When to Use Mediation & Arbitration.

Consider the following step-by-slep approach when incorporating mediation and arbitration as part of your risk management:

* Mediation for all disputes: Our GAMICO claims experience has shown that mediation is often an effective tool in many professional liability disputes and engagements. It may lead to quicker resolutions of small matters and is often a productive tool in furthering settlement efforts in large claims. GAMICO therefore recommends mediation for all disputes and engagements.

* Binding arbitration for fee disputes only: Our claims experience indicates that binding arbitration is often beneficial to GPAs in successfully resolving disputes over fees, but it is not advantageous (and often disadvantageous) to GPAs in high-dollar, complex accounting professional liability disputes, particularly attest engagements involving banks and other third parties. Why? Because the best defenses (lark of reliance, lark of causation) available to CPAs often require extensive discovery which is usually limited in arbitration. Consequently, GAMICO has found that binding arbitration for all disputes often exposes firms lo substantially greater risk. Best practice is to not give up your ability to litigate disputes that could be significant in nature and to tin...