A study conducted by the American Arbitration Association (AAA) reports that U.S. civil litigation costs are escalating to $200 billion - $300 billion annually.  (American Arbitration Association-sponsored Research Study, 2006*) Litigation costs impact all businesses, both suppliers and retailers, and seem to be a function of just being “in business.”  If a company is conducting business, then they’ve probably experienced a need to defend themselves against a justified or frivolous claim of some type.  Once litigation begins, they soon realize how quickly legal costs can climb to 4, 5 or even 6-digit figures while formulating a defense.  The cost for lawyers, expert witnesses, discovery, court costs, document filings, etc. all add-up rapidly.

IHA has launched an initiative, Alternative Dispute Resolution (ADR), that can save members—both large and small--time and money relating to litigation and the escalating costs associated with defending a company against legal claims of all types. 

ADR is a long-standing method to obtain satisfaction in cases without the need for litigation in a court-room setting.  Both mediation and arbitration are considered types of ADR and can avoid some or most of the costs noted above.  Both methods save time and money, provide for confidentiality, and result in a situation where both parties can feel the resolution was a win-win.  The win-win can be especially important if the parties plan to have an on-going business relationship.  In the AAA survey respondents, a majority of the companies reported that ADR methods reduce the time needed to resolve disputes and also reduce the cost of resolution (excluding judgments/awards).  For more information on mediation and arbitration read our FAQs or visit: www.cpradr.org

Although ADR rose to IHA’s attention as an industry-wide initiative to address disputes pertaining to Intellectual Property Rights, an ADR strategy can apply to multiple types of legal disputes and begin to take a large bite out of that growing nation-wide litigation cost of $300 billion.  IHA and its Board of Directors are asking members to sign a policy statement on the preference to resolve legal matters by first evaluating a solution using ADR methods as opposed to assuming litigation is the first and only method for resolution.  The non-binding pledge asserts a company’s support of the housewares industry in taking a stand against the escalating cost of litigation. 

Click here to download and sign the pledge.  Please complete the form and return it to Dean Kurtis at dkurtis@housewares.org or fax the document back to 847-292-4211.

If you would like more information about early dispute resolution, mediation, or arbitration, please contact:

Dale Matschullat, Esq.
Schiff Hardin LLP
233 South Wacker Drive, Ste. 6600
Chicago, IL  60606-6473
312-258-5507
dmatschullat@schiffhardin.com

*American Arbitration Association-Sponsored Research Study. (2006). Improving Economic and Non-Economic Outcomes in Managing Business Conflicts. New York: American Arbitration Association.