This section provides a brief overview of Litigation issues commonly encountered by parties involved in lawsuits, arbitration or mediation. Please review the list of litigation articles below.

Retain Legal Counsel in the Event of a Dispute
When a Problem Develops, Take Immediate Action
How Binding is Arbitration?

 

Retain Legal Counsel In the Event of a Dispute

At a party several years ago, someone asked me what it was like to be a lawyer. I responded "It's just like L.A. Law. People come into my office each day with the most astounding problems. We resolve everything in an hour, and we handle eight matters a day.

"After the laughter died down, I explained that people who go to law school based on what they see on television or in theatres are likely to be sorely disappointed. In over 10 years of practice, I can count on the fingers of one hand the number of times I've seen a witness break down, or 'fess up, or produce the 'smoking gun,' and admit that he or she was either guilty or wrong. But Perry Mason managed to do it every episode.

My clients are sometimes surprised, and always disappointed, when they learn that people in litigation don't always follow "truth, justice, and the American way." At trial or deposition, attorneys are often civil to each other and to the opposing sides, and may even smile at each other. While litigation may sometimes appear to be civil, in many ways it is a hard-fought contest, with both sides struggling to win, often at a very high cost. Clients are sometimes surprised at the substantial costs involved. But building a case in many respects is like building a house and in significant cases even the costs can be similar.

Because such a conflict often consumes such a significant amount of time and resources, I generally counsel clients to prepare themselves as best they can prior to such an event. By the time a matter gets to litigation, the time for some of the preparations has passed. When clients are concerned about possible litigation, I advise them to have the best contracts they can. How do they have such contracts prepared? By competent counsel. People who aren't lawyers often look at lengthy contracts and think "that's just boilerplate" or it's "just a standard contract." There really is no such thing. At trial, the judge may decide significant portions of your case in your favor - or against you - based on that very contract that at one time appeared so mundane. The best protection? If you're signing a contract that you're concerned about, have it reviewed by competent counsel.

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When a Problem Develops, Take Immediate Action

The parties have signed a contract, and now it's time for performance. One side begins to sense that important facts in the transaction may not have been disclosed before the contract was signed? What should both parties do?

A contract is an agreement between two or more persons where both sides agree to provide goods, services, or something of value to the other side. What happens when one side fails or refuses to perform? Or what happens when one side begins to feel that the contract was not fairly negotiated, such as a situation where defects in goods or services were not disclosed?

The parties, having entered a contract, now find themselves in a situation where performance is not what was expected. At this point, the party that doesn't receive full performance has a problem, and that party actually has two problems. The first problem is how to get the other side to perform, and the second problem is the potential cost of getting the other side to perform.

When contract disputes arise, many people have a natural tendency to try to informally resolve the problem with the other party. This approach can sometimes be successful, and if successful both parties can save attorneys fees in attempting to resolve the dispute. But what about situations where the other party absolutely refuses to perform, or where the party lack the necessary resources to perform?

At this point, one or both of the parties frequently seek legal counsel. In some situations, an attorney is consulted early in the process, but in others an attorney is consulted after extensive efforts by the parties to informally resolve the dispute.

What should the parties consider in deciding whether to retain counsel? Cost is often an issue, and in very small matters an attorneys fee may not but justified. But when dealing with matters of any significance, in almost every situation people's rights are better preserved when they consult competent counsel. An attorney is trained to spot legal issues, legal rights, and to counsel clients on how best to preserve their rights. On a practical level, many attorneys deal with disputes, confrontation, and problems on a daily basis, and over a period of time they develop a sense of dispute resolution, and like a river guide, they can sometimes help clients know what to expect. They can often use their experience to help clients see what may be around the next bend. Because such attorneys are experienced in dispute resolution, they can sometimes provide invaluable assistance in helping clients decide which steps are necessary or best for resolving a particular dispute.

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How Binding is Arbitration?

Nobody wants to buy a lawsuit. But most people want to buy a house. So what happens when home buyers discover they bought the house of their dreams but one of the dreams is a nightmare?

The first step is often to call the seller. If the home is new, the seller is usually a developer, and most developers provide a warranty with their homes. In these cases, a buyer can often have the problems fixed at the expense of the seller.

But what happens when the seller is another homeowner instead of a developer? Homeowners often don't have the resources to repair major problems with a home. In some cases, sellers claim they didn't know of problems (when they actually may have). In other situations, even a developer may be unwilling to acknowledge a problem or repair it.

If buyers and sellers can't agree about repairing problems with a house, they usually involve lawyers. The lawyers may exchange several phone calls and letters. If agreement can't be reached, the lawyers file a lawsuit.

Are lawsuits effective? They can be. Every lawsuit is eventually resolved, either by agreement between the parties, or by a judge or jury at trial. Are lawsuits expensive? They can be, and they typically are. The expense depends on how the lawsuit is handled and the length of time before it is resolved. Most trials are held approximately one year after the lawsuit is started. The cost of a lawsuit through trial can be surprisingly high. Is there any way to reduce the costs of a lawsuit? Yes through binding arbitration.

"Binding Arbitration" is dispute resolution without a lawsuit. In "Arbitration", a dispute is submitted to an "Arbitrator" who is often an attorney or a retired judge. Both sides present their case at an "Arbitration" which is similar to a trial. "Binding" means the result is final with no right to appeal.

"Arbitration" is similar to a trial in that both processes use a hearing, or trial, before a decision maker. At Arbitration, the decision maker is an "Arbitrator." At trial, the decision maker is a judge (or jury). In both processes, the decision is final and legally binding between the parties.

Arbitration is different from trial in several ways. Arbitration is less intrusive. In many arbitrations, neither side has the right to ask the other side any questions before arbitration. This can make the process less expensive than a lawsuit, where both sides have the right to ask the other side many questions. Arbitration is often concluded in a matter of months instead of nearly a year. Arbitration is usually thought of as faster and less expensive than trial.

One of the prime differences between trial and Arbitration is the right to appeal. Because Arbitration is designed to be final, there is no right of appeal. Because Arbitration has no right of appeal, the process can be much shorter. But if an arbitrator makes an error, the parties have no recourse. As a result, an Arbitrator is not required to follow the law. His or her decision is final and binding, even if it is legally incorrect. This means that Arbitration may be faster and less expensive than trial, but it may also be less predictable.

There is no correct answer whether trial or arbitration is better in any given situation. Each situation must be evaluated separately.

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