OBE 118 - LEGAL ENVIRONMENT OF BUSINESS

Dispute Resolution

PREFATORY THOUGHTS

You are discussing with your attorney a legal problem. You are confident that your version of the facts in the dispute can be proved.

You ask the attorney “does my cause has merit?

She says “yes.”

You ask if you pursue the case will you win?

She says: “I cannot predict the future.”

You ask “What are my chances? “

She says, “Assuming what you told can be proved” then:

PREFATORY THOUGHTS

She says, “assuming the story you have told is correct” then:

EXCELLENT

PREFATORY THOUGHTS

Assuming a winning case

•What is the importance of debt collection and the term judgment debtor?

Alternative Dispute Resolution (ADR) describes alternatives to the traditional judicial resolution of disputes

•Major approaches to dispute resolutionPowerRightsInterest

ADR suggests a move from a rights approach to an interest based approach in dispute resolution.

ALTERNATIVES TO LITIGATION INCLUDE

Arbitration

Mediation

Negotiation

Of less importance

Private judging

Ombudsperson

Summary jury trial

Mini-trial

ARBITRATION

Disputing parties agree to select a neutral third party

(or parties) to hear and decide the dispute.

Generally private, historically private.

Requirement of (at least) the passive approval of

government, as the awards are ultimately

enforceable in the courts.

TYPES OF ARBITRATION

Voluntary

Pre-dispute agreement provides that arbitration will be used to settle disputes arising between the parties. Clause is part of an otherwise enforceable contract.

Post -dispute agreement. Agreement entered into after a conflict arises.

Involuntary

Judicial arbitration - statute requiring parties in certain cases to submit cases to arbitration as a pre-condition to a lawsuit. It is NON-BINDING.

NATURE OF ARBITRATION (CONTINUED)

Federal and state statutes authorize & encourage arbitration

Arbitration processes are usually less formal than courts.

Power of arbitration based on the agreement of the parties, statutory law, and/or incorporated procedures.

Power of arbitration can be lost at any time if both parties agree to handle the dispute in court.

If arbitration clause exists but one party refuses to arbitrate

the other party can seek a judicial order to compel

arbitration.

NATURE OF ARBITRATION

Issues to be heard, number of arbitrators, arbitrator power, processes to be used, and timing are all-dependent on the arbitration agreement.

Arbitration clauses

provide the procedural and substantive boundaries of the case.

arbitrators clauses are provided from organizations such as AAA

QUALIFICATION AND SELECTION OF ARBITRATORS

Agreement of the parties names the arbitrator(s)

Use of standard clauses of professional associations. Such as the American Arbitration Association

Permanent referee for series of expected or possible disputes

Selection from panels

Expertise in subject matter of dispute

Known in field

Reputation for fairness

Recommendation by board

Trained in hearing processes

WHY SELECT ARBITRATION?

Faster from filing to hearing

Cheaper

Private

Less adversarial than litigation

More certain resolution

WHY SELECT ARBITRATION? (CONTINUED)

PROBLEMS

Private.Public is unaware of disputes in which they may

have an interest. Potential litigants unaware of case outcome.

True consent of parties to arbitration?

Not always less expensive?

Loss of right to correct errors of law as the right of appeal is very limited.

Arbitrator Qualifications ?

MEDIATION

Mediation--A form of negotiation with the most significant attribute being the addition of a skilled third party expert who assists (facilitates) the parties to negotiate their own resolution.

Definition:

Intervention in a negotiation or a conflict by an acceptable third party with limited or no authoritative decision-making power but who assists the involved parties in voluntarily reaching a mutual acceptable settlement of the issues in dispute (Christopher Moore).

MEDIATION (CONTINUED)

• Overall concept is simple. Sometimes referred to as the world’s second oldest profession. Exists in some fashion in most world cultures.

• Two parties in conflict seek a third party to assist them in resolution of that conflict. The third party assists conflicting parties in communicating but does not decide the dispute.

GENERAL NATURE OF AND CONTRAST WITH OTHER METHODS IN THE UNITED STATES

Private while litigation is public.

Parties remain in control of decision rather than relinquishing control to government or third party.

Mediator facilitates agreement instead of imposing a resolution like in litigation or arbitration.

Non-adversarial while litigation in U.S. is adversarial.

GENERAL NATURE OF AND CONTRAST WITH OTHER METHODS IN THE UNITED STATES (CONTINUED)

Occurrence of mediation suggests progress

because it is voluntary. Parties may not agree

on resolution but they agree on a method to

resolve dispute.

Mediation is less formal than other methods.

HOW PROCESS IS SELECTED OR BEGUN

Pre-agreement

Post-agreement

One party seeks mediation and the provider contacts the

other party

Referrals

PROCESS PROVIDERS

Non-profit generalists ADR providers - American Arbitration Association

Community mediation centers such as the Sacramento mediation center

State mediation providers such as the California center for public dispute resolution or the Iowa Peace Institute

Private vendors

CASES MOST APPROPRIATE FOR MEDIATION

The parties have a stake in resolving the dispute.

The parties share motivation for early settlement.

