you have tried to avoid a liability exposure, the idea of preventing a conflict resulting from exposure, then it’s something that we would engage with our client to try and help them with.
Is Alternative Dispute Resolution Legally Binding?
Alternative dispute resolution can be legally binding unless a contract provides that the arbitration is non-binding. When it comes to mediation, a negotiated settlement in the context of a mediation agreement is binding because it is a contract that the two parties sign in the form of a settlement agreement, mediation agreement, and a final settlement and release agreement. All of those things are results from a mediation, and once a party signs an agreement to resolve a lawsuit under mediation or arbitration, then that is a contract between the two parties, and it is legally binding.
Why Is Alternative Dispute Resolution Or ADR So Important?
ADR is important because it almost always results in the resolution of a lawsuit. 90% of all lawsuits get resolved by mediation in settlement negotiation. It takes time to develop a settlement position once a discovery process has gone through, and sometimes each side has to recognize facts from that day that you were not aware of, didn’t want to, or wanted to ignore in the past. But because of the success rate of alternative dispute resolution it is very important. Not only is ADR successful in resolving almost all disputes, it is also cheaper than taking a case to trial. In 2019, I handled a case in which the parties were engaged in litigation for three years, and they were never able to come to agreement for settlement. One side had proposed an amount of about $2 million dollars to resolve the lawsuit, and the other side didn’t have that kind of money anymore.
But, when the case went to trial, it resulted in a judgment of $10 million, which was then negotiated in a post-trial mediation down to $6 million. As a result, the actual resolution of the case did result in a large amount of money being transferred from one side to the other, and if the parties had engaged in more fruitful negotiations prior to the trial, they would have had a different outcome. That is an example of why sometimes you shouldn’t go try a case if you’re the one paying, but certainly, if you’re the one who is wanting to get the resolution prior to the trial. Trials are uncertain, you never know how a jury is going to interpret the information that is presented to them, and whether or not they will pay attention, or even put the pieces together in a way that makes sense. Therefore, juries are sometimes very effective.
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