Originally from:

AAA Handbook on Arbitration Practice - Second Edition

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CHAPTER 4

WHAT PARTIES MIGHT BE GIVING UP AND
GAINING WHEN DECIDING NOT TO LITIGATE:
A COMPARISON OF LITIGATION,
ARBITRATION AND MEDIATION

Donald L. Carper and John B. LaRocco

Deciding whether to litigate, arbitrate, or mediate requires an
understanding of three dispute resolution processes. The authors begin
with the major characteristics of litigation, and then discuss whether
these characteristics are present in arbitration and mediation, and if not,
how these processes differ.

I. Introduction

Why one might choose to use an alternative dispute resolution (ADR)
process to resolve a legal problem is an interesting question, but it is not
the focus of this article. Instead, it focuses on the fundamental attributes of
litigation and explores whether these attributes are present in private
arbitration and mediation. The purpose is to help people make an informed
decision about the process they wish to use to resolve their dispute. This
comparison also could help designers of ADR systems identify and
preserve attributes desired by parties and jettison those that are not.

We grew up when litigation was the main avenue of dispute
resolution. Arbitration was not then accepted by the courts. The attitude
of the time toward righting wrongs was to litigate. The phrase “sue the
bastard” was in common use.

The acceptance of the courthouse as the place to resolve disputes has
improved the lot of millions of persons worldwide. However, as
important a civilizing influence as this was, the courtroom is not, and
should not be, the only means of dispute resolution in a civilized society.
Abraham Lincoln predicted the importance of litigation alternatives
when he wrote, “Discourage litigation. Persuade your neighbors to
compromise whenever you can. Point out to them how the nominal
winner is often the real loser—in fees, expenses, and waste of time.”2 He
also suggested that lawyers should help the parties settle their disputes
out of court and not worry that their income will suffer.3 He recognized
that even if the rule of law is the foundation of a civil society, litigation
should be used only as a last resort.

In recent years we all have become more familiar with ADR
processes. Even the courts have adopted their own ADR programs to
better control their dockets and close cases faster. Thus, we now see
ADR processes playing a role in maintaining social stability and order.

Yet the main reason for the growth in the use of ADR is not that
these processes are inherently superior to litigation. Rather, it is
dissatisfaction with the litigation model. Here are some often-quoted
reasons for using ADR4:

• to lower court caseloads and expenses;
• to reduce the parties’ expenses and the time it takes to resolve
disputes;
• to encourage speedy settlements;
• to improve the public’s satisfaction with the justice system;
• to encourage resolutions that are suited to the parties’ needs;
• to increase voluntary compliance with resolutions;
• to restore the influence of neighborhood and community values
and the cohesiveness of communities;
• to provide accessible forums to people with disputes;