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LJD. LAW, JUSTICE and Development week 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT November 14-17, 2011 Washington DC. LAW JUSTICE and DEVELOPMENT. Mediation vs. Arbitration vs. Litigation: Understanding the Basics. Susan D. Franck
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LJD LAW, JUSTICE and Development week 2011INNOVATION AND EMPOWERMENTFOR DEVELOPMENTNovember 14-17, 2011 Washington DC LAW JUSTICE and DEVELOPMENT
Mediation vs. Arbitration vs. Litigation:Understanding the Basics Susan D. Franck Associate Professor of Law, Washington & Lee University School of Law 15 November 2011 LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT
Evolution of International Commercial Dispute Resolution • Generation #1: • Gunboat Diplomacy • Diplomacy and “soft” negotiation • Generation #2: • Focus on legal rights • Judicialized dispute resolution (courts and arbitration) • Generation Next: • Thinking systematically about Appropriate Dispute Resolution (ADR) • Consider adjudicative (arbitration) and non-adjudicative options (mediation) • Selectively choose options to achieve maximum client objectives LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT
Types of Options to Consider in “Generation Next” • Negotiation • Mediation • Early Neutral Evaluation • Expert Determination • Fact Finding • Arbitration • Mixed Processes • Mediation-Arbitration • Arbitration-Mediation • Ombuds • National Courts LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT
Basic Definitions: Negotiation • Dialogue amongst interested parties. • Objective is to seek a common decision to achieve complimentary objectives in order to achieve gains to settle a dispute. • Different types of negotiation: • Adversarial • Interest Based LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT
Basic Definitions: Mediation • Mediation uses a neutral third party. • The mediator assists two or more parties to reach a voluntary, negotiated settlement of their differences, without prejudice to legal remedies. • The mediator uses various skills and techniques to help the parties choose to reach a settlement. • The mediator has no power to make a decision. • Facilitative Mediation (based upon the parties’ mutual interests) • Evaluative or Directive Mediation (based upon mediator’s professional opinion) LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT
Basic Definitions: Arbitration • Decision made by a neutral third party (1 or 3 specialist arbitrators). • Finally resolves a dispute using adjudicative capacity and applying facts to law. • Awards are immediately enforceable • Compare ICSID Conciliation = functional equivalent of non-binding arbitration LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT
Common Misconceptions about ADR • 1. ADR is non-binding determination of rights • False. ADR involves rights but is mainly based on the parties’ interests • 2. ADR is not suitable for civil law systems • False. Cost savings may be higher in common law systems where litigation is more expensive, but ADR is equally valid in all legal systems • 3. A good lawyer does not need ADR to settle a case • False.The good lawyers are the ones who recognize the advantages of ADR • 4. ADR is suitable only for small disputes, family law, etc. • False. There is no limit on the potential application of ADR • 5. ADR is suitable only for large companies • False. There is no limit on the potential application of ADR. • 6. One should avoid extending an offer to mediate if there is a chance the other side will not accept • False. On the contrary, a refusal to mediate may indicate a party’s lack of confidence in their case
Basic resources: ADR and International Investment • Definitions and Supporting Information on ADR: • http://investmentadr.wlu.edu/resources/page.asp?pageid=587 • Podcasts about international investment and ADR: • http://investmentadr.wlu.edu/Podcasts/ • Legal research guide for investment law and ADR: • http://investmentadr.wlu.edu/deptimages/Resources/Research%20Pathfinder.pdf LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT
Thank you! LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT