Chapter

30
Dispute Resolution

30.1 The Legal System

30.2 Other Redress Solutions

2010 South-Western, Cengage Learning

Lesson 30.1

The Legal System

GOALS
Describe the structure of the legal system
in the United States.
Explain the legal procedures from
complaint to judgment.

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Structure of the Legal System
The legal system in the United States is
built on several sources of law, including
constitutional law, statutory law, agency
law, maritime law, and common law.
Common law is a system of laws based
on decisions made in court cases.
These decisions set legal precedents,
which serve as models for deciding
similar cases in the future.
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The Courts
There are many types of courtsfederal, state,
and local.
Each court is empowered to decide certain
types or classes of cases.
Trial courts have original jurisdiction, they are
the first court to hear a case.
Appellate courts are said to have appellate
jurisdiction, or the authority to review the
judgment of lower courts.
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Court Cases
A civil case involves one person who has a
dispute with another person or entity.
A criminal case involves a government unit
who is accusing an individual of committing a
crime.
When a law has been broken, a prosecutor
files criminal charges against the accused
person.
The losing parties may appeal the decision of a
civil or criminal court if they believe the court
made an error in applying the law.
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Court Personnel

Judge
Clerk of court
Court reporter
Bailiff
Jury

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The Three-Tiered Court System

Both the state and the federal levels have

a three-tiered court system.
It starts with the trial court level.
Cases are then appealed to the appellate
court level.
Finally cases can be appealed to the
supreme court level.

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The Federal Court System

U.S. District Courts

These are the trial courts at the federal level.
The United States is currently divided into 94
federal districts, with a court assigned to
each.

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 (continued)
The Federal Court System
U.S. Courts of Appeal
The United States is divided into 12 judicial
circuits.
Each circuit has a court of appeals.
Each appellate court has a panel of judges
who review final decisions of the district
courts.
The decisions of the courts of appeal can be
appealed to the U.S. Supreme Court.
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 (continued)
The Federal Court System

The United States Supreme Court

The U.S. Supreme Court is the top court of
the federal court system and is located in
Washington, D.C.
There are nine Supreme Court justices,
including a chief justice.

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Special Federal Courts
Congress established special courts to
hear only particular kinds of cases.
These special federal courts include the
Court of Claims, Customs Court, Court of
International Trade, Tax Court, Court of
Military Appeals, and the territorial courts.
If you want to sue the United States, you
would file a claim in a U.S. district or
special federal court.
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State Court Systems
District and circuit courts
General trial courts, often called state district courts,
circuit courts, or superior courts, decide matters that
can be appealed to higher courts.
These courts hear civil cases involving large sums
of money, criminal matters with major penalties, and
cases that are appealed from local courts whose
decisions are questionable.
Judges at this level are usually appointed by the
governor, although some may be elected.
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 (continued)
State Court Systems

State courts of appeal

Most states also have an appellate court
level, where trials at the state level can be
appealed.
A panel of judges renders a decision or
refuses to hear the cases, whereupon they
may be appealed to the next level.

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 (continued)
State Court Systems
State supreme courts
In most states, the highest court is the state
supreme court, sometimes called the court of final
appeal.
Ordinarily, the state supreme court has appellate
jurisdiction.
The decision of a state supreme court is final,
except in cases involving the federal Constitution,
laws, and treaties.
These decisions can be appealed from the state
supreme court to the U.S. Supreme Court.
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County and City Courts

Municipal or justice courts

These courts have authority limited by
geographic boundaries.
Civil and criminal cases are heard at the
local level.
Disputes usually are heard and decided by
judges.
A judge may be called a justice of the peace.

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 (continued)
County and City Courts

Special courts at the local level

These courts may be called police courts,
traffic courts, small claims courts, and
justice-of-the-peace courts.
Generally, the types of cases heard in
special courts cannot be appealed to a
higher level.

