What is alternative dispute resolution?

What is alternative dispute resolution?

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Mar 01, 2002

Disputes and conflicts commonly arise in any business.

Veterinary medicine is no different.

When disputes and disagreements grow to a level that requires outside counsel or assistance, resolution can become costly.

Anyone who has been through divorce, partnership dispute or situations of employee litigation understands that this cost can be more than monetary.

Time and money

Time exacted in the course of litigated proceedings is time away from practice and attentiveness to client communications and patient care.

Besides time and money, the emotional toll can be immense. The process of achieving resolution in a complex court system exacts a price in anger, resentment, worry and feelings of helplessness.

All in all, the worrying affects of prolonged litigation of an unresolved dispute can lead to mental anguish and physical responses that are worse even than the fees paid for legal assistance.

Fertile ground

In veterinary practice today, the probabilities of disputes are many. Issues arise in the course of employment, marriage, dealing with suppliers and vendors, and equipment leasing arrangements. Client disputes, disagreements among landlords and tenants, and property damage are others. Unpaid loans and disagreements with the business owner or family of a neighboring property, as well as the township itself are possible problems that arise. Hospital expansion and zoning can result in difficulties.

Proactive prevention

With all of these possibilities, doesn't proactive prevention seem like a reasonable plan?

Veterinarians' and practice administrators' increased knowledge of the legal aspects of dispute resolution could reduce the cost and angst of the process.

One way to engage in practice prevention is to understand how the legal system works, and understand the alternatives to how conflicts can be resolved.

One idea that is gaining increased favor in the American business environment is that of alternative dispute resolution (ADR). Basically, two forms of dispute resolution exist outside the court environment. These are mediation and arbitration.

In arbitration, each party agrees for any controversy or claim arising out of a contract to be settled under commercial arbitration rules. One or three arbitrators may be used. In arbitration, facts and information surrounding the claims of all parties are heard by the arbitrators.

The arbitrators then dictate a solution, including awards to be made to one party or the other. In agreeing to arbitration, the parties to this dispute agree that they will faithfully observe the arbitrator's rules, and to abide and perform any award rendered by the arbitrators. A court having jurisdiction may have judgment entered on the award in an arbitrated dispute.

An alternative to arbitration is mediation.

In mediation, a neutral assists the parties to the dispute in reaching a settlement. The mediator does not have the authority to make a binding decision or award.

Knowledge important

Knowledge of mediation and arbitration methods and their availabilities are important from several different standpoints.

First, when you enter into any contractual arrangement, consider including a clause within the agreement that states how any dispute might be settled.

For example, a standard arbitration clause, as suggested by the American Arbitration Association (AAA), states: "Any controversy or claim arising out of or relating to this contract, or breech thereof, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof."

Similarly, if mediation is the preferred method of settling a contractual dispute, then a clause can be entered that specifies mediation as the method to use.

If you are already involved in a dispute or disagreement that you know to be heading to litigation, use your legal counsel to negotiate a means to settle the agreement using arbitration or mediation.

A sample agreement regarding arbitration could be worded as in this example provided by the AAA:

"We, the undersigned parties, hereby agree to submit to arbitration administered by the American Arbitration Association under Commercial Arbitration Rules the following controversy: (state briefly). We further agree that the above controversy be submitted to (1)(3) arbitrator(s). We further agree that we will faithfully observe this agreement and the rules, that we will abide by and perform any award rendered by the arbitrator(s), and that a judgment of the court having jurisdiction may be entered on the award."

Conflict management in practice

Understanding arbitration and mediation procedures can also be beneficial in the veterinary practice setting.

Employees who have been trained to understand arbitration and mediation technique can be more effective in resolving situations with clients, co-workers and vendors. Many of the techniques provide general understanding of body language, the reasons conflicts arise and how to improve communications that help resolve such issues.

Mediation and arbitration training teaches the use of effective questioning and listening techniques for discovering facts. Since any conflict can be viewed as constructive, anything we can do to learn better management of conflict becomes beneficial. Poor management of conflict is more of the difficulty than conflict itself.

Casualties

By not having the personal skills to manage conflict, morale and motivation may be reduced. People feel misunderstood and angry. Some individuals will fear that their concerns are not addressed and a perceived adversary's side has been taken.

Learning mediation techniques is probably the best starting point for a practice manager in understanding human conflict management.

Mediation is based on a principle of self-determination, that is the participants reach voluntary, uncoerced agreement. Good mediation techniques encourage mutual respect among parties by raising issues and exploring options.

The mediator serves as a neutral facilitator. Practice administrators and managers need to have good mediation skills so they appear impartial and even-handed, with no appearance of favoritism to one employee or another. With effective training, parties have confidence that their side of a situation is understood and heard.

ADR advantages

What are some advantages of formal alternative dispute resolution?

ADR allows the parties to resolve problems that cannot be talked out before ending up in court. As the veterinary profession becomes more medically complex, it also experiences increased exposure to the escalating use of traditional legal methods at every level of the profession.

ADR is less formal than a day in court and allows parties to vent their emotions. The whole process is less time consuming than using conventional legal processes and is more personal and private.

Resolutions tend to emerge more promptly, while animosity is likely to be dissipated.

In mediation, parties retain control of the outcome. Other legal options are not foreclosed if no agreement can be reached.

In arbitration, the aggrieved party receives relief sooner than could be anticipated in traditional legal processes. Although some ability to appeal the decision made by the arbitrator exists, it is very limited. Individuals agreeing to arbitration must be willing to abide by the determination of the arbitrator.

ADR resources

The AAA - a public service, not-for-profit organization - offers a broad range of dispute resolution services and education and training. It is headquartered in New York City, and has offices located in major U.S. cities (140 W. 51st, New York, NY 10020-1203 (212) 484-4000).

The Veterinary Alternative Dispute Resolution Association (VADRA) has goals to provide arbitrators and mediators to hear veterinary disputes, through special understanding of the veterinary profession (VADRA, Owen J. McCafferty, JD, P.O. Box 819, North Olmsted, Ohio 44070, (440) 779-1099.)

Watch for seminars and presentations at various veterinary conferences regarding mediation skills. For example, Mr. Doug Jack, BA, LLB, will be speaking at the 2003 Western Veterinary Conference about practice ownership relationships, dispute resolution and mediation techniques.

A variety of easy-to-read and common sense books regarding mediation and arbitration skills are available. One resource we find especially helpful is "From Conflict to Cooperation: How to Mediate a Dispute," by Dr. Beverly Potter (Ronin Publishing, Inc., P.O. Box 1035, Berkeley, CA 94701, published in 1996).

Your situation

In the process of updating buy/sell agreements, practice purchase documents, promissory notes, employment contracts or any other agreement, remember the options for arbitration and mediation at a later date as an alternative to the normal legal recourses.

Ask your attorney if including such a clause within the agreement would make sense within your particular situation. Your attorney can provide guidance as to arbitration and mediation resources that will fit your needs, or refer you to appropriate resources.