Running head: TRADITIONAL AND NO TRADITIONAL LITIGATION 1 Traditional and nontraditional litigation LAW531 – Business law University of Phoenix
TRADITIONAL AND NONTRADITIONAL LITIGATION 2 Traditional litigation system and Alternative dispute resolution A number of legal ways are available to organizations to solve disputes without the needfor a formal and traditional process of litigation. Various forms of mediation, private judging,mini-trials, and moderated settlement conferences are available to companies, unable toindependently to resolve their disputes but who wish to avoid the expense and delay of the fulllitigation process (Sherman, 2011). Organizations prefer alternative dispute resolution to traditional litigation for differentreasons; with alternative dispute resolution, the organization information, trade secrets, and otherconfidential information are not subject to a judicial process, in which any person, media, ororganization would have the right of access. Access to the information would give thecompetitors some advantage because they would be able to misappropriate use of theconfidential information. A traditional litigation process often results in public disclosure oforganizations information and ADR procedures would allow the parties to resolve the disputesbut better protecting confidential information. The traditional litigation processes do not allow achieving satisfactory negotiated results,and the free access to the confidential information can result in high monetary costs, which canaffect the organizations bottom line. Alternative dispute resolution give the litigants theopportunity to avoid many problems inherent in dealing with traditional litigation process whileallowing the parties to resolve the differences fairly, and can provide a cost-efficient alternativeto the traditional legal system, which has high costs and delays. Advantages of ADR over traditional litigation processes Each type of alternative dispute resolution offers different advantages and disadvantages,and would make the process far more appropriate for resolving a particular dispute than another:
TRADITIONAL AND NONTRADITIONAL LITIGATION 3Faster Resolution ADR reduces delays in resolving legal claims.Lower cost Litigation processes are costly; even small litigation disputes can result into costly legalbattles. Litigation typically takes long time, during which management must deal with manyexpensive tasks, resulting in time taken away from the regular duties and no focus onmanagement activities.Quick resolution ADR processes have realistic alternatives to resolve disputes expeditiously. Whereas atraditional dispute may take more than a year to resolve, ADR can take just few months.Confidentiality Described in the top, traditional legal processes are open to the public and media, theserecords can result into permanent damage to the organization’s reputation. ADR is a privateconfidential process, the parties’ final agreement can specify that neither party will disclosedetails about the dispute or its resolution (American Management Association, 2011).Fairness ADR is an objective, reasonable, and even-handed process; this does not mean satisfyingeveryone. In ADR processes each party has an opportunity to participate and make unforceddecisions.Flexible remedies and choice of decision maker In ADR, the parties are not limited to what a jury may award, they are usually free toselect the mechanism, and determine the amount of information that needs to be exchanged. The
TRADITIONAL AND NONTRADITIONAL LITIGATION 4parties can select a neutral decision-maker with specific experience or expertise, and agree on aformat for the procedure.Preservation of relationships ADR process allow the parties to work together and find a friendly solution, while atraditional litigation process the process can result into a hostility level, altering the relationship. Reducing risk involved with litigation processes To reduce exposure to risks involved with litigations, management must remaincognizant of its business environment’s rules, regulations, and laws that affect the businessmodel. The organization should merge external influences with the ethical code of conduct, andeducating workers of proper processes; these decisions would help to minimize risks that canresult into costly litigation. Training programs and internal control processes would help toidentify, limit, and manage litigation exposure. Management should seek legal advice andassistance to reduce the risk of potential claims becoming actively litigated claims. To mitigate the impact of litigation processes, management should increase capital tocover potential judgments or settlements, and maintain adequate and cost-effective insurancecoverage. When earnings or capital could be negatively affected, management should take steps tomitigate, prepare, and limit the effects of that potential reduction in capital or earnings on theoperations of the organization (Comptroller, 2000).
TRADITIONAL AND NONTRADITIONAL LITIGATION 5 ReferencesAmerican Management Association (AMA). (2011). What is ADR. Retrieved from http://www.flexstudy.comComptroller. (2000). Litigation and Other Legal Matters. Retrieved from http://www.occ.treas.govSherman, A. (2011). Alternatives to Litigation. Retrieved from http://www.entrepreneurship.org