Some scholars contend the United States is becoming increasingly more litigious. Other scholars believe Americans file no more lawsuits than they did in decades past, but instead contend the perception of increased litigation in the United States is fueled by very large, very well-publicized jury awards to plaintiffs. Consider that roughly only 1% of civil cases filed eventually go to trial. Consider also the other 99% of cases reach resolution through alternative dispute resolution, dismissal by courts, or end for other reasons (i.e. lack of funds, public perception, or newly discovered facts).

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Each week you are expected to come to class prepared to participate in the discussion by reading the assigned chapters and completing the required collaboration assignment. Please review the rubric for the grading requirements for weekly collaboration points.

undefinedModule 01: Collaboration Assignment

undefinedSome scholars contend the United States is becoming increasingly more litigious. Other scholars believe Americans file no more lawsuits than they did in decades past, but instead contend the perception of increased litigation in the United States is fueled by very large, very well-publicized jury awards to plaintiffs. Consider that roughly only 1% of civil cases filed eventually go to trial. Consider also the other 99% of cases reach resolution through alternative dispute resolution, dismissal by courts, or end for other reasons (i.e. lack of funds, public perception, or newly discovered facts).

undefinedHypothesize that you are providing advice to a company (as a manager, owner, or valued employee) that is considering whether to file a lawsuit against or has been sued by another company, customer, or employee. What factors would you evaluate in deciding whether to file, settle, defend, or otherwise resolve a lawsuit? Please give thought to both sides of the coin: as a company considering whether to bring a lawsuit and as a company anticipating defense of a lawsuit.

undefinedThe goal of this week’s discussion is to better understand and deeply analyze the benefits and drawbacks of the legal system and dispute resolution, and their impacts on businesses and business relationships.

 

