The business world increasingly is finding litigation to be an unsatisfactory method for the resolution of commercial disputes. Litigation costs are substantial (increasingly so with the expansion of electronic discovery), key personnel are distracted from their companies’ core business activities, and judicial decisions and jury verdicts are uncertain and often destructive of ongoing business relationships. Perhaps the ultimate irony of litigation as a dispute resolution method is that, as data repeatedly show, more than 95 per cent of civil actions are resolved by means other than an actual trial.
Recent years have seen the increased use of “alternative dispute resolution” (ADR), most notably mediation and arbitration. The increasing popularity of ADR invites consideration of the question: should golf, as an industry, embrace ADR? We answer this question with an enthusiastic “yes,” as we believe the golf industry is particularly well-suited for ADR.
Mediation is a process whereby the disputants and their attorneys meet with a mediator in an effort to negotiate a resolution of their dispute. The parties themselves decide the scope of information they will exchange prior to the mediation, the nature of the presentations to be made to the mediator, the date, time and place of the mediation, and the terms of any resolution. The mediator merely assists in attempting to resolve the dispute and has no power to compel any result to which the parties themselves do not agree. Studies and anecdotal evidence consistently demonstrate that a properly timed and conducted mediation usually results in the resolution of a business dispute.
Arbitration is more akin to litigation in that the parties submit their dispute for decision following an adversarial proceeding, although to a privately–selected, neutral arbitrator instead of a publicly-appointed or elected judge. But unlike mediation, arbitration results in a binding decision made by the arbitrator. Because arbitration is a “creature of contract,” the parties can agree to an arbitrator who has expertise regarding the dispute at issue, and can tailor a process to more directly and expeditiously reach the heart of a business dispute.
The golf industry is not monolithic. It includes course owners, course managers, builders, manufacturers, distributors, retailers, instructors, club members and other players, media, travel providers, professional service providers and others—each with their own legal relationships, requirements and concerns.
The diverse constituencies of the golf industry are held together by institutional structures that cut across the industry. Major trade shows bring all segments of the industry together. Strong industry associations provide educational resources and information to all industry constituencies.
Moreover, these constituencies, embodying the breadth, diversity and richness of the golf industry, fit under an umbrella of common culture, characteristics and values of golf as a pastime and competitive sport—including individual responsibility, civility, integrity, foresight and respect. Notably, these values are reflected in the goals of ADR, i.e. resolution methods that address conflict knowledgably, proactively, efficiently and non-destructively.
The values, commonality and structural institutions of the golf industry create an environment conducive to the promotion of ADR as a preferred method for the resolution of disputes. Just as other industries have adopted ADR as a compelling alternative to litigation of commercial disputes, golf-related businesses can similarly benefit from the advantages offered by mediation and arbitration.
Industries Increasingly Are Turning To ADR
While ADR is not new, education, awareness and use of ADR methods is on the rise. Law schools now routinely offer courses on ADR, and a number of law schools have created programs devoted to ADR studies. State courts provide a myriad of court-annexed ADR alternatives, with some states mandating that disputes be submitted to mediation before the court will permit the litigation to continue or a trial to be scheduled.
In certain industries, ADR methods are firmly established as preferred alternatives to litigation. The construction industry, for example, long has used as templates the contract documents generated by the American Institute of Architects. These documents call for disputes to be submitted to mediation and/or arbitration.
Similarly, the securities industry routinely resolves disputes via ADR. Virtually all brokerage agreements contain provisions requiring that claims by customers be submitted to mediation and/or arbitration. Moreover, as a matter of regulatory policy, employment disputes within the securities industry are channeled to ADR.
The healthcare industry presents another example where ADR is gaining an increasing foothold. Since 1992, the American Health Lawyers Association has offered an Alternative Dispute Resolution Service with dispute resolvers who have subject matter expertise in the healthcare arena. More recently, the American Arbitration Association (AAA) launched a new set of arbitration rules to resolve reimbursement disputes between payors and providers in the healthcare industry. To complement these Rules, the AAA established a National Healthcare Panel comprised of arbitrators and mediators that possess many years of experience across the spectrum of the healthcare industry.
Current State Of Golf-Related ADR
The golf industry’s adoption of ADR will be accomplished, over time, by individual companies making individual decisions to channel their disputes to mediation and/or arbitration. Whether a particular golf-related business should pursue ADR as its preferred dispute resolution method is a business decision for that entity to make based upon its individual circumstances.
Several months ago the American Arbitration Association created a National Golf Advisory Committee. The Committee considered the issue of whether the golf industry would benefit from the existence of a specialized panel of mediators and arbitrators knowledgeable and experienced with the types of issues encountered by golf-related businesses. Concluding that the industry would be receptive to a National Golf Industry Panel, the AAA adopted criteria for panel membership which it has begun to implement.
The existence of a specialized panel of golf mediators and arbitrators provides a valuable resource for those golf-related businesses who determine that ADR offers a more attractive alternative than litigation to the resolution of disputes.
Recommended Best Practices
We drafted a Recommended Best Practices document as a reference to facilitate a business’s consideration of whether to utilize ADR as its preferred method of dispute resolution. A golf-related business’s consideration of this issue should be predicated upon the same type of analysis and business judgment that companies bring to other business decisions. Key factors include an understanding of the nature and benefits of mediation and arbitration, and how ADR can best be utilized.
Golf-related companies should treat the decision of whether to adopt ADR methods as an important business decision that can have substantial impact on the company’s financial resources, use of personnel and business relationships. Companies should avail themselves of information and educational tools to ensure they pursue the dispute resolution methods that are most appropriate for its particular circumstances.
See the best practices guide here.