– The American litigation process is different from systems in other industrialized nations.
– There are two principal court systems in the United States: the courts of the individual states and the federal courts of the United States.
– The state court system in Georgia is comprised of two courts of general jurisdiction handling most tort and contract claims and certain specialty courts, such as probate court and magistrate court.
– Federal courts have the power to decide cases or controversies arising under the U.S. Constitution or national laws and treaties and cases or controversies between or involving two different states or citizens of two different states.
– In cases over which the federal courts have jurisdiction based on diversity of citizenship, the substantive law of one of the states concerned will be applied but the federal court’s procedural rules will govern the litigation process itself. – Federal courts and state courts both have jurisdiction over certain legal matters.
– In Georgia, the types of state courts include Magistrate Court, State Court, and Superior Court.
– The litigation process typically begins with the filing of a complaint and serving it to the party being sued.
– Both federal and Georgia state courts follow the system of “notice pleading”, where the complaint only needs to state enough facts to put the party being sued on notice of the claims against them.
– The party being sued must respond to each fact or allegation in the complaint by admitting or denying them and stating any defenses.
– One important defense is the statute of limitations, which is the time allowed for bringing the claim.
– Sometimes a complaint may not support a cause of action, in which case the party being sued can file a motion to have the lawsuit dismissed. – The discovery process in the American judicial system allows each side to explore the facts possessed by the other party.
– The process includes written questions, document production, and depositions under oath.
– Depositions can be taken from anyone with knowledge of relevant facts, including non-parties and expert witnesses. – Adequate discovery is necessary to avoid surprises at trial and inform both sides of the facts.
– Most lawsuits are settled prior to trial because discovery informs parties of the strengths and weaknesses of their cases.
– Summary judgment may be requested if the totality of facts established during discovery refutes the claim of the adverse party.
– In the U.S., either party has the right to demand a jury trial in virtually every case.
– In a non-jury trial, the case is tried before a judge who makes findings of fact and law.
– In a jury trial, a pool of persons is selected at random from the community and then prospective jurors are questioned and removed to produce the jury that will decide the case. – Each party in a trial has the chance to make an opening and closing statement, present witnesses, and introduce documents as evidence.
– Pretrial discovery leads to few surprises at trial, but the jury’s or judge’s interpretation of witness testimony can be unpredictable.
– In a jury trial, all jurors must agree on a verdict, and the jury has wide latitude in deciding the facts. – The jury does not decide the law to be applied in a case.
– The judge decides what elements each side must prove to establish a claim or defense.
– The judge may direct the jury to enter a verdict against a party if the totality of the facts support the claim or defense of the opposing party.
– Appeals can be made to overturn verdicts or judgments of the trial court, including orders granting motions for summary judgment or directing verdicts.
– The primary purpose of appellate review is to correct errors of law made at the trial court level.
– Findings of fact made by the judge or jury will only be overturned on appeal if they are clearly erroneous.
– Errors in construction or application of legal precedent will be reviewed as if no decision had been previously rendered.
– Review by the highest court in a jurisdiction is discretionary and generally limited to questions of great importance to the public interest or necessary to a clarification of the law in that jurisdiction.
– Evidence may not be introduced at any appellate level; instead, the decision on appeal is based on the written record of the proceedings in the trial court and evidence introduced there. – ADR saves time and money by eliminating lengthy discovery and protracted appeals.
– It makes parties focus on the big picture early in the proceedings.
– ADR creates the possibility of a win-win result.
– It avoids the need to educate a judge or jury on complex matters in a new industry.
– ADR offers confidentiality and allows parties to settle their disputes in private.
– It allows ongoing business relationships to continue and permits mediation or arbitration on narrow issues.
– ADR gets business executives involved in the matter early, leading to quicker settlements.
– It provides extreme flexibility in structuring ADR proceedings. – ADR may not be appropriate for cases involving substantial legal issues, credibility of witnesses, significant financial discrepancies between parties, multiple parties, or emotional issues.
– Common alternative dispute resolution techniques include negotiation, where it is important for the negotiator to not have a stake in the dispute, and mediation, which involves a neutral facilitator who helps the parties reach a common ground without imposing a settlement. 1. Mediation is estimated to resolve 80 to 90 percent of all disputes submitted to the process.
2. Evaluative mediation involves the mediator providing an evaluation of the case and predicting the likely outcome at trial, which some experts disagree on the effectiveness of.
3. Nonbinding arbitration involves attorneys presenting the case to passive arbitrators, with the decision being rendered and potentially becoming the basis for further negotiations or mediation.
4. Binding arbitration involves attorneys presenting arguments to a panel of arbitrators, where each party often selects one arbitrator, but this method has been criticized for not resulting in three neutrals. 1. In binding arbitration, evidence is presented without regard for the rules of evidence and the admissibility of evidence is controlled by the arbitrator.
2. The award is binding and seldom accompanied by an explanation or opinion. Appeals are generally prohibited, but parties may contract for the right to appeal.