UNFORMATTED ATTACHMENT PREVIEW

Marianne M. Jennings BUSINESS Its Legal, Ethical, and Global Environment 11th Ed. Chapter 4 Managing Disputes: ADR and Litigation Strategies ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Types of ADR • Arbitration − Oldest Form of ADR – Parties submit grievances and evidence to a third party expert in an informal setting – American Arbitration Association provides many arbitrators and rules ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-1 Types of ADR • Arbitration Advantages – Less formality – Handled privately – Expert handles the cases – Speed was once an advantage, but tends to move as slowly as court cases now ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-2 Types of ADR • Arbitration Disadvantages – Arbitrator may not have legal training and may not understand the significance of legal points – Rules of evidence do not apply – Expense and complexity has increased – Cost has increased ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-3 Federal Arbitration Act • Passed to stop judicial interference with arbitration • Courts now rarely interfere with arbitration clauses in consumer contracts ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-4 Federal Arbitration Act • Courts now rarely interfere with arbitration decisions • CFPB has proposed eliminating arbitration requirement for consumer credit contract ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-5 Types of ADR • Case 4.1 College Park Pentecostal Holiness Church v. General Steel Corp. (2012) – What was the basis for setting aside the arbitration clause? – How binding is arbitration? – Could the decision have been affected by the fact that there was a church involved? ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-6 Types of ADR • Arbitration Procedures – Parties agree to submit to arbitration – American Arbitration Association (AAA) can handle the proceedings for a fee – Demand for arbitration is filed – Arbitrator is selected ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-7 Types of ADR • Mediation – Parties use a go-between to negotiate and communicate • Used in international transactions • Mediator can offer suggestions for resolution • Not binding • MedArb – Recent creation in which arbitrator first attempt to mediate settlement – If unsuccessfully the case goes to arbitration ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-8 Types of ADR • Minitrial – Small-scale trial where parties present case to a judge with experience in the field or to a neutral advisor • Advisor or judge makes decision • Can motivate parties to resolve differences even if the results are not binding ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-9 Types of ADR • Rent-a-Judge – Trial held in commercial as opposed to a public court • Pay fees for courtroom and judge • Example: “The People’s Court” TV show • Summary Jury Trials – Gives parties an idea about jury’s perceptions – Used after discovery is complete ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-10 Types of ADR • Early Neutral Evaluation – Consultant or volunteer gives parties an assessment of the position • Generally used prior to discovery • Saves expenses if parties settle following the evaluation • Peer Review – Review of Management’s action against employee by a group of peer – employees – Reduces litigation cost ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-11 International ADR • International Chamber of Commerce – A private organization that handles 250 arbitration cases each year – Has used arbitration since 1922 ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-12 International ADR • Centre for Settlement of Investment Disputes (ICSID) – An international arbitral for investors – Investment contracts can provide for arbitration by ICSID • Parties Free to Choose Which Courts Will Hear Their Disputes – Party autonomy – U.S. courts are a popular choice ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-13 Litigation vs. ADR Technical discovery rules Open lines of communication Judicial constraints of Parties can agree to precedent virtually anything Remedies limited Creative remedies Docket backlog Parties set time line Public proceeding Private Control by lawyers Control by parties ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-14 Litigation Expensive Strict procedures and timing Judge and juries unknown Judicial enforcement ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. vs. ADR Less expensive (some changes here) Flexible Parties select Enforcement by good faith 4-15 The Trial Process ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-16 When You Are in Litigation… • People Begin Civil Lawsuits – System does not do it for them • Based on a claim of right • Lawsuits are efforts of individuals to enforce their rights ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-17 When You Are in Litigation… • Step 1 − Filing a Complaint or Petition – Complaint is general statement of claim • Must describe actions that led to claim of violation • Must establish jurisdiction and venue of court in which it is filed • Class actions are often filed against businesses ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-18 When You Are in Litigation… • Step 2 − Service of Process – Complaint or petition and summons served on defendant – Summons explains to defendant his/her rights • Where to defend • How long to defend • The effect of not defending the suit – Delivered by an officer of the court or by licensed private process servers • In exceptional circumstances, service is accomplished by publication ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-19 When You Are in Litigation… • Step 3 − The Answer – Content of answer • Defendant can admit allegations in complaint are true • Defendant can deny allegations in complaint • Defendant can counterclaim − effect is the defendant is also suing plaintiff for damages ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-20 When You Are in Litigation… • Step 3 − The Answer – Failure to file an answer within the statutory time period is a default • Time limits for filing answers are typically twenty to thirty days • Like a forfeit in sports − plaintiff wins because the defendant fails to show up ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-21 When You Are in Litigation… • Step 4 − Ending a Suit Through Motions – Motion for judgment on the pleadings • Even if everything the plaintiff said in the complaint were true, there is no cause for action • If court grants motion, the case is over at the trial court level (appeal is possible) ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-22 When You Are in Litigation… • Step 5 − Pre Trial Motions – Motion for summary judgment • Appropriate in cases where there are no factual issues • Used to resolve questions of law when the parties agree on the facts ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-23 When You Are in Litigation… • Step 6 − Discovery – Forms of discovery to supplement evidence released • Requests for admissions − request from one party to another for the admission of facts so that proof requested at trial is limited • Interrogatories − written questions submitted to opposition • Depositions − statements of parties or witnesses taken under oath in an informal setting • Request for mental or physical examination or for inspection ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-24 When You Are in Litigation… • Step 6 − Discovery – Requests for production: documents, physical evidence – Only relevant, non-privileged information is discoverable – No: • Work product • Attorney/client privilege • Husband/wife privilege ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-25 When You Are in Litigation… • Case 4.2 Pulte Home Corp. v. Simerly (2013) – Discuss what evidence was at issue. – Explain what happened with the evidence and who did it. – What should managers learn from this case and what should they do when lawyers are obtaining documents. ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-26 When You Are in Litigation… • Step 7 − The Trial – Jury trial • Required in cases where damages over $20 are claimed (unless waived) • Absolute right to jury trial is only in criminal cases • Jurors selected from voting or drivers’ license lists – Voir dire • Used to narrow jurors for panel • Ask questions about their knowledge of the case, level of education, background, etc. ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-27 When You Are in Litigation… • Step 7 − The Trial – Voir dire • Can be challenged for cause − incapable of making an impartial decision when they know parties, when they were involved with the case • Peremptory challenge − limited number of challenges used by attorneys to remove potential jurors with whom they are uncomfortable • However, may not be based on race or sex ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-28 When You Are in Litigation… • Step 7 − The Trial – Plaintiff’s case • Presents witnesses − direct examination • Defendant can cross-examine plaintiffs’ witnesses – Opening Statement • Gives summary of the case and witnesses and how they fit together to prove necessary elements ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-29 When You Are in Litigation… • Step 7 − The Trial – Post-plaintiff’s case motion − motion for a directed verdict • Plaintiff must prove all elements − called a prima facie case • Failure to prove all elements entitles defendant to a directed verdict • Made with jury excused ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-30 When You Are in Litigation… • Step 7 − The Trial – Defendant’s case • Presents witnesses − direct examination • Plaintiff can cross-examine defendant’s witnesses – Types of evidence • • • • • Witnesses’ testimony Documents Photographs Tangible items Hearsay − can be admissible to establish facts other than the truth of the matter asserted ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 4-31 When You Are in Litigation… • Step 7 − The Trial – Closing arguments • Each side summarizes case presented – Jury instructions • Judge explains law to jurors • Law is written in form for jurors to apply • Lawyers have input on instructions ©2017 Cengage Learning®. May not be scanned, copied or duplicated or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classr …
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