Eth 321 - the Role and Functions of Law

The Role and Functions of Law

Nathan E. Wehner

ETH/321

Christine Benway

January 11, 2016

The Role and Functions of Law

The role a strong legal system plays in today’s business environment is important to ensure a healthy relationship between business and consumer. Most laws and court procedures that pertain to business fall under this category; federal law and state law included. Federal law creates the foundation for every business in the United States. Federal courts deal with any business legalities concerning constitutionality of a law, any disputes between two or more states, and bankruptcy. State court systems deal with any litigations the do not fall under the federal categories. The court systems are structured in a manner that follows this process. The state court system is a subsidiary of the federal court system. The federal court system is the holder of the judicial power in the United States and is comprised, currently, of the Supreme Court, thirteen U.S. Courts of Appels, ninety four District Courts, the Court of Claims, and the Court of International Trade (Comparing Federal & State Courts.). State court systems are given lesser judicial powers and are given the ability to create courts pertaining to their needs.

The judicial power of the federal court describes a distinct ability for this branch to use in order to keep the legislative and executive branches in check. This ability is the process of judicial review which allows courts with this power to make laws that are either unconstitutional or are incompatible with higher authorities.

An example of the division between federal and state laws pertaining to business is with the pharmaceutical business. The most prominent federal law that affects pharmacies across the United States is the Health Insurance Portability and Accountability Act otherwise known as HIPAA. This act was passed to reduce health care fraud and abuse and institutes standards for health care information which include how patient information is stored, transferred, handled, and disposed of in pharmacies (HIPAA. 2010). A state law that correlates to HIPAA would be the laws requiring official training and certification by the pharmacy board in order to handle patient information and dispense controlled substances through a pharmacy. The two systems work in tandem in order to assure compliance with mandated regulations.

Alternative dispute resolution, or ADR, is a form of conflict resolution that stays out of the court systems in order to give the participating parties more control of the outcome of their dispute. Some examples of this include mediation, arbitration, and negotiation. Mediation uses a third party to mediate a discussion between two parties in order to help them reach a decision. The mediator is not allowed to make decisions for either party or start conversation topics, but simply is there to make sure the parties focus on creating their own conclusion. The terms of mediation are usually non-binding. Arbitration is a more formal of ADR where the third party acts as a sort of judge where at the end of “trial” makes the decision for the parties. While being more formal, the decision is still usually non-binding which allows the parties to go into litigation if they still do not agree on the terms. Negotiation is a more traditional form of ADR where the two parties negotiate their terms and conditions with each other in order to form a compromise. Each form of ADR has distinct pros and cons, but the main idea behind ADR is that it allows the parties to come to a more mutual conclusion rather than having a court, typically, make a decision favoring one or the other ("Types Of Alternative Dispute Resolution (adr)", 2013).