Many corporations, especially those faced with cost containment in the past, are trimming legal fees and production downtime by using dispute resolution in a variety of commercial conflicts, including contract disputes, employee complaints and product liability suits.
What are the incentives to use dispute resolution? When companies attempt dispute resolution before going to court, they can realize lower yearly legal fees, preserve positive working relationships, have more involvement in the resolution process, and realize "collateral" benefits that translate into a company's unblemished or improved public image.
Popular forms of dispute resolution include negotiation, mediation and arbitration. Decisions can be binding or non-binding, depending on what the two parties want. Arbitration and mediation require the involvement of a neutral third party, usually an attorney, retired judge or industry expert. This person listens to the arguments and helps the parties reach a settlement. The process is confidential and generally quicker than litigation, even in cases where an award is sought.
A 1995 survey by the Center for Public Resources Institute for Dispute Resolution, a coalition of businesses and law firms, found that corporations who participated in dispute resolution experienced an average savings of $300,000 during a five-year period. In addition, dispute resolution processes are endorsed by many corporate law firms.
For these reasons, using dispute resolution in commercial conflicts continues to grow in popularity. According to a 1997 survey by Cornell University, the Foundation for the Prevention and Early Resolution of Conflict and Price Waterhouse LLP, 88 percent of corporations reported using mediation in the last three years and 79 percent reported using arbitration. More than 84 percent reported they were likely to use mediation again in the future, and 69 percent report they are likely to use arbitration.
Here in Columbus, dispute resolution has been successfully used by Nationwide Insurance. The corporation has participated in Franklin County's Settlement Week for more than a decade. During this biannual event, in which volunteer attorneys help mediate conflicts, Nationwide has successfully settled 60 percent of its scheduled cases.
Bob Parsons, Nationwide assistant general counsel, says using dispute resolution is consistent with the company's business practices. It's a benefit to customers, as well as the company, to try to resolve these disputes without the high costs of litigation.
The Ohio Commission on Dispute Resolution and Conflict Management-a non-regulatory agency of 12 education, legal and business leaders-can help businesses locate organizations that provide dispute resolution services. If you would like to set up dispute resolution processes in your business, contact the commission at 752-9595 for more information, or call your local bar association.
Dispute resolution doesn't work in all situations. But resolving to try these processes before going to court could mean a financially stronger company, a preserved working relationship or a satisfied employee. These are options worth considering.
Maria Mone is executive director of the Ohio Commission on Dispute Resolution and Conflict Management.