Out of Court
Posted on September 2, 2011 by
By David Gill
Civil litigation costs have ballooned to between $200 billion and $300 billion a year--and the International Housewares Association would like to significantly reduce the housewares industry's piece of this business.
For this reason, IHA has introduced its alternative dispute resolution (ADR) initiative. ADR involves the exploration of alternatives to litigation in court, such as arbitration and mediation, for business disputes. The association has partnered with the International Institute for Conflict Prevention and Resolutions, which has been promoting ADR across a variety of industries--and which has garnered support for the initiative from Fortune 500 companies, according to an IHA program.
Under the IHA initiative, association members sign a pledge stating that they will pursue alternatives to litigation when conflicts arise before going all the way to court. As of mid-July, more than 30 companies had signed the pledge, IHA said.
The association has also designated Dean Kurtis, its vice president of finance and information technology, as its ADR point person. Members involved in a dispute can contact Kurtis, who then directs them to information and resources for ADR. In addition, Dale Matschullat, chairman of IHA's Government Affairs Committee and attorney with Schiff Hardin, will provide no-charge advice to members on pursuing ADR dispute resolution.
As Phil Brandl, IHA's president, explained in an interview with HFN, the association launched this program in an effort to be proactive to a huge problem for its members. "There has been a lot of discussion among the IHA board about how litigation is costing a lot of money," Brandl said. "There was a need for us to play a role in creating awareness of other ways to handle this."
There was also a need to clarify the association's role in the dispute process. "Legally, we as an association can't get involved in disputes between members," Brandl said. "But we can facilitate these processes. We can turn this problem into an opportunity."
Matschullat said, "The whole idea involves bringing business people together to find business solutions. We're doing this to save relationships, and to find ways for business people to control the process of conflict resolution, rather than the courts. When a dispute arises, those who have signed the pledge say we want to look at this dispute from our business position rather than our legal position."
Describing his role as IHA's ADR contact, Kurtis said, "I will determine what the issue is and recommend alternatives to litigation. My part in this is a matter of education. I will underscore IHA's role in this which is to point companies to resources for dispute resolution, and is not an advisory role."
Bruce Kaminstein, IHA's chairman and CEO of Casabella, said moving the association's members toward alternatives to litigation presents a "big challenge." ADR represents "a culture change from the knee-jerk reaction to call your attorney first and be aggressive, always adversarial."