Research shared by the American Arbitration Association, also known as the AAA (not to be confused with the automobile service), has shown arbitration, an alternate method of dispute resolution, can markedly reduce both the cost and time involved in settling business disputes.
However, it is important to understand how arbitration and mediation are different from litigation. Your attorney can and should advise you on the best course of action for your matter.
Here, Justice George D. Marlow, Counsel to McCabe & Mack LLP, and an accepted member of the American Arbitration Association Roster of Neutrals since 2010, explains how arbitration and mediation can benefit you and your business.
A. Let me describe what arbitration is, as opposed to mediation, because they are two different concepts.
Arbitrators are selected by attorneys representing their clients in situations that have not been resolved by mediation or other intervention. They are trying to avoid going to court. The attorneys usually look for an arbitrator who is a member of the American Arbitration Association’s Roster of Neutrals, because many of us are former judges who have undergone arbitration training with the AAA specifically for this purpose.
When someone chooses arbitration, they can expect a situation like the courtroom, except in an arbitration case, there can be either one or three arbitrators, and the decision is final and cannot be appealed. Like a court case, there are two sides, and people testify under oath. There is a claimant asking for money or some other type of relief (similar to a plaintiff), based on an issue that arose in the past. On the other side, there is a respondent, (similar to the defendant), and there are witnesses. People give their testimonies, and then either the single arbitrator or the three arbitrators decide, and write an opinion which is final. Because of this streamlined process, arbitration cases usually wrap up more quickly than going to court and are less costly.
Right now, I have four cases where I’m a single arbitrator; and I have one other case where I am one of three arbitrators. I find most often that employment cases and commercial cases are referred to me by the AAA. I also hear other arbitrations referred to me by local lawyers.
Mediation is a very different concept. It’s usually between two people who may have a lawsuit pending. They don’t want to go to court – they just want an honest person to mediate their dispute. They contact us and select a mediator in the same way people select an arbitrator.
In mediation, a less formal process, people do not testify under oath or bring forth witnesses. Instead, I start by learning the facts. I talk to each side to get their take on the case and to understand the issues and the parties’ concerns. I usually give an introductory speech, sharing a little about my background as a judge for 30 years and my experiences working with people to settle cases, which really is almost the same thing as mediation in a private setting. We try very hard to get them to understand if they don’t successfully resolve their case with mediation, chances are it will go to court. One person is going to win everything (or mostly everything), and the other is going to walk away with nothing. The idea is to get them to compromise on a reasonable solution, usually about money. If mediation does not work, then the matter can still be litigated in court.
So, for example, let’s say somebody gets injured in an auto accident, and they have $150,000 worth of medical and other bills. However, perhaps there’s some negligence on both sides of the case. I work with their attorneys to get the parties to determine a figure that each can live with – although they might not be happy with it. Maybe one driver did something in a negligent way, and the other driver did something negligent as well. We try to get them to meet somewhere near the middle of whatever the requested amount is, and it’s usually a better outcome than expending the time, energy and expense of going to court.
If their lawyers and I can get them to agree – and usually we can – we settle the case. Or, if we can’t settle that day, I get them so close to settled that I schedule another date to return. And in those two or three instances where that happened, I received a call from the lawyers, shortly afterward, telling me they settled the case.
While there’s nothing in the law that says you must be a lawyer to mediate a case, most mediators tend to be lawyers. Attorneys in the region know who is skilled at helping people mediate solutions, and often they will just call the law firm and ask for that attorney to mediate a case.
In both arbitration and mediation, the arbitrators and mediators are paid on an hourly basis and each side pays half of the fee.
A. A few years after I retired from the bench, I arbitrated a case between two men who were splitting up and couldn’t agree on what to do about their dog. It was contentious, and their attorneys could not resolve the dispute. The lawyers called me and said, “We’ve divided up their property, and have resolved every other issue in writing, but they can’t agree on the dog. Would you please arbitrate?”
