COVID-19 has considerably slowed the resolution of pending court cases and exacerbated many courts’ already significant backlog of cases. Even as U.S. courts re-open and resume in-person proceedings, delays due to the pandemic and prioritization of criminal cases have led to long wait times, especially for commercial litigation. There is a 13-month expected delay for commercial case resolutions on average across all federal circuits.
There are faster routes to resolution once a dispute arises. Parties can bypass the court and submit their disputes to an alternative dispute resolution (ADR) process to resolve their disputes and return their focus to the business.
Parties can file a submission agreement with their preferred dispute resolution body, allowing them to submit their dispute to arbitration or mediation to take advantage of all the benefits that the ADR process offers.
ADR Benefits
Parties can count on faster speed (and usually lower cost) when using alternative dispute resolution to resolve disputes. Speed to reach a decision is often critical to continue business planning. The average duration for a full-length commercial arbitration case is 14.4 months. The median time from filing to trial in a civil case in a U.S. District Court is 28.3 months if there is no appeal.
Arbitration facilitates resolution on a faster track. Most institutions have an option for expedited arbitration proceedings, which contemplate a 90–180 day proceeding.
Plus, party control is a tenet of ADR, allowing the parties to craft the process to fit their needs. They may select knowledgeable neutrals with subject-matter expertise. Parties get greater confidentiality and privacy for proprietary business information, trade secrets, and intellectual property.
Arbitration offers the certainty of resolution Awards are generally final and binding. Finally, parties have greater flexibility in ADR processes, which allows them to proceed on their schedules, rather than a court’s, and has the option to conduct hearings virtually.
Submission Agreements
Parties assume that if they have not elected for arbitration or mediation in the contract before a dispute arises, they are left with litigation as the only option. This is not true. Parties can submit their dispute to ADR at any time after the dispute arises, even if the dispute is already in court.
The parties agree to submit the specific dispute to ADR in the submission agreement. Parties need to agree to an ADR process for resolving their dispute, whether it is arbitration, mediation, or both.
Some ADR providers provide a form that the parties may fill out and submit as a case filing. In this form, parties can choose the specific rules that should govern the resolution of the dispute. They can also specify the name of the neutral (mediator or arbitrator) they wish to help resolve the dispute or the process by which the neutral should be selected. The form also provides the required language to submit parties to binding arbitration if that is the choice.
The form is not the only option available. They could draft a more detailed submission agreement. There are frequently model clauses that provide standard language and cover various considerations.