As I sit in a mediation seminar and consider the wide variety of Alternative Dispute Resolution options, I wonder where has all the litigation gone. Don’t get me wrong, Alternative Dispute Resolution is great for many cases. Not only does it save significant legal fees and costs, it typically is a shorter, less destructive process that allows for creative solutions that both parties can feel they had input into. However, sometimes compromising or splitting the difference is not the right solution.
In financial meditation, there is often a push to compromise or split the difference in values. While this may be a good solution in situations where the values are either straight forward, or not that different, it may not be a good solution in situations where the valuation issue is complex and open to widely disparate results. For example, in a business valuation case where two competing experts are millions of dollars apart, splitting the difference in values is not always a fair or correct resolution, especially when one of the experts has completed a thorough evaluation using a valid methodology and the other expert simply has not performed a correct analysis. With all of the benefits of mediation, as mentioned above, we are seeing more cases where there is a large disparity in home values, business values and other types of asset valuations. In those instances, if the parties know they intend to go to mediation, there may be an incentive to have valuation reports prepared with extreme positions knowing that the parties will eventually be forced to compromise their position and the experts are not held truly accountable for their report because they are not subject to cross examination nor do they ever see the inside of a courtroom.
In appropriate cases, Alternative Dispute Resolution is a great option. In weighing your choices as to how best to proceed for your case, however, make sure that the issues in your case are appropriate for this type of dispute resolution. If you are unsure about whether your case is a good one for this process, discuss the issues with your lawyer before making the choice to go to Alternate Dispute Resolution. A good lawyer will advise you as to the benefits and downfalls so that you can make an educated choice, after weighing all necessary factors.