Arbitration Versus Class Action

894 WordsAug 30, 20134 Pages
Week 4 Case Study – Arbitration Versus Class Action What Should the Judge Do? 1. The judge should let the arbitration proceed as Mr Groetsch has the right to pursue any action that he believes is necessary to advance his claim. Class action suits normally take longer to prosecute because attorneys want to find and represent as many claimants as possible. Attorneys handling the litigation receive a substantial fee from the compensation settlement whereas the cost of arbitration is minimal. Litigation also requires court fees as well as attorney costs while arbitration may only require the cost of a personal attorney and the fee for the arbitrator. Class action lawsuits are argued in a court of law and may require an extensive amount of…show more content…
( All Business 2012 ). Another scenario may be to use a mediator instead of an arbitrator who would allow the parties to work out a mutually acceptable solution. With a pending class action suit, the brokerage may offer a reasonable settlement to avoid any further expense. This and other forms of alternate dispute resolution are the least expensive and the least time-consuming procedures, as compared to formal alternatives. Other considerations for using a less formal process are the psychological consequences of negotiations. ( Fugate & Kinicki 2012 ). Mr Groetsch, or other family members, may have other financial investments with Securities America and, as such, they may want to maintain a friendly relationship with the firm. As an added-value negotiation, the Groetsch family may be able to acquire stock in other companies in exchange for the worthless Medical Capital bonds, which could eventually become worth more than a cash settlement. Finally, if the plaintiff has no need to maintain a friendly relationship with the brokerage firm, it may be possible to mediate or arbitrate a settlement to recover the monetary losses and still pursue punitive damages in court as a separate civil action. Cynthia, good use of concepts and sources. It seems that a large part of the issue is deciding between what is best for one person, and what might be best for the group as a whole. Good work! References All
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