Lawsuits, by their very nature, are acrimonious affairs. They can be messy, they’re time-consuming, and even when they’re relatively uncomplicated, they’re expensive. For a lower- or median-income co-op or condo resident, getting sued or needing to bring legal action against someone can trigger serious panic.
There are low- or no-cost legal resources out there, however. Arbitration and other methods for alternative dispute resolution, or ADR, have existed for some time and can provide a lawsuit-free path to harmony—or something like it. These methods aren’t right for every co-op- or condo-related dispute, but for the shareholder who can’t afford a lawyer, it might be the way out of an otherwise sticky, costly situation.
An ADR Primer
According to the American Arbitration Association (AAA), arbitration is “the submission of a dispute to one or more impartial persons for a final and binding decision, known as an ‘award.’” If that sounds a lot like a lawsuit, it’s supposed to: The primary difference between arbitration and a lawsuit is essentially the degree of formality used by the people involved. Arbitration was actually here first: the Egyptians, Greeks, and Romans all resolved conflicts using the arbitration method before instituting a formal court system. Mediation and negotiation, other forms of ADR, are similar to arbitration in terms of process, except that the decisions made in those processes are usually non-binding.
Though the formal court system certainly has its advantages, (the right to appeal, recognized precedents, etc.) when a plaintiff brings a problem into a court of law, there’s a lot of red tape involved—tape that is theoretically eliminated in ADR. Lawsuits must be scheduled far in advance; arbitrations can be heard quickly. If you file a lawsuit, there are many rules of evidence to follow; those rules don’t apply in ADR, so you can take your time explaining your case and bring in as many homemade pie charts as you like. Juries hear most lawsuits; there are no juries in ADR proceedings. With ADR, an award is decided by a neutral third party that could be an attorney, a retired judge, a teacher, businessperson, psychologist, or anyone with expertise relevant to the case.
Arbitration decisions are not final or binding unless specified in a contract’s arbitration clause. If the decision is binding, an appropriate court will make the award an enforceable judgment. If either party is unsatisfied with the way things worked out, they are free to pursue formal legal action from there.