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Court Proceedings

Filing a lawsuit involves many steps,

costs, and possible outcomes.
The statute of limitations is a legally
defined time limit in which a lawsuit may
be filed for various complaints.
Generally, a lawsuit involves the following
four phasespleadings, discovery, trial,
and appeal.
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Pleadings
In the pleadings phase, documents are filed.
The complaint is a document outlining the
issues of the case and the relief (damages)
that the plaintiff requests.
The plaintiff is the person who brings a lawsuit by
filing the complaint.
The defendant is the person against whom the
lawsuit is filed.
A counterclaim is an accusation that the
plaintiff is at fault and should pay damages to
the defendant.
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Discovery
In the discovery phase, attorneys gather
information, talk to witnesses, prepare legal
arguments, take depositions, perform
investigations, examine reports, and negotiate
with the opposing party.
The purposes of discovery are (1) to preserve
evidence, (2) to eliminate surprise, and (3) to
lead to settlement.
A deposition is a sworn statement of a witness
that is recorded and often videotaped to
preserve the memory of the issues at hand.
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Trial
The trial phase begins with the setting of a
court date.
For a jury trial, the first step is jury selection.
Jury selection is followed by opening
statements, presentation of evidence, and
closing arguments.
The jury deliberates and then reaches a
decision, called the verdict.
A judgment is the final court ruling that
resolves the key issues and establishes the
rights and obligations of each party.
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Appeal

The final phase begins if the losing party

files an appeal.
An appeal is a request to a higher court
to review the decision of a lower court.
Appeals are based on errors of law made
at the trial court level that led to the
verdict.

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Lesson 30.2

Other Redress Solutions

GOALS
Define remedies available to consumers
other than individual lawsuits.
Explain alternative dispute resolution
(ADR) options.

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Self-Help Remedies

Lawsuits are lengthy, expensive, and

emotionally draining. If you have a
consumer problem, pursue a settlement
yourself before deciding to sue.
In many cases, when you approach the
other person with your side of the
dispute, you can resolve the issue
without taking further action.
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Informal Discussions

Withholding payment
Returning or refusing merchandise
Disputing a charge
Disputing a charge generally means that
you are asking the credit issuer to reverse
the charge on your account.

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Small Claims Court

A small claims court is a court of limited

jurisdiction.
It decides small matters quickly with a
minimum of cost, and the decision is
final.

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Class-Action Lawsuits

A class-action lawsuit is one in which a

large number of people with similar
complaints against the same defendant
join together to sue.
Such lawsuits often involve products that
injured many people, and the defendant
is the products manufacturer and others
in the supply chain.
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Governmental Assistance

You may wish to seek help from a

government agency to stop some
objectionable practice and help you get
your money back.

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Alternate Dispute Resolution
Alternate dispute resolution (ADR) is a
general term covering several other
formal methods of settling disputes
without using the court system.
The services provided in ADR are not
free, but they are much less expensive
than taking a case to trial.
State-certified professionals can help you
with negotiation, mediation, or arbitration.
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Negotiation
Negotiation is the process of finding a
solution that is acceptable to both sides.
A neutral third party, called a negotiator,
assists the parties.
Often a negotiator is needed because the
parties cannot meet together due to
strong emotions that would prohibit them
from talking out the problem without
yelling or other disruption.
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Mediation

When the parties cannot negotiate a

settlement, the next level of ADR is called
mediation.
Mediation is a dispute resolution method
in which an independent third person, a
mediator, helps the parties to reach a
solution in a controlled environment.

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Arbitration
The highest level of ADR is arbitration.
Arbitration involves an independent third
person, called an arbitrator, who helps resolve
the dispute.
In voluntary arbitration, the arbitrator listens to both
sides and makes a recommendation but cannot
impose it.
With binding arbitration, the arbitrator makes a
decision that is binding on the parties.

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 (continued)
Arbitration
Labor disputes are often settled with arbitration
deals.
Many labor contracts specify that in the event the
employee feels that the employer has done
something illegal (or against the terms of the labor
contract), they will submit to binding arbitration.
If the employee works for the state or other
contracted employer, the employee would begin the
process by filing a complaint called an unfair labor
practice (ULP), which is formal notification to the
employer.

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