Alternative Dispute Resolution Case Study

ADR Report

The author of this report has been asked to prepare a brief report about a real-world example of a situation that could have gone to litigation but was instead handled via alternative dispute resolution, or ADR for short. As part of the recitation of the event, facts will be included such as the legal form of the business in question, how the case would have been processed through the court system (had it gotten that far), the form of alternative dispute resolution that was used, the form of alternative dispute resolution that the author recommends and the differences in costs and benefits between litigation and ADR in regards to the selected dispute.

The business in question for this report (which shall not be named) is a moderately sized Subchapter S Corporation (S-Corp) business with about two hundred employees. For smaller to moderately sized businesses, the S-Corp structure is quite popular (Raible, Teti & Brinker, 2015). At issue was the fact that the customer service for the business in question made a series of miscues that led to a client being inconvenienced, but not out any real money or other damages. The required deliverable, albeit late, was delivered to the client. When the client was presented with a bill for the services rendered, the client asserted that he would not a dime since the matter was so profusely mishandled. Even with the miscues, there was expense incurred to the business to get the job done and those expenses are normally carried by the client in the form of what they were billed. The client had the option to return the deliverable but chose not to do that either. In short, the client was given delivery of what they paid for, albeit late and only after a couple revisions were done. Of course, the business management was livid because the client took delivery yet refused to pay. The business asserted that while a discount or future credit might be in order, receiving the bungled order for free was out of the question unless the merchandise was returned.

For a time, the business let things cool off and then approached the man a few days later. The business asserted that they could certainly negotiate a lower price or price concession on future orders due to the mishap but that non-payment was not going to be accepted or tolerated. The client still refused to budge. Since the value of the item delivered was actually quite high, the business then asserted that they would either need to work out a reduced price, get the item back or they would have to sue…one of the three. At first, the client balked and said "bring it on." Going through litigation would be pricy but the business was confident that the unreasonable nature of the client would lead to the client getting pegged for the legal bills. Further, the business owner was willing to pay a little out of pocket to prove the point that his clients could not get something for nothing. In the end, legal bills for each party would quite likely be shouldered by each litigant and the business, even if victorious, would still be in the hole. If the value of the item was less than $5,000, then small claims would be the way to go and thus legal bills might be avoided since small claims cases often do not involve lawyers. However, the item in question was worth a little more than that and a different venue might have been necessary.