By: Stephen P. Lagoy
It has been estimated that, if all costs are included, Fortune 500 Companies’ total litigation costs average about one-third of their after-tax profits! This fact has led large corporations to increasingly utilize creative non-traditional approaches to dispute resolution. One advantage of private dispute resolution is that the parties can customize the process by which the dispute will be resolved rather than having the process imposed by the Federal or State Rules of Civil Procedure. This can result in substantial savings. For example, some corporations submit claims to mediation early in the process – in some cases, before suit is filed — before full-blown (translation: expensive) discovery has taken place. Parties agree to narrow the scope of discovery to a limited amount of information seen as critical to the resolution of the dispute. For disputes settled at this stage, the discovery cost savings can be substantial.
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