ALTERNATIVE DISPUTE RESOLUTION IN MUSIC LAW: Examining The Use of Arbitration and Mediation to Resolve Disputes In The Music Industry, Including Advantages and Challenges to Litigation

Alternative dispute resolution (ADR) is an umbrella term which includes mediation and arbitration. Mediation is a form of ADR, which offers the parties an ‘out of court’ forum to solve their dispute with the assistance of a neutral, the mediator. The approach is similar to contract negotiation, is less confrontational and its distinctive for a ‘win-for-all’ approach. Differently arbitration is a more formal form of ADR, where an arbitrator (or a tribunal), solves a dispute on the facts in front of them,under the law chosen by the parties.
Arbitration is a a valuable tool in the music industry for several reasons. Firstly, it is a private
and confidential process that values the privacy of artists and other industry professionals. Secondly, arbitration is more efficient and cost-effective than traditional litigation, making it an attractive option for parties who want to resolve disputes quickly and without spending a lot of money on legal fees. Thirdly, arbitration provides a more specialized and knowledgeable forum for resolving disputes in the music industry, as arbitrators are often experts in the field and can bring a unique perspective to the dispute resolution process. Finally, arbitration is more flexible than the traditional litigation, as parties can often agree to tailor the process to their specific needs and preferences.
ADR mechanisms are promoted for numerous advantages including;
- A single procedure
- Party autonomy
- Neutrality of forum
- Confidentiality of disputes
- Finality of awards
It can be argued here that the general preference for ADR over traditional litigation notwithstanding, there are fewer ADR advantages for individual artists (independents, not-signed talent), who lack the know-how in IP or contract law, or are unfamiliar with the ADR process. Artists who are signed by Record Labels are more likely to have the infrastructure and support needed to gain access to ADR processes. To illustrate, an artist, who has a recording contract with a Record Label, will have the support of the business services, accounting, marketing, public relations (PR) or access to a legal team.
In the music industry, parties agree which ADR method to resort to, whether it may be mediation or arbitration. In some situations, contracts include a binding ADR clause, which can either be standard or inserted by the parties, even after a lawsuit has been filed. An example of an ADR clause can be formulating in the following manner: “All disputes arising under this agreement shall be resolved by binding arbitration before [number of arbitrators] in [name of the seat] The Award of the arbitrator shall be final and can be enforced in any court in [name of the state]. The prevailing party shall be entitled to recover his or her reasonable attorney’s fees”. An interesting fact to note is that individual arbitrators and mediators can be chosen by the binding contractual clause, meaning that retired judges can find an opportunity to work as arbitrators or mediators for private music companies.
ADR is most commonly used to manage the artists-label relationship. All kind of dispute can be covered, from creative control to managing style. The parties can choose to implement the following options:
- Prevention and cooperation, e.g. creating an ADR clause
- Negotiation
- Standing neutral, i.e. parties use the help of a neutral agent to solve the dispute
- Non-binding solution: e.g. mediation, arbitration etc.
- Private-binding solutions
- Litigation.
Each one of these options are considered based on five criteria: cost, duration, impact on the relationship, effectiveness, publicity of the conflict.
An interesting case law to present is the Graham v Scissor-Tail Inc. US opinion of the Supreme Court of California. The case is between the American promoter Bill Graham and the Scissor-Tail, the company owned by the defendant C. Russell Bridges, who is an artist and performer. When the plaintiff and defendant had first started to collaborate, they signed four contracts. One of these contracts contained a clause which stated that all disputes had to be submitted, heard, arbitrated an determined. The determination was to be conclusive, final and binding to the parties. When the case was first brought to arbitration, the full award claimed by Scissor-Tail was issued against Graham. The case was then brought to a superior court, which confirmed the arbitral award. However, the Supreme Court of California addressed two issues: 1) whether the parties signed a contract of adhesion and 2) whether the arbitral award was enforceable. The conclusion was that considered the contract was of adhesion but not enforceable, therefore the award was unenforceable and the court reversed the judgement.
This case teaches us that it is not easy to handle difficulties that come in the entertainment industry. In fact, an interesting quote by Dr. Kalyan Chakravarthy Kankanala, Indian IP lawyer, who stated “Entertainment law is not as entertaining as entertainment”. My personal interpretation of the quote is that entertainment, and art in general, is much more enjoyable when disputes are solved as peacefully and quickly as possible. Therefore, this is the reason why it is important for the parties to clarify all the ADR clauses and other legal aspects of the collaboration before signing the contract.