Litigation occurs when a party, the plaintiff, files suit against another party, the defendant. There can be more than one party on either side of a lawsuit. A party may consist of either an individual or a corporation. A lawsuit is brought when a party perceives that a wrong has been committed and seeks damages against the opposing party, usually for monetary damages. Sometimes, the defendant may also file a claim against the plaintiff, known as a counter-claim, if the defendant believes that he or it has been wronged by the Plaintiff. By law, there are certain time limitations within which a plaintiff must file suit, or else the plaintiff will be forever barred from exercising its legal rights and recovering. On the flip side, a defendant must respond to a lawsuit within a certain time or else risk a default judgment being rendered against the defendant. Thus, both parties to a lawsuit need to take the lawsuit seriously and should seek legal representation as soon as possible in order to protect their respective interests.

Lawsuits can settle at any time prior to trial. In Harris County, the district court judges usually order mediations in an attempt to get parties to resolve cases on the courts’ dockets without the necessity of a trial because this is more expeditious and less costly. Mediators are appointed to handle the mediations. A mediator is an attorney who is a neutral third party who facilitates communication among the parties, identifies key issues and interests, and encourages settlement.

Another way that a case may be resolved is through arbitration. Like mediations, arbitrations are out of court proceedings. However, arbitrations are unlike mediations in that they are like mini trials where witness testimony and evidence are introduced. There are some disadvantages to arbitration. Arbitrations are usually binding, meaning that the decisions of the arbitrators are final and not appealable. And, arbitrations are much more costly than mediations. The need for arbitration arises when an arbitration clause is part of a contract. An example of an arbitration clause is as follows:

“All claims and disputes arising under or relating to the Agreement are to be settled by binding arbitration in the state of Texas. Any decision or award as a result of any such arbitration proceeding shall be in writing and shall provide an explanation of all conclusions of law and finding of fact and shall include the assessment of costs, expenses, and reasonable attorneys’ fees.”

Arbitration clauses can be found in the fine print of certain contracts, including insurance contracts and credit card agreements.