Magazine article The CPA Journal

In-House Dispute Resolution Programs

Magazine article The CPA Journal

In-House Dispute Resolution Programs

Article excerpt

Being knowledgeable about in-house dispute resolution programs is important for CPAs because such programs can result in substantial savings for their firms and additional consulting fees for those in public practice. Corporations have discovered that ADR can be very helpful in resolving disputes as part of inhouse dispute resolution programs without the cost, anxiety, and publicity of litigation in matters involving employment, consumer complaints, product liability, and financial services. In fact, a recent General Accounting Office survey of companies found that approximately 80% reported using mediation and 19% using arbitration.

At a December City Bar Association panel discussion on the operation of inhouse dispute resolution programs, Joel E. Davidson, Esq., deputy general counsel of Paine Webber, and Joseph G. Williams, Jr., Esq., associate general counsel of the Equitable Life Assurance Society, explained how their firms' in-house dispute resolution programs worked. From the first year on these programs saved their firms substantial sums running annually into millions of dollars in out-of-pocket costs and salaries saved from not losing valuable staff time in protracted litigation.

Moreover, the public who dealt with these firms was found to be more satisfied with the way claims against these firms were handled and finally settled. In many cases, this resulted in the retention of valuable client and other relationships.

As is true for most in-house dispute resolution programs, Paine Webber and Equitable each had a program developed to meet their particular business needs and corporate cultures. However, there were many basic similarities which would also generally apply to other corporations or the clients and internal operations of CPA firms. CPAs in public practice, therefore, are in an excellent position to enhance the profitability of their practices by using it internally for disputes involving their firms and externally as consultants in helping clients set up their own programs. CPAs in private practice may bring the advantages of an in-house dispute resolution program to their companies.

A key benefit of an in-house dispute resolution program is that it enables the customer complainant to be heard promptly and in a more friendly way. Complaints are funneled into one department that is adequately staffed to quickly reply to the claimant and has the author ity to gather all the facts concerning the dispute. The first response is a letter acknowledging the complaint and giving a timetable for the sending of a more detailed response to the claim. The detailed response is sent promptly with the company's reply to the complaint after adequate facts have been gathered. It contains an offer to continue communications, if necessary. Many times, a complainant who is angry because of a perceived unnecessary loss becomes incensed by the lack of a prompt acknowl edgment and a reasonably current and meaningful response. The centralized complaint department also enables the firm to track the types of problems its customers perceive so that necessary remedial action can be taken. The tracking system will also reveal any employees who are causing numerous and, sometimes, unnecessary problems for customers. These employees can be retrained, reassigned, or, if necessary, terminated. …

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