Resolving liability claims out of the courtroom

On Behalf of | Feb 17, 2022 | Insurance Coverage Defense |

When large retailers in New York or franchisors are facing a lawsuit, it can be particularly draining on the company, especially as the bad publicity drives customers away. Consumer relations may sour when a client makes claims of misrepresentation or false advertising, privacy violations, defective products, or even lawsuits from injuries that allegedly occurred on the premises.

Fortunately, the increasing availability and use of Alternative Dispute Resolution (ADR) methods to resolve disputes in recent years have provided viable alternatives to businesses to the time-consuming and costly court system. Reaching an advantageous settlement out of court also protects both sides from the negative glare of public scrutiny, as ADR processes are not a part of the public record.

ADR services in New York

Three common ADR processes for resolving commercial disputes in New York are arbitration, mediation and neutral evaluation. While all three remain out of the courtroom, there are some nuanced differences:

  • Arbitration is in essence a simplified form of a trial that includes limited discovery or rules of evidence, and it is appropriate where the disputing parties wish to have an impartial third party present. The arbitrator or panel of arbitrators serve the function of a judge, and often have expertise in the industry of the parties. If binding, the parties agree to accept the final decision and have no right to appeal. If it is nonbinding, the parties may reject the decision and go to trial.
  • Mediation is less formal than arbitration and has greater flexibility in its format. It involves the selection of an agreed upon neutral third party trained in mediation methods who will facilitate discussions with the goal of conflict resolution. By promoting compromise, the mediator motivates the parties to come to their own resolutions. The mediator facilitates but does not make a final outcome, and mediation is nonbinding.
  • Neutral evaluation uses the skills of a neutral evaluator who is an expert in the topic that is the source of conflict between both sides. Both parties present short arguments, which the neutral evaluator assesses in order to give the parties an opinion of how he or she thinks that litigation would play out. This helps both parties come to a decision on the best path forward when attempting to settle out of court.

Choosing a skilled ADR facilitator

ADR processes require a neutral third party to negotiate or make a decision. They must listen to grievances as well as the desired outcomes of each party in order to come to a resolution that benefits all. Choosing a skilled facilitator with a proven track record is arguably the most important part of the ADR process, as this will give all parties confidence in a fair and unbiased outcome to the process.


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