Alternative Dispute Resolution

Discuss the different types of alternative dispute resolution that could be used to avoid litigation. In your role as a paralegal or legal assistant at eHarbour, give a recommendation on which form of alternative dispute resolution you think would be best in this situation and explain your recommendation.

Daniel Hudson, the general counsel of eHarbour, has received a letter from a dissatisfied eHarbour user. The user downloaded the eHarbour app to his phone and used the navigation software to compete in a local regatta. The user claims that the app stopped working during the regatta when he was leading the race and that he ended up placing fourth rather than winning the regatta. An internal investigation shows that the software indeed had a temporary service outage on the day of the race for approximately 10 minutes for selected users. The customer is demanding $100,000, including the $5,000 prize awarded to the first-place winner, and emotional damages in the amount of $95,000 for not winning the race. The company is worried about the bad publicity with a lawsuit but does not want to pay such a large settlement.

Answer the Questions Below:

Having recommend negotiation as our initial attempt at dispute resolution. How would we approach his request for $95,000 in terms of emotional damage? Certainly, we want to avoid bad publicity, but is $95,000 reasonable?

You also mentioned arbitration, presumably as a backup? At what point would we turn to arbitration? Why would this be better than continuing with negotiations that may not be moving forward?