3. Administered arbitration, conducted under the rules and guidance of an institution, is advisable because it employs time-tested rules, employs quality arbitrators, and offers options throughout the arbitration process.
4. “Baseball” arbitration allows parties to submit proposed awards before the hearing, and the panel chooses which award is most appropriate and fair, without the ability to create something between the two proposed awards. – Med-Arb combines mediation and arbitration, often with the same neutral facilitating both processes.
– A minitrial involves a formal presentation to high-level decision-makers from each party, with limited live witnesses and relaxed rules of evidence.
– A neutral factfinder, such as an expert in a nonlegal field, investigates and resolves factual issues that are important to the dispute, with the decision being binding or nonbinding as determined by the parties.
– In a summary jury trial, arguments are presented to a jury presided over by a judge or magistrate, leading to a nonbinding decision based on the presentations. – Summary jury trials are advantageous for cases heavy on facts and damages speculation, where the response of a typical jury can influence settlement.
– The structure of ADR can be altered during an ongoing dispute, such as negotiation hybrids that provide for discovery and mediation-arbitration hybrids for resolving ambiguous facts.
– Skillful drafting in arbitration agreements can eliminate uncertainty, and the switch from mediation to arbitration can be effective in the right circumstances. – Adding binding arbitration or neutral factfinding clauses to contracts can help prevent mediation breakdowns over valuation issues.
– Escalation clauses in contracts require parties to escalate negotiations to higher-level company officials before filing a lawsuit, encouraging resolution by those without a personal stake.
– Cooling-off periods in contracts require parties to wait and attempt to settle disputes before filing a lawsuit, allowing for cooler heads to prevail and potentially facilitating settlement. – The “Least Favored Choice of Forum” clause aims to make it more difficult and costly for one party to sue the other by requiring the suing party to go to the other party’s home jurisdiction.
– The payment of costs/”Last Best Offer” provision allows a judge or arbitrator to award the winning party its costs and attorneys’ fees, discouraging the filing of marginal claims and potentially encouraging settlement of strong claims.
– Dispute avoidance techniques, such as partnering and review boards, are being used by companies to prevent disputes from arising and to resolve them before they escalate into litigation or ADR.
– Including an ADR clause in contracts helps solidify the use of ADR by establishing that the contracting parties will engage in arbitration, mediation, or attempt negotiation as a first step in resolving disputes. – Discovery may be permitted with limitations on dimensions to ensure the parties’ legitimate needs for information are met.
– Adjudicators may include retired judges, practicing attorneys, specialized experts, or general businessmen, and may be selected by mutual agreement or a third party.
– The adjudicator’s judgment may be final, with the force of law, and parties may have limited grounds for appeal.
– Formal rules of evidence may apply or be relaxed, and various forms of evidence may be permitted with a record kept.
– Deadlines and time limits for discovery cutoff and ADR adjudication will be established jointly by the parties or by the adjudicator. 1. If a dispute arises between the parties, they will first attempt to negotiate a resolution within 30 days of the initial meeting.
2. If negotiation is not successful, they will jointly appoint a neutral person to assist with the dispute, and the fees of the neutral will be shared equally by the parties.
3. The parties will then select or devise an alternative dispute resolution procedure and a time and place for the resolution to be held, with the decision being made by the neutral if the parties cannot agree within 20 days.
4. The parties agree to participate in good faith in the alternative dispute resolution process as designated by the neutral.
5. If the parties are not successful in resolving the dispute through the alternative dispute resolution, they may agree to submit the matter to binding arbitration, or either party may seek an adjudicated resolution through the appropriate court. – The parties must attempt to negotiate a resolution of the dispute within 30 days of the dispute arising.
– If no resolution is reached, the dispute must then be submitted to mediation, with the parties agreeing to bear the costs equally.
– The parties must jointly appoint a mediator within 20 days of the conclusion of the negotiation period.
– If the mediation is unsuccessful, the parties may agree to submit the matter to binding arbitration, seek adjudicated resolution through the appropriate court, or initiate litigation upon 10 days written notice to the other party.
– The parties are required to participate in good faith in the mediation and negotiations related thereto for a period of 30 days. – The initiating party must give written notice to the other party, describing the dispute and identifying an authorized individual with settlement authority.
– The responding party has 5 days to designate their own authorized individual.
– The authorized individuals must investigate and commence discussions within 30 days of the initiating party’s notice.
– If the dispute is not resolved within 30 days of discussions, it will be submitted to alternative dispute resolution (ADR).
– The parties have 10 days from the submission date to agree on a neutral person, or they can request a list of potential neutrals from a neutral services provider.
– Once a list of potential neutrals is received, the parties must independently rank the candidates, exchange rankings, and select the neutral with the highest combined ranking who is available to serve.
– The parties must designate a mutually convenient time and place for the ADR with the neutral, within 45 days after the neutral is selected. – Parties are expected to exchange information in a timely manner before the ADR.
