Conflict ResolutionConflict Resolution
September 1, 2003
Originally Published MX September/October 2003
GOVERNMENT & LEGAL AFFAIRS
Medtech executives can save time and money—and gain better control of the outcome—by using mediation to resolve business conflicts.
James W. Heller
Medical technology companies in the United States collectively spend hundreds of millions of dollars each year resolving conflicts through the legal system. They lose many good customers and suppliers in the wake of litigated disputes. And too often—needlessly often—they relinquish control of their fate to a judge, jury, or arbitrator. Mishandled conflicts result in high legal costs, significant lost work time, damaged relationships, and, for all the time, trouble, and expense, poor outcomes.
Litigation, arbitration, and mediation are the most common means of conflict resolution (see Table I).
Area of Comparison | Mediation | Arbitration | Litigation |
Time to hearing | Weeks | Months | Years |
Cost to parties | Low | Medium | High |
Outcome controller | Parties | Arbitrator | Judge |
Procedural formality | Informal | Formal | Very formal |
Hearing location | Decided by parties | Decided by arbitrator | Court |
Privacy of proceedings | Private | Private | Public |
Evidentiary rules | None | Informal | Formal and complex |
Witnesses | No | Yes | Yes |
Discovery process | No | Limited | Yes |
Attorney role | Advisor | Advocate | Advocate |
Negotiation method | Issues-based compromise | Position-based | Position-based |
Outcome | Win-win | Win-lose | Win-lose |
Focus | Future | Past | Past |
Relationship between parties | Cooperative | Adversarial | Adversarial |
Compliance | Generally good | Variable | Often appealed |
Establishes legal precedent | No | No | Yes |
Binding and enforceable outcome | Yes | Yes | Yes |
Litigation and arbitration are formal, adversarial procedures that cost the opposing parties considerable time and money and leave final judgment entirely in the hands of someone else. The outcome is a win for one party and a loss for the other.
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