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Tools To Help You Decide How Your Healthcare Dispute Will Be Resolved

September 10, 2019

If you wait until a natural disaster strikes to prepare for a power outage or worse, you may find yourself with limited options, a dark house and a lot of spoiled food. The chances that one of your important contracts will go sour are much greater than the risk of a hurricane’s direct hit, yet we pay far more attention to disaster preparedness than we do to how our future business disputes will get resolved.

Mostly this is because we trust that the civil justice system (i.e. litigation) will be there when needed. I would argue that this is like counting on the National Guard to keep order when a disaster occurs. Sure, at the end of the day everything will be fine, but it could be very uncomfortable in the meantime.

The absence of a dispute resolution clause from any contract is essentially a choice to permit either party to engage in unlimited litigation, placing each side at the mercy of the craziest/nastiest/richest person in the deal. Clearly, it makes sense to take time at the formation of the contract (when relationships are at their best) to decide how future disputes will be resolved.

However, my experience is that parties typically ignore this opportunity, or accept the dispute resolution clauses presented to them in “standard” contracts, with only a few changes. I think this occurs because it takes a real effort to think through all aspects of a future dispute resolution process, and by the time this clause is being considered the business deal needs to get signed.

The American Arbitration Association’s Clausebuilder tool offers a helpful way to tackle the complexity of dispute resolution design. By clicking through a series of topics and choosing among options to address each, the user can create a customized dispute resolution clause in a few minutes. More importantly, the exercise forces the user to consider issues that would otherwise default to the AAA’s standard rules or the discretion of the arbitrator. Thus, it can be used as a checklist even when circumstances do not permit a wholesale replacement of the proposed contract’s dispute resolution clause.

Another option to consider is the AHLA Guide to Arbitration Clauses. Although it lacks the convenience of the AAA Clausebuilder’s automated result, it covers much the same ground from the vantage point of the Arbitration Rules used by the AHLA’s Dispute Resolution Service.

These tools may not cover everything you need to include in your contract. And many of the drafting options presented deserve a separate discussion – to be covered here in the future. But they are a great place to start.

(Photo by John Middelkoop on Unsplash)