– Both parties are to submit a written summary of their views on the matter in dispute to the neutral and to the other party one week prior to the ADR.
– Each party is allowed to bring additional persons to the ADR, with the number of additional persons needing to be agreed upon by the parties in advance with the assistance of the neutral if necessary.
– The conduct of the ADR will be determined by the parties in consultation with the neutral, with joint meetings and separate private caucuses with the parties.
– The neutral is authorized to provide their opinion on the probable outcome if the matter were to be litigated, and make recommendations for a possible settlement if requested by both parties. These opinions and recommendations are not binding on the parties. – The parties agree to participate in the ADR procedure to its conclusion and not to terminate negotiations concerning resolution of the matters in dispute until at least 10 days thereafter.
– Each party agrees not to commence a lawsuit or seek other remedies prior to the conclusion of the 10-day post-ADR negotiation period, except in certain circumstances.
– The fees of the neutral shall be shared equally by the parties, and the neutral shall be disqualified as a witness, consultant, expert, or counsel for either party with respect to the matters in dispute and any related matters.
– The ADR procedure is confidential and no stenographic, visual, or audio record shall be made. All conduct, statements, promises, offers, views and opinions are confidential and privileged. – The American Arbitration Association provides form ADR provisions for arbitration, negotiation, and mediation, along with specific clauses for international disputes, construction disputes, employment disputes, patent disputes, textile disputes, and financial disputes.
– Georgia law recognizes the concept of “joint employers” in the employment discrimination context and considers employees performing work with or for other companies as independent contractors, borrowed servants, or joint employees.
– Many employers are now including arbitration clauses in their job applications, employee handbooks, and employee contracts in an attempt to decrease litigation expenses and reduce exposure to uncertain jury awards. 1. Many potential jurors have a pro-labor mindset that favors terminated employees, and juries often rule in favor of employees in employment lawsuits, awarding large damage verdicts and punitive damages.
2. To mitigate these risks, many employers are turning toward mandatory arbitration provisions in employment contracts, handbooks, and job applications, requiring aggrieved non-union employees to waive their rights to a jury trial and privately arbitrate disputes.
3. The enforceability of mandatory arbitration clauses in employment contracts depends on certain procedural safeguards, with courts generally finding them to be enforceable as long as the employee’s agreement to arbitrate claims is knowing and voluntary, and the arbitration provision is prominently and clearly presented. – Any arbitration provision should be signed or initialed by both the employee and the employer to show their knowing and voluntary agreement.
– Some states, like Georgia, have specific requirements for an arbitration provision to be enforceable, such as having the employee and employer initial beside the provision.
– Courts have found that an arbitration clause must state that the employer will solely be responsible for the costs of the arbitration proceeding to be enforceable. – The appeals court erred in concluding that an order compelling arbitration and dismissing the lawsuit is a final decision with respect to arbitration appealable under 9 U.S.C. Section 16(a)(3)
– The appeals court erred in concluding that an arbitration provision that was silent on the issue of costs and fees was unenforceable under the Federal Arbitration Act because of the risk that plaintiffs might be required to bear unknown costs and fees in trying to vindicate their statutory rights. – The district court dismissed the case and ordered Randolph to submit to arbitration.
– The 11th Circuit reversed, finding the arbitration clause unenforceable due to high costs of arbitration.
– The Supreme Court will address the enforceability of arbitration provisions in consumer contracts.
– The arbitrator required Eastern Associated Coal Corp. to retain an employee who tested positive for marijuana.
– The second arbitrator weighed the company’s right to hire and discharge workers with the union’s claim about the employee’s employment history. – The arbitrator did not find just cause for Smith’s release.
– The district court held that the arbitrator did not exceed his authority in ordering Smith reinstated.
– The 4th Circuit Court of Appeals upheld the District Court and arbitrator’s decisions, stating that discharge is not mandated as punishment for employees who test positive for illegal drugs. – Circuit City had an arbitration agreement with Adams for settling employment-related disputes.
– Adams sued Circuit City for discrimination and harassment after leaving the company.
– The U.S. District Judge found the arbitration agreement enforceable, but the 9th Circuit Court of Appeals disagreed, stating that the Federal Arbitration Act does not apply to employment contracts.
– The appeals court ruled that the arbitration agreement was considered an employment contract and therefore not covered under the FAA. – The U.S. Supreme Court granted certiorari on May 22, 2000 to review whether the FAA applies to employment contracts and whether states retain their right to regulate arbitration agreements.
– Some major organizations offering ADR services include the American Arbitration Association, CPR Institute for Dispute Resolution, JAMS/Endispute, and Henning Mediation & Arbitration Service, Inc.
– Resources for ADR include employment watch publications, a corporate counsel’s primer on CD-Rom, and the Supreme Court docket review from Northwestern University Medill School of Journalism.
– Source: http://cnn.com/2000/LAW/11/06/Scotus.workerlawsuits.ap/index.html
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