Law 531 - Riordan Altervative Dispute Resolution (adr) Policy

Corporate Legal Plan-Team B

William E. Lowry

Law 531

March 2, 2011

Megan Hill, J.D.

Riordan Altervative Dispute Resolution (ADR) Policy

Limitation of Liability for Cost/Effort/Risk of Litigation

Prevention is the best defense against disputes, and disputes will happen to even the best firms. Riordan is no exception. Over the past five years, litigation of disputes have resulted in significant losses in time and cost. Simultaneously, our legal outsource team of Litteral & Finkel have amassed a fortune from our litigation. In addition, it appears that those we sue or those who sue us are equally vulnerable to the outcomes of this process. For example, if we are fortunate enough to win we will still be out the productive time wasted in depositions, witness subpoenas, lawyer meetings, court hearings, and the cost of attorney's fees (at least one-third of our recovery, if any), experts, court reporters, court costs, etal.

Therefore, with the new fiscal year commencing 01 October 2011, mediation is an absolute pre-requisite to filing litigation of any dispute at Riordan Manufacturing.

The Need for an ADR Policy

Many times in litigation, our executives do not get a realistic assessment of Riordan's case; often, the only view he/she receives is our attorney's. In the same way that an expert report can help our executives for the opposing party see the potential downside of their case, alternative dispute resolution can be a useful reality check. During mediation, Riordan will hear the shortcomings of their cases directly, without the filter of a lawyer's point of view. Mediation also gathers all parties in one place, which can prompt compromise and settlement. Statistically speaking, Riordan has approximately an 85% chance of saving approximately 85% of their dispute costs (as opposed to settlement costs which theoretically should stay the same) by using mediation.

Advantages of Mediation

Litigation is cost prohibitive and destroys relationships with our business partners, even when this would not be a desired outcome. Indeed, litigation exacerbates the business climate to the point where the parties can no longer function in a logical business-like manner. Somewhere the line crosses over to a more personal and emotional state of affairs. Even arbitration, will cost thousands, perhaps tens of thousands of dollars or more to resolve. So, an added benefit of mediation may be to retain the relationship between the disputing business parties.

Figure One-Meeting with the Mediator

The ADR Stipulations

The purpose of the ADR clause is to establish a less adversarial and hostile method for resolving disputes between Riordan Manufacturing and our valuable clients, contractors, partners, and subcontractors. Riordan has determined that our business relationships provide a competitive advantage and should be preserved if at all possible. Riordan believes that finding a win-win solution to its' disputes allows all parties to achieve a fair and reasonable settlement. Disputes to be subject to this ADR process include:

* Contract Disputes * Business, corporate and partnership disputes

* Litigation management * Innovative resolution of contract disputes

* Real estate and construction defects * Employment and discrimination matters

Table One-ADR Disputes

Riordan legal shall review all disputes prior to implementation of the mediation process. A special mediator familiar with the type of dispute and technology involved will be selected.

* Strategic Partnerships International Transactions, Projects and Businesses * Technology Research and Development

* Licensing and Transfers * Proprietary and Confidential Information

* Consulting Agreements * Design and Engineering

* Construction and Management

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