What is Alternative Dispute Resolution (ADR)
Alternative Dispute Resolution (ADR) is a process for settling disputes without litigation, and includes arbitration, mediation, or negotiation. ADR processes are usually less costly and more expeditious than litigation. ADR is increasingly being utilized in disputes that would otherwise result in litigation, including high-profile labor disputes, community disputes, divorce actions, and personal injury claims. As court cases increase, rising costs of litigation, and time delays continue to plague litigants, more states have begun experimenting with ADR programs. Some of these programs are voluntary; others are mandatory. ADR typically includes early negotiation, arbitration, mediation negotiation. ADR is an attractive path for individuals to resolve disputes as well.
Arbitration a process where an impartial third party, or panel. hears each side of a dispute and issues a decision. Arbitration is more formal than a Mediation and resembles a simplified version of a trial involving limited discovery and simplified rules of evidence, hearsay may be admissible in an arbitration. The parties may agree to have the decision be binding or non-binding. An Arbitrator does not have to be an attorney, parties can select arbitrators from other fields that they consider more suitable for the resolution of the dispute. For example, parties can choose an arbitrator with a financial services background to arbitrate a Investment related dispute.
Mediation is more of an informal alternative to litigation and brings opposing parties together and attempts to work out a settlement or agreement that both parties accept. A form of conflict resolution in which a neutral individual attempts to assist the parties to find a compromise acceptable to both. Distinguished from arbitration because it concentrates more on the search for terms acceptable to both parties and less on the legal resolution of their disputes.