The parties are interdependent and must rely on the cooperation of one another to meet their goals or satisfy their interests.

CASES BELIEVED INAPPROPRIATE FOR MEDIATION

Disputes focused on beliefs.

Severe imbalance of power between the parties.

Unmanageable behavior on the part of either party

MEDIATORS (CONTINUED)

QUALIFICATIONS

Experience in dispute resolution including training and by temperament. Person is able to influence and cajole parties as if a group leader without having had the time to develop that level of respect.

Area expertise. Understands the underlying nature of the dispute.

Listener. Creative problem solver.

Neutral

POSITIVE ATTRIBUTES OR MEDIATION

Can be initiated early in the process providing opportunity to end conflict early with a reduction in conflict cost, legal fees, and psychological cost of conflict. Good public relations.

Studies show that up to 95% of civil lawsuits resolve short of trial. If that is true why not do it early?

NEGATIVE ATTRIBUTES OF MEDIATION (CONTINUED)

Might not get a satisfactory result.

Does not provide a win.

The result generally is some sort of

compromise.

Negotiation

Private judging

Ombudsperson

Med Arb

Summary jury trial

Mini-trial

negotiation Communication for the purpose of persuasion. A process is which disputants communicated

their differences to one another through conference, discussion and compromise in an attempt to resolve them.

PRIVATE JUDGING

Process authorized in a few states (including California) whereby at the parties request a court can refer a case to a neutral of the parties choosing who will hear and decide the case. Normal rules of pleading, evidence, and discovery apply and the decision can be appealed on the record to the public courts as if it were decided in a public court

Ombudsman A neutral or impartial manager within an

organization who may provide informal and confidential assistance to managers and employees in resolving work-related concerns.

Office is located outside ordinary line management structures.

Med ARB Neutral is initially authorized to mediate a

dispute and if the parties fail to negotiate a resolution is thereafter authorized to decide the dispute or any undecided issues. Abbreviation of terms mediation and arbitration.

SUMMARY JURY TRIAL

A non-binding abbreviated trial by mock jurors chosen from an actual or simulated the jury pool.

A judge or magistrate may preside. Principals with authority to settle the case

attend. A resulting advisory jury verdict is intended to

provide the starting point for settlement negotiations.

MINI-TRIAL

A private, voluntary, informal form of dispute resolution in which attorneys for each disputant make a brief presentation of his or her best case before officials for each side who have authority to settle.

Usually, a neutral, third party advisor is present at the hearing.

Following the attorneys' presentations, the principals attempt to settle the dispute.

The neutral third party may be asked to render a non‑binding advisory opinion regarding the dispute outcome if it were litigated.

THE COURTS

Authorized and funded by government to provide a neutral forum for the resolution of disputes between people and organizations

TYPES OF COURTS TRIAL COURTS

Presentation of evidence

Determination of applicable law

Application of decided facts to applicable law

TYPES OF COURTS Appellate Courts

Review of trial court record to ensure proper application of the law

Acceptance of facts offered in trial court

No evidence presented no jury present

California Supreme Court

TYPES OF COURTS TRIAL – ROLE OF JUDGE AND JURY

Jury finder of fact. Judge determiner of law and instructions to jury

APPELLATE – ROLE OF JUDGES Appellate Terms to know

Judicial review, brief, oral arguments, majority opinion, dissenting opinion, reversible error, reversal, remand, affirm, modify

Primary Trial Court

Trial Courts of Limited (Specific) Jurisdiction

United StatesSupreme Court

(Highest Appeals Court)

Lower Appeals Courts

U.S. District Courts

U.S. Bankruptcy

Courts

U.S. Tax Courts

Various Federal

Agencies

U.S. Court of International

Trade

U.S. Claims Court

U.S. Patent & Trademark

Office

Trial Courts of Limited (Specific) Jurisdiction

Three judges hear each case, brought up from

the District Courts.

Nine Justices; appointed for life; may refuse to hear a case; final authority

Click on any box below for a definition of the jurisdiction of that trial court.

U.S. Courts of Appeals (12

Circuits)

U.S. Court of Appeals for the Federal Circuit

Hears appeals from specialized trial courts.

The Federal Court System

Supreme Court

The California Court System

Courts of Appeal6 Districts

Superior CourtOne Court for each County

Alpine County 2 judgesLos Angeles County

8 Divisions at over 50 locations

7 justices-Appointed by Governor confirmed by Commission. Lawyer for 10 years

Serve for 12 year term. Thereafter elected for additional terms.

105 Judges. Same methods & qualifications as Supreme Court

Sit in 3 judge panels

Elected by County voters for 6 year terms. Vacancies appointed by governor. Lawyer for 10 years

8.5 million cases annually

ADVERSARY NATURE OF US COURTS AND US LEGAL SYSTEM

Burden is on the parties to begin the process and to bring information to the attention of court. Essential requirement of a moving party.

Court is a neutral arbiter.-Primarily a processing agent.

Self-interest of litigants is thought to insure adequacy of information for the finder of fact to use.

ADVERSARY NATURE OF US COURTS AND US LEGAL SYSTEM (CONTINUED)

Each party is independently responsible for presenting its case.

