Meetings & Conventions: Planner's Portfolio December
The Law & the Planner
By Jonathan T. Howe,
ARBITRATION VS. MEDIATION
Before rushing to court, consider alternative means to
resolve a dispute
When a supplier or a planner fails to comply with the terms of a
contract, the reaction of the injured party often is to sue.
Litigation costs are huge, however, in both money and time. To
avoid court, first consider alternative forms of dispute
This general term means anything from informal mediation to
settlement conferences, formal mediation and arbitration. The
following definitions should help filter out the confusion.
FOR ARGUMENT’S SAKE
Mediation involves retaining an objective
individual as a go-between. The mediator hears and presents the
issues from one side to the other, trying to reach a settlement.
The mediator is not a judge, jury or arbitrator; rather he is a
facilitator who attempts to resolve the matter.
Even if you do end up in front of a judge, most federal and
state courts require that a mediation attempt take place first.
Bear in mind that mediation is nonbinding and also confidential. It
only becomes a resolution when the parties agree to a settlement.
Whatever you tell the mediator cannot be disclosed to the other
party without your permission. The discussions made during
mediation are not admissible in court. Mediation is voluntary.
In several major cases, I’ve had good luck with experienced
mediators. The process does take time, patience and the ability to
Resolutions reached by way of arbitration, on
the other hand, generally are binding and final. Arbitrations can
take place before a single person or a panel of three individuals
who make a decision on the case. With a panel, each party selects
an arbitrator, and the two chosen arbitrators then select a
Arbitrators and mediators generally are found through the
nonprofit American Arbitration Association (www.adr.org). There are,
however, other non- and for-profit organizations that provide the
Arbitration can be expensive. Initial fees must be paid up front
by the party seeking arbitration. The hiring party then must pay
the arbitrator(s) a daily fee plus costs, as well as attorneys’
fees. If the contract provides, the party found at fault might have
to reimburse these costs.
I believe major disputes, where damages would be in excess of
$100,000 or complicated legal issues are involved, should go to
court, where you have an opportunity for an appeal. For lesser
disputes, arbitration does work, but it’s not necessarily
IN THE CONTRACT
I usually insert a clause in contracts saying the parties first
will try to resolve their differences between themselves before
going to court or to binding arbitration.
Often, contracts include a clause requiring arbitration of
disputes in accordance with the Commercial Rules of Arbitration of
the American Arbitration Association.
Unfortunately, planners and suppliers often don’t know what
those rules require. Further, the rules do not cover the location
of the arbitration, the method or criteria (experience, background
in the meetings industry, etc.) by which arbitrators are selected.
Be sure to discuss with a knowledgeable attorney anything else you
might need to add to your arbitration clause to protect your
When representing those doing business abroad, I insert an
international arbitration clause in the contract to designate what
issues are subject to arbitration, how the arbitrator will be
chosen, which jurisdiction’s laws will apply and where the
arbitration will be held. Also, you should delineate who will
handle the administration of the arbitration, such as the American
Arbitration Association or the International Chamber of
Howe, Esq., is a senior partner in the Chicago and
Washington, D.C., law firm of Howe & Hutton, Ltd., which
specializes in meetings, travel and hospitality law. Legal
questions can be e-mailed to him at email@example.com.
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