Peer-to-Peer Blog: Agents, Consider Arbitration and Mediation

Thomas K. Crowe, Partner,

Law Offices of Thomas K. Crowe, P.C.

An agency business is constructed upon contractual relationships, particularly with underlying carriers and/or master agents. This means that the fate of the agency is vitally tied to those core agreements. This blog briefly addresses the arbitration provision in agency agreements. An agent should decide as a matter of general strategy whether it favors dispute resolution through recourse to traditional litigation or alternative dispute resolution means (such as mediation or arbitration).

Agent agreements often contain dispute-resolution provisions that spell out the recourse available to a party in the event of a dispute. Mediation is the involvement by an independent third party in negotiations to settle a dispute. Mediators assist parties in reaching a settlement but do not have the power to decide an issue. Arbitration, by contrast, is the referral of a dispute to a third party empowered to make a decision that normally is binding on the parties. Arbitration is similar to traditional courtroom determinations in that it results in a resolution imposed by an outside party rather than one chosen by the parties themselves, but it differs from traditional litigation in that there is greater flexibility in choosing the deciding third party and the procedures that will be followed. In todays environment, courts are increasingly encouraging parties to submit cases to arbitration or mediation.

Agents, particularly smaller ones, can be well-served by mediation or arbitration. These alternative dispute-resolution techniques can go a long way toward reaching a settlement of issues so that the underlying relationship can be preserved. More importantly, mediation and arbitration can reduce legal fees, thereby defraying the inherent advantage that many larger carriers possess by virtue of their deep pockets” in a dispute context. Agents would be well-served to consider appropriately customized mediation or arbitration provisions in their agreements.

A 25-year veteran of communications legal practice, Thomas H. Crowe represents varied providers of communications services, including VoIP providers, prepaid calling card providers, MVNOs and resellers, as well as communications agents and distributors. Crowe is a former partner with a major national law firm and before that worked for the legal department of ITT Communications Services Inc. He received his doctorate in law from George Washington University Law School in 1982 and his bachelors degree from New York University in 1979 where he was elected to Phi Beta Kappa. Crowe is an AV-rated attorney. He also is a member of the
2010-11 Channel Partners Advisory Board .