July 2011 Archives

Blog #1 (Arbitration or the Court System; John Donaldson)

July 28, 2011

Welcome to my weekly blog. The first portion will be the legal portion; the second will be the baseball portion. Hope you enjoy.

Recently, I attended a national Health Care seminar where I was surprised to hear multiple health plan in house counsel express their preference for the court system over arbitration for the resolution of their business contractual disputes. In California at least, I believe that such a view would be in the distinct minority, particularly if your organization is the one being sued.

The decision almost always is made at the time of contracting, although it also can be made after a court proceeding has been commenced. The primary factors that need to be considered in choosing arbitration or the court system are the nature of your business, subject matter of the dispute, control/surprise avoidance, cost and appellate rights.

If you are in the court system, you are looking at a jury trial unless you are excepted or all parties agree to waive. In California, certain types of businesses simply can't get a fair jury trial or have an uphill battle from the start. I include in those categories a health plan being sued by a hospital, a lender being sued by a borrower, attorneys being sued by their clients and employers being sued by their employees. That is why those disputes generally resolve via arbitration as opposed to the court system whenever possible.

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