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Methods for Resolving Claims without Going to Court


Negotiation, mediation, arbitration, and even reconciliation are just a few of the alternatives to small claims court, and these methods can be, at times, more effective in getting judgments paid than the court process. Since most small claims cases involve money or landlord/tenant cases where there is no specific landlord/tenant court, alternative methods to small claims court may be quite attractive.

There are times when these alternative methods may be a very good choice. It is a well known fact that litigation, even small claims court, can ruin a relationship with your neighbor, relative, employer; and sometimes those relationships are very important and should be maintained. The deciding factors in your decision of whether to go to court or utilize one of the many ADR methods will be the type of dispute, the outcome you desire, the relationship you have with the opposing party, and the cost involved in each. Should you decide on ADR, then you will need to decide whether this will be a distributive or integrative negotiation.

Distributive bargaining — a win/lose scenario — is used most often in disputes involving a fixed amount such as money or property and personal relationships are low on the scale of importance. Integrative bargaining — a win/win process — applies to disputes in which relationships are very important and the amount involved in the dispute is not fixed. Whereas distributive bargaining focuses on differences, integrative negotiation focuses on mending relationships and joint problem solving.

  • Arbitration is a legal technique for resolving disputes outside of the courts in front of neutral parties. Because most often this method is binding, and even intimidating, it is closer to litigation than any of the other ADR methods. In addition, it can be more expensive than small claims court and often does not result in maintaining relationships — one of the major reasons for choosing ADR.

The following methods are integrative processes in which relationships are important. The reason these methods are attractive is because maintaining that relationship can help to ensure that you can collect the money due to you.

  • Mediation is a method of ADR in which an independent person or persons assists disputants in coming to a voluntary negotiated agreement. Mediation gives the parties the opportunity to discuss the issues raised, clear up misunderstandings, determine the underlying interests or concerns, find areas of agreement and, ultimately, to incorporate those areas of agreements into resolutions. Whether there is an agreement or not or what the parameters of the agreement are, is up to the disputing parties rather than the third party.
  • Negotiation is a discussion between the parties in a dispute. This is usually a give and take where agreement is reached by compromise and mutual adjustment. Money matters are handled well in negotiations and the relationships between parties can be easily maintained. Negotiation can be used just as effectively for personal financial disputes as for major issues between corporations or countries.
  • Conciliation is an ADR process in which sides are brought together to arrive at an agreement in a friendly manner by allowing both sides to reconcile through a nonbinding third party. The method is used to correct distrust and animosity between parties.

More small claims articles and pre-litigation resources

We are available at any time to answer your questions regarding your possible claim, proceeding to court or mediation, and collecting your judgment. Contact us if you have questions or would like a recommendation for professional help in collecting your judgement.

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This month’s focus: Michigan

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Tip of the Week

September 27, 2010

If you have been awarded a judgment, waited the 30 days required, sent a demand letter giving the debtor a time limit for paying his/her debt; what should you do if you still have no money? You know that the court can do little, but before you take steps to garnish wages or bank accounts, consider suggesting negotiation or mediation if the debtor gives any impression that they want to settle the matter.

More tips...

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