Sometimes peoples’ dogs substitute for children, so you would think this was a situation that would call for mediation instead. But their lawyers chose arbitration.
I held a hearing in the conference room at the law firm where I worked at the time. It took about two hours to hear the testimony and decide which member of this couple would keep the dog. One person wanted “full custody” of the dog and refused to give the other visitation rights. The other person was willing to compromise and share visitation rights. I wrote a decision that gave custody of the dog to the second person because he was more reasonable and willing to share. It was a final decision.
A. Well, that depends. If people can work out an agreement, they’ll settle the case, just like they would in court. I’ve mediated and arbitrated many cases to settlement. Litigating a commercial case in court can take anywhere from two to four years on average, where arbitration can take as little as three to four months. Remember the decision in arbitration is binding, meaning it is final and cannot be reversed unless the arbitrator committed fraud, is corrupt or shown to be incompetent. Mediation is not binding; if mediation fails, the issue can be arbitrated privately or litigated in court.
I think people would want to avoid litigation, because going to court is very expensive. Probably 90-95% of cases that go to court will settle, but it takes many months or even years because they must have discovery to make sure they know all the facts, and they must size up the witnesses and take depositions – it’s a lot of work beforehand. But, usually, they can settle it.
Matrimonial and custody cases, when people get divorced, are the most difficult to settle. It can take years to resolve a divorce case. It’s difficult for the judges to manage those cases, because some of the couples are just so angry, they become irrational. They can’t see the forest through the trees.
I would always try to talk to them from the bench, especially with custody battles. I would say to them, “You have children, and they want to love both of you. And if you talk in a nasty way to your spouse, or you tell the children lies about your spouse, then someday, when they grow up, they’re going to learn what happened. And they’re going to take it out on you, and that will make you miserable. Don’t do that to yourselves, to each other, or to them.”
Sometimes these words help to resolve a case. And, sometimes they just fight until they can’t fight anymore. Some matrimonial cases take four or five years to resolve. It’s so sad.
A. The AAA will give their attorneys a list of available arbitrators, with their qualifications, resumes, references, and history of how they’ve handled past arbitrations. Then each side does their homework and presents a short list of three or four arbitrators they’ve chosen. The sides work to agree on at least one arbitrator – or three arbitrators if required by a contract. Obviously, that’s three times as expensive. Most of the cases get litigated with one arbitrator, because it’s much less expensive.
A. I grew up in Queens and did trial and appellate work for the Queens DA’s office after law school. My father was a lawyer, and he expected me to come into his law practice eventually.
One day, at the end of my workday, he and his partner had a law journal open on the desk and they were looking at an ad for an upstate prosecutor. My father suggested I apply for it. I said, “I thought you wanted me to come into your practice?” He said, yes, but he knew I wanted to leave New York City. So I mailed a resume to a box number, and about 10 days later, I received a phone call from Al Rosenblatt, who was, at the time, a 35-year-old elected district attorney in Dutchess County – that was a very young age for an elected district attorney in those days. I attended the interview for over two hours, and he offered me the job. It took a few months to get the salary I needed so I could move my family (Marcy and I already had two children by then), but Al persevered in advocating on my behalf to convince the county legislature to agree to $15,500. This was in 1971.
So, I said to Al, “Okay, I’ll come. But I want to make sure my wife is okay with this and I must talk to my father. I’ll call you on Monday.” My wife said that she still wanted to move. Then I called my father, whose partner had passed away in the meantime, and I told him about the offer. I asked if he thought I should go. He said, “That’s not my decision, that’s yours. It’s your life, not mine. Go – don’t worry about me. If you don’t like it there, you can always come back.” I’ll never forget my Dad’s generosity.
In civil court in New York City, the place was noisy, crowded, and teeming with people. In Poughkeepsie, when I walked into the courthouse on the first day of work, there were only about three people in the lobby, and I thought, “This is the way I want to live. I don’t want to live like I’m in a subway car.”
Three weeks after I started the job, I called my father and said, “Dad, this is like paradise. I’m never coming back.” He was fine with my decision.
I stayed with Al Rosenblatt for four years. He then became a Dutchess County Court Judge and appointed me his part-time law clerk; I started a law practice on the side. In 1980, I was elected part-time Poughkeepsie Town Justice. Then, in 1984, I was sworn in as a Judge of the Dutchess County Family Court, then as a Dutchess County Court Judge nine years later. In county court, I tried a death penalty case. I was elected to Dutchess County Supreme Court in 1999; and in 2001, Governor Pataki appointed me to the NYS Appellate Division (First Dept.) in Manhattan. I retired in 2009.
A. In 1987, Al Rosenblatt was New York State’s chief administrative judge and he created the NYS Advisory Committee on Judicial Ethics. He chose 17 judges to sit on the committee – now 27 judges – and they answer ethics questions from judges across the state who request confidential ethics advice about specific situations. Today, this committee receives upwards of 1,000 phone calls a year on ethics questions from some 3,600 judges in the state. We write and publish about 200 formal opinions each year.
This is a very important service to the judicial community. If you’re a judge and you write to us with an ethics question, and we follow it up with an opinion that gets published, then the Commission on Judicial Conduct, a disciplinary body, cannot prosecute you for a breach of ethics rules, even if they disagree with our opinion. You don’t get a presumption that you’re acting ethically unless you have a written opinion; however, a phone answer is of great value to a nervous judge who seeks expert oral advice.
I’ve served on this committee since 1987. While I have been actively involved as chair or co-chair since 1996, it is important to have continuity. A few years ago, I asked Chief Judge Janet DiFiore to appoint a co-chair, Hon. Margaret Walsh, a Supreme Court Justice in Albany County. Since 1987, we have written about 5,000 ethics opinions.
A. After I retired from the bench in 2009, I completed the AAA’s arbitration training program, and was placed on their Roster of Neutrals in 2010. I’m on the AAA list for commercial arbitration and employment arbitration, and arbitrate or mediate personal injury cases locally. As a judge, I’ve been listening to testimony for 30 years, and helping people go through a methodical process to resolve their disputes. I am always ready to work with attorneys in the region who wish to arbitrate or mediate their cases.
If you have any questions, please feel free to reach out to me personally at 845-486-6887 or by email.
The Hon. George D. Marlow, retired New York State Appellate Division (First Dept.) Justice, also served as the Statewide Judicial Director of Ethics Education and Counsel. In this role, Justice Marlow conducted ethics training and ethics counseling, and oversaw ethics opinion writing for all 3,600 judges and non-judicial employees of the Unified Court System, including town and village justices. Since retiring in 2009, he has continued to serve pro bono as Chair and Co-Chair of the NYS Advisory Committee on Judicial Ethics. He currently serves as Counsel to McCabe & Mack LLP primarily focusing on Arbitration and Mediation. He was accepted to the American Arbitration Association’s Roster of Neutrals in 2010.
Previously, Justice Marlow had served as an Associate Justice of the Appellate Division from 2001–2008, after his 1999 election to the Supreme Court in the Ninth Judicial District. Justice Marlow was elected earlier as a trial judge in Town, Family, County, and Supreme Courts for 21 of his 52 years in the legal profession. He was a prosecuting attorney arguing appeals and handling trials in Queens and Dutchess counties after law school, and he spent eight years in private practice in Poughkeepsie.
Justice Marlow frequently teaches at judicial and legal seminars on judicial ethics, professional ethics, appeals, capital case litigation, domestic violence, and gender bias. He also has authored and co-authored several legal writings and scores of published judicial opinions.
Justice Marlow and his wife Marcy Marlow married in 1964 and raised their family in the Town of Poughkeepsie. They are proud to have five married children – two attorneys, two doctors, and a teacher – and 16 beautiful grandchildren.