The Legal System Adr Analysis
Posted On March 18, 2017
The Legal System ADR Analysis
By Tina Sellers
June 21, 2013
University of Phoenix
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RE: Partnership dispute between Bob and Mike in an unincorporated television and electronic retail business.
DATE: June 21, 2013
FACTS: Bob and Mike went into a business agreement but never entered to a formal agreement. Bob decided to reduce his working hours, in response to this Mike decided to higher Bobs son as a consultant without Mikes knowledge or agreement. Bob then decided to close the partnership account and opened a sole signatory account since Mike had decided to deduct Bobs drawing amount.
The legal phase for this case would start with small claims courts and could proceed to the State trial courts of general jurisdiction. If no settlement in the state trial court, this could go to the state appeals court and ultimately to the supreme court. Most cases are settled in small claims court.
Any litigator can attest that litigation among business owners can sometime become lengthy and also expensive as well as destructive to the long standing relationships among businesses. Most of these cases arise and layers must find dispute resolution other than traditional litigation and this minimizes delay, business disruptions and expenses and also results to more satisfactory outcome. Mediation and arbitration are some of the most common responsive solution for parties in a way that is impossible in the court system. They are particularly applicable where disputes among business owners as these cases raise unique legal and emotional issues that cannot be solved promptly and may have devastating impact on both the owners and the businesses. Under the current law, the court has relatively few options that are available for it to resolve disputes between business partners, managing members and shareholders of business entities. Those options are often limited to determining whether dissolution is a appropriate as it may be the only remedy to the court. Meditation and arbitration are flexible procedures compared to derivatives actions that are too complex and uncertain in the closed held entity context. Mediation and arbitration offer a whole range of remedial options and does this in an expeditious and cost effective manner. Most of the judges often refer to disputes that are there between business owners to mediation at the outset of litigation.
Litigation claims addressing these types of business ownership and management disputes must conform to establish and limited statutory and common law rights, causes of remedies and actions and procedures. Layers in most of these cases take a lot of time to get things going: analyzing the facts, applicable cause of action, commencing an adversarial and public proceedings often seeking immediate injunctive relief. Litigation requires the preparation of adversarial documents that often must contain strong allegations of wrongdoing to meet statutory requirements, having the effect of infuriating the other party for further exacerbating the dispute. It involves an expensive and time consuming discovery process that is subject to numerous avenues of delay before a hearing or trial is held. During this lengthy process, the public and adversarial nature of the dispute may itself have a serious impact on the business as the stress in the parties; relationship seeps into the workplace and employees feel caught in the middle, customers start to look elsewhere and owners focus more on their dispute instead of the business and legal costs spiral upward. All too often, the end result is that neither party is satisfied nor the business itself may not have survived.
This is the process where parties engage a neutral arbitrator who conduct an evidentiary hearing and render an award in connection with a dispute that has arisen between them. This process is a process of an agreement between the parties, either pre-dispute in a contract as is generally the case or post disputes when difference arises, the process can be tailored to meet the needs of the parties. For the arbitration process, it comes with many advantages: such as it is speedy and efficiency since it is a more expedited process than the litigation. It also results to substantial savings thus it is not expensive. And in this case it can save attorneys fee and court costs. The process is flexible, confidential, quality of the decision makers and finality where the decision made are final unlike in the litigation process where a party can appeal.
This is the process where parties engage a neutral third person party to work with them so as to facilitate the resolution of a dispute. In this type of ADR, the parties have a high satisfaction as they retain control and tailor their own solution in a less confrontational setting that preserves relationships. While not every case can be settled, an effort to mediate is appropriate in virtually any subject and any area of the law. The advantages of this process include: control by the respective parties, it gives an opportunity to be listened to and be heard, also helps in complicated cases and can also save an existing relationships between business owners. Mediation also reduces costs, lessen emotional burden and also avoids uncertainty of a litigation process outcome.
Business law : legal environment, online commerce, business ethics, and international issues / Henry R. Cheeseman.??” 8th ed. p. cm.