Settling Without a Trial – California’s Alternative Dispute Resolution Methods

Settlement AgreementIn Unlimited Civil Cases – or those involving more than $25,000 – California law generally requires that both parties make an honest effort to resolve their legal dispute with alternative forms of dispute resolution, before finding themselves involved in costly business litigation and an unattractive trial.

This is known as Local Court Civil Rule 1E. It’s predominantly full of legalese but the underlying point is that in California cases where large investments or considerable sums of money are involved, parties to the matter will be required to attend and cooperate in either a Settlement Conference, Arbitration, Mediation or a combination thereof, prior to a trial date being set. If all goes well, you and the opposing party will come to a fair and equitable resolution and costly litigation can be avoided altogether.

Not only does this help relieve some of the excessive buildup of business disputes being heard in courts today, but also gives you and the opposing party an opportunity to find a win-win solution for everyone involved. The alternative is to wait months – sometimes even years – for a trial date. Then, when the big day finally arrives, you’re essentially throwing yourselves at the mercy of the court, facing an irreversible judge’s ruling that will ultimately result in one party winning and one party losing. Even with the best of business litigation attorneys on your side this is not a situation you want your company to be in at the end of the day.

So, settling out of court can not only salvage valuable business relationships and reputations, but also eliminate any lasting and negative effects that an ugly trial may have on your company; not to mention the legal fees you can save by settling out of court.

If you’re in the midst of an escalating business dispute, don’t rush off to fight for your day in court. You may have more favorable options that could save your corporation quite a bit of time, money and stress. Here are some basic steps to try and avoid business litigation by finding a legally sound and responsible alternative:

First of all, you should never tackle these types of issues on your own. If you don’t have in-house counsel, seek the advice of an experienced business litigation attorney who understands that not all legal arguments need to end up in front of a judge and jury. Sometimes the best approach to resolving a legal dispute is to start with a mediated conversation designed to address each element of every legal issue, one-by-one, in order to help guide both parties to a responsible and impartial solution. Judicial intervention, then, need only be introduced for the elements that can’t be resolved without outside involvement.

Once you’ve consulted with an attorney, you’ll likely have one of two primary prerequisites to litigation; either request an Early Settlement Conference or attend Arbitration/Mediation. Your attorney can help you to decide which is the most suitable choice for your distinct situation.

An Early Settlement Conference is a voluntary meeting between you, the disputing party and a ‘Neutral.’ A Neutral is typically a very experienced attorney who listens to your dispute as a neutral 3rd party and tries to guide the discussion towards a fair resolution. The Neutral does not represent any party and is not there to give legal advice. They serve to help keep the conversation constructive and diplomatic so that both sides continue to benefit from it. Ideally, this will result in you and the contesting party coming to a solution together. To make it official, the new agreement will be put in writing.

Additionally, Neutral Evaluation, Mediation and Judicial Arbitration are just a few different forms of dispute resolution acceptable under California law. As with a Settlement Conference, any of these forms of ADR should be addressed with the advice of an experienced California business attorney. There is a strategy to approaching ADR and without it you may put be putting your investments and legal goals at risk.

If you’re facing a heated business dispute, don’t get any further in without consulting The Law Offices of Tony T. Liu about your options. Our experienced staff and effective strategies will help to reduce your chances of going to trial, while still preparing the best litigation approach possible just to be safe.