ALTERNATIVE DISPUTE RESOLUTION

by:
D. Wesley Newhouse
Newhouse, Prophater, Letcher & Moots, LLC
Tel: (614) 255-5441

I. ARBITRATION

A. What is Arbitration?
Arbitration is the submission of a dispute to a person or a panel of persons
who have the contractual or statutory authority to hear evidence and make
final decisions.

B. When does Arbitration happen?

1. Arbitration occurs when there is a contract, signed in
   advance, requiring that disputes be submitted to Arbitration.
   • The general conditions for design/build sole
     contracts require arbitration.
     See AIA A141 (2004), §A.4.4.1.
   • Arbitration is also required in the general conditions
     for construction contracts, AIA 201 (1997), §4.6.1.
     
2. Parties can also agree after a dispute has arisen to submit
   the dispute to arbitration.

C. Arbitration is mandatory.

1. Ohio law mandates that disputes be arbitrated if there is an
   Arbitration Agreement O.R.C. §2711.03.
   
   
2. Federal law also mandates submission of disputes to
   arbitration when there is such an agreement. 9 U.S.C.
   §§2, 3

D. Finality

1. Absent corruption, fraud, misconduct of the arbitrator, or an
   arbitrator exceeding his authority, the courts will enforce the
   decisions of arbitrators. O.R.C. §2711.10,12; 9 U.S.C. §10.

E. Picking an Arbitrator

1. The contract usually addresses this by:
   • Referring to rules of an arbitration organization such
     as the American Arbitration Association. See AIA
     A141 (2004), §A.4.4.1; AIA 201 (1997), §4.6.2.
   • By describing the selection process.
     
     
2. If the contract does not address the selection of an arbitrator,
   a court will appoint an arbitrator. O.R.C. §2711.04; 9 U.S.C. §5.
   
   
3. What makes a good Arbitrator?
   • Experience. The arbitrator should be experienced
     both in the business of the parties and in serving as
     an arbitrator.
   • Objectivity. There should be no obvious bias as a
     consequence of the arbitrator’s work experience or
     stated views.
   • Attentive and Conscientious.
   • Availability. The arbitrator should live in the locale
     of the arbitration and should be available during the
     work day to conduct conferences with the parties.
   • Reasonable rates.
     
     

F. Discovery

1. Exchange of records. Usually, the parties agree to the
   exchange of records in advance of the arbitration hearing.
   
   
2. Depositions. Parties usually agree to produce witnesses,
   and depositions are limited in number and scope by
   agreement. The arbitrator can issue subpoenas to compel
   testimony, and the court will compel compliance with the
   arbitrator’s subpoena. See O.R.C. §2711.06; 9 U.S.C. §7.
   
   
3. Expert witnesses. The parties usually exchange the
   credentials and reports of the experts. Sometimes, the
   parties take depositions of the experts.

G. Hearing

1. Keep it short!
   • Organize the documents in advance by marking
     them as exhibits, tabbing them, putting them in
     notebooks and providing an index.
   • Prepare charts and summaries that illustrate
     complex points and consolidate voluminous
     materials.
   • Dispense with evidence and arguments that are not
     central to the theme of your case.
     
     
2. Select a comfortable, neutral site for the arbitration.
   
   
3. Agree upon a schedule of witnesses, especially if some must
   travel from out of town.
   
4. Respect the arbitrator’s time constraints.

H. Appeal

1. Unless there is corruption or misconduct, arbitration awards
   are final and cannot be appealed. O.R.C. §2711.09; 9
   U.S.C. §9.
   
   
2. Time Limits. A motion to vacate, modify or correct an
   arbitration award must be made within three months of
   receipt of the arbitrator’s decision. O.R.C. §2711.13.

II. MEDIATION

A. What is it?
Mediation is a supervised negotiation of a dispute. A neutral third party is
retained by the parties to facilitate the discussion.

B. How is Mediation Different from Arbitration?

1. The mediator makes no judgments or rulings. The objective
   of mediation is agreement, not judgment.
2. There is no formal presentation of evidence.
3. Participation is voluntary.

C. When are there mediations?

1. If the project is subject to AIA contract documents, a dispute
   must be submitted to mediation before the parties can
   proceed to arbitration. AIA A141 (2004), §A.4.3.1; AIA 201
   (1997), §4.5.1. Even though parties are compelled to submit
   a dispute to mediation, they are not required to come to an
   agreement.
   
   
2. At any time, the parties can agree to mediate. Again, the
   agreement to mediate does not create an obligation to
   accept resolution of the case if the proposed resolution is
   unacceptable with one or more of the parties.
   
   
3. Judges sometimes order parties to participate in mediation.
   Again, there is no obligation on the part of the parties to
   arrive at an agreement.

D. Confidentiality
Communications made during the course of a mediation are privileged,
and the law prohibits calling mediators as witnesses. O.R. C. §2710.03.

E. How much does mediation cost?
The parties have to pay the mediator. Mediators in central Ohio charge
between $150 to $300 per hour. Ordinarily, the parties agree to split the
cost of the mediator. Most mediations last a half a day to a day.

F. Does it work?
Mediation is remarkably effective. A skilled mediator can communicate,
often more effectively than the lawyers, the weaknesses of the parties’
cases. The parties are often more inclined to acknowledge that resolution
is the better course when an experienced and skilled mediator helps them
see this.