Competitors (litigants, parties, and advocates) are openly partial and biased for their side.

A premium is placed on advocacy skills, being able to articulate ideas clearly and presenting information in both written and oral form, to convince decision-makers of the merits of a cause.

ADVERSARY NATURE OF US COURTS AND US LEGAL SYSTEM (CONTINUED)

The counter system is an inquisitorial system. The judge investigates

the dispute, questions witnesses and independently seeks out

evidence. The attorney’s role is less critical to the administration of

justice.

Jurisdiction

From Latin Juris and Dico meaning, “I Speak By the Law.”

♦ When used in reference to the courts, the term refers to power and authority over a matter

JURISDICTION Subject matter jurisdiction

Jurisdiction of the cause

Also refers to geographical boundary of an independent government unit

Jurisdiction

Parties Subject Matter

In rem Personal Quasi in rem

Defendant resident

Long-arm statute

State Federal Concurrent

SUBJECT MATTER JURISDICTION

Power of the court to hear cases of a general class

Determinates

Dollar amount pled

Criminal action

Remedy requested

Nature of problem

The Litigation Process

Adversary System-remember The party seeking redress initiates a lawsuit

by filing a complaint, petition in equity or some form of motion

Initial Steps

Retention of counselPleading -- plaintiff

1. Complaint2. Summons3. Service of process (obtaining

jurisdiction)4. Reply if necessary

Pleading -- defendant1. Answer2. Demurrer or motion to dismiss3. Cross-complaint or Counter-claim

Complaint (simple) States jurisdiction information Recites facts giving rise to a legal claim Requests remedy

A Sample Complaint

IN THE UNITED STATES DISTRICT COURTFOR THE SOUTHERN DISTRICT OF NEW YORK

CIVIL NO. 9-1047

Cantwell Muckinfuss, PLAINTIFFvs. COMPLAINTKissy Angel, DEFENDANT

Comes now the Plaintiff and for his cause of action against the defendant alleges and states as follows:

1. This action is between plaintiff, who is a resident of the state of California and defendant who is a resident of the state of New York. There is diversity of citizenship between parties.

Sample Complaint continued2. The amount in controversy, exclusive of interest and costs, exceeds the sum of $75,000.

3. On September 10th, 2002 plaintiff, Cantwell Muckinfuss, was exercising good driving habits and reasonable care in driving his car through the intersection of Broadway and Pennsylvania Ave in New York City, New York. When defendant, Kissy Angel, negligently drove her vehicle through a red light at the intersection and collided with plaintiff’s vehicle.

Sample Complaint continued

4. As a result of the collision plaintiff suffered severe physical injury, preventing him from working, and causing property damage to his car. He incurred costs including: $85,000 in medical bills, $25,000 in lost wages, and $9,000 in automobile repairs. Plaintiff demands judgment against the defendant for the sum of $119,000 plus interest at the maximum legal rate and the cost of this action.

BY [S]____________ROSIE F. RAGBIT

ATTORNEY FOR PLAINTIFF100 MAIN STREET

NEW YORK, NEW YORK

Mid-Process of Civil LitigationDiscovery

The process of gathering evidence on the case

Purpose of Discovery Educate each party Eliminate surprise Promote settlement

What reason for each purpose?

What are the negatives if any regarding discovery?

Mid-Process of Civil LitigationMotions

Judgment on the Pleadings

Motion to Dismiss

Summary Judgment

Self-explanatory

Can be made at any time after initial pleadings.

After discovery when there are no essential facts in dispute

Mid-Process of Civil LitigationDiscovery

Deposition: Questioning of Parties and witnesses under oath

Interrogatories: Written questions to apposing party requesting written answers

Motion to Produce: Request for documents and things

Request for Admission: Request of opposing party to agree on certain facts

Discovery Purposes of Discovery Efficiency:

Educate each party Promote settlement

Fairness: Eliminate surprise

What is the role of the Judge in the Trial? Rule on matters of law Keep order in the trial Insure a fair trial

What is the role of the Jury in the Trial? Is it possible there will be no jury? How does that change a trial?

Jury Selection VOIR DIRE Challenge for Cause

Peremptory Challenges

Jury Decision: BURDEN OF PROOF

• Moving party and

degree of belief

• Who has burden?

• Nature of the burden?

Preponderance of the evidence

Clear and Convincing Beyond a reasonable

doubt

Jury Decision: Agreement• State

• 34 states require less

than unanimous in civil

cases

• California ¾ or 9

Federal Unanimous verdict

usually required

PRESENTATION OF CASE RULES OF

EVIDENCE Relevance Hearsay Best evidence

TYPES OF EVIDENCE Direct Circumstantial Opinion Expert Presumptions

Trial Motions Directed Verdict:

At close of Plaintiff’s case when Plaintiff has presented no credible evidence supporting claim

PROCESS OF A CIVIL DISPUTE THROUGH THE COURTS

Verdict & Judgment

Post trial1. Motions

A. Directed verdict--before verdict

B. Judgment not withstanding the verdict-after verdict

C. New trial

2. Appeal.

3. Collection.A. Writ of executionB. Order of examinationC. Garnishment