With some analysts predicting that business litigations will spawn billions of dollars in lawsuits because of service and product failures, businesses need alternatives to litigation, says Marc Pearl of the Information Technology Association of America, a nonprofit trade association of information technology professionals.
“Mediation needs to be encouraged, not litigation,” said Pearl, general counsel and senior vice president of government affairs for the association.
Alternative dispute resolution is a good strategy to address business disputes between businesses, Pearl said. The association, along with a national alternative dispute resolution provider, JAMS have developed a web site for organizations interesting in establishing a business strategy to deal with business disputes before any problems actually occur.
The free information on the web site, , is designed to assist companies to build alternative dispute resolution clauses into their current and future contracts with vendors, suppliers, customers, risk managers and others. If a dispute arises, it also helps businesses access ADR services.
“We are not looking at this in a post-litigation mentality, but we’re more concerned with how businesses can maintain their relationships,” said Pearl. “Most businesses, like marriages, don’t enter a relationship because they want to end up in court.” But sometimes, like a marriage, businesses need to enter into a kind of pre-nuptial agreement, particularly now with the uncertainty of business relationship failures, he said.
According to Pearl, businesses should first try to resolve any potential business litigation problems without any legal intervention, even by employing mediators.
If this fails, alternative dispute resolution is the next logical step, rather than litigation. “It is not in the best interest to businesses or the customers for a public lawsuit to occur,” Pearl said. “Mediation keep costs down, and it doesn’t push parties into opposite corners like a boxing match.”
While alternative dispute resolution is no guarantee that the dispute will not end up in court, Pearl said, about 80 percent of businesses that try alternative dispute resolution settle the dispute privately and amicably.
However, if all else fails, the businesses may have to take the lawsuit route. Pearl points out that the association does not advocate alternative dispute resolution with consumer problems with Y2K, only business-to-business relationships.
While alternative dispute resolution is a good way to deal with the potential burden of business lawsuits, Pearl admits that there is resistance. “ADR to lawyers is a lot like holistic medicine is to medical doctors. There’s a cultural impediment to go to ADR.”