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You've just bought a product that breaks. You try to return the
product or have the company fix it, and that doesn't work. You talk
to the salesperson; you ask to speak to the manager; you write
letters to the company's complaint department_and still you're not
satisfied with the company's response.
Maybe it's time to try a dispute resolution program. Dispute
resolution programs are an increasingly popular way to settle
disagreements. They also can be quicker, less expensive, and less
stressful than going to court.
Many businesses and private organizations, as well as public
agencies, offer dispute resolution programs. State and federal courts
may encourage you to try to resolve your problem through dispute
resolution before you file suit.
MEDIATION AND ARBITRATION
Two popular types of dispute resolution techniques are mediation and
arbitration. Through mediation, you and the other party try to
resolve the dispute with the help of a neutral third party (sometimes
called a mediator). In the course of informal meetings, the mediator
tries to help resolve your differences. The mediator does not make a
decision; it is up to you and the other party to reach an agreement.
The mediator is there to help you find a solution to your problem.
In arbitration, you present your case before an arbitrator, who makes
a decision about the case. Sometimes an arbitration panel rather than
one arbitrator decides the case. You and the other party may be able
to select the arbitrator beforehand. Arbitration is less formal than
court, though you and the other party may appear at hearings, present
evidence, or call and question each other's witnesses. The decision
may be binding and legally enforceable in court.
WHERE TO FIND DISPUTE RESOLUTION PROGRAMS
The following kinds of organizations will help you find out what
dispute resolution options are available in your area: government
entities, such as local or state consumer protection agencies, state
attorneys general, small claims courts, and some local court systems;
local nonprofit dispute resolution organizations; local Better
Business Bureaus; local bar associations; and local law school
CHOOSING A DISPUTE RESOLUTION PROGRAM
You may want to contact several different dispute resolution programs
to find the best one for your needs. The following questions may
help you compare programs.
* Is the dispute resolution program voluntary or mandatory? Many
dispute resolution programs are completely voluntary; the decision to
use them is yours. Courts in more than 20 states, however, may order
both sides in consumer cases to try arbitration or, in some cases,
* What procedures does the program use? If you choose mediation, you
probably will have to attend meetings. If you use arbitration, you
probably will have to appear for hearings. Some programs begin with
mediation and, if no decision can be reached, progress to
arbitration. Other programs resolve disputes on the basis of written
submissions, without your needing to appear at meetings or hearings.
* Does the program allow you to help select the mediator or
arbitrator? Many programs provide you with lists of eligible third
parties (often called "neutrals"). You then can choose who will help
you settle the dispute. Some states have specific requirements for
neutrals. Ask the program administrators for the ethics rules. Most
programs make sure that neutrals are not personally involved in the
dispute and will not benefit from the resolution.
If you use a dispute resolution program that begins with mediation
and, if needed, proceeds to arbitration, try to avoid using the same
person to act as mediator and arbitrator. (For example, you might
decide to omit or change some information in arbitration that was
previously presented during mediation.)
* Is confidentiality important to you? Find out if the program
guarantees confidentiality. Mediation is normally confidential;
arbitration sometimes is.
* How neutral is the program? To get a sense of the program's
neutrality, ask who pays for it.
* What are the costs? Some programs are free. Others charge a flat
rate or by how much a consumer can afford.
* Is the decision binding, meaning that both parties must accept it?
Mediation is nonbinding. Arbitration may be binding on the company,
both parties, or neither. If the arbitrator's decision is nonbinding,
you can reject it and try other avenues, including, in some areas,
small claims court.
* Be sure you are willing to accept the possible outcomes from the
dispute resolution program you choose.
PREPARING FOR A DISPUTE RESOLUTION FORUM
Once you enter a dispute resolution program, the process will
progress more easily and effectively if you are well-prepared. Here
are some ways to better prepare your case.
* Know and follow the program's rules. Make sure you meet all the
preliminary requirements. (For example, it's usually a good idea to
try first to resolve the problem with the company involved.)
* File your claim promptly. The earlier you submit your claim or
written statement and have the meeting or hearing, the less likely
you are to forget important details.
* Outline the important facts of the case. You'll need to be able to
tell when and where you bought the product, what the specific problem
is, and what you've done already to try to resolve the problem.
* Document your claim. Collect receipts, repair orders, warranties,
cancelled checks, contracts, or any other papers that document your
* Find out if witnesses are allowed. If the program allows witnesses
to appear or submit statements on your behalf, make sure you know
what the witnesses will say. If they are to appear in person, make
sure they know where and when the hearing is. If they are to submit
statements, make sure they know the appropriate deadlines and
* Get information from the other party. If the program allows, ask
for documented information from the other party before the meeting or
* Know what you want the company to do. Go into the dispute
resolution process with a preferred solution in mind. Decide, for
example, if you would prefer the company to allow you to return the
product for a refund, exchange it for a new product, fix the product
at the company's expense, or refund your expenses (including any
repair costs). At the same time, allow room for flexibility. You may
have to compromise.
PRESERVING THE OPPORTUNITY TO GO TO COURT
A dispute resolution program may fail to settle a problem, and you
may want to take your complaint to court. Make sure you preserve
your opportunity to litigate. Some jurisdictions limit the time
period in which you may sue. If you use a dispute resolution program
to settle your complaint, know well in advance when your right to
litigate your dispute expires. You also may be precluded from going
to court if you enter into an arbitration program that is binding on
FOR MORE INFORMATION
For an expanded discussion of the dispute resolution process and a
list of mediation and arbitration programs, send for a free copy of
Road to Resolution: Settling Consumer Disputes. Write: Public
Reference, Federal Trade Commission, Washington, DC 20580, or call
If you have complaints or comments about nationally government-run
programs, write: Correspondence Branch, Federal Trade Commission,
Washington, DC 20580. For concerns about privately-run programs,
write: National Institute for Dispute Resolution, 1901 L Street, NW,
Suite 600, Washington, DC 20036, or call (202) 466-4764.
modified from 8/93 Federal Trade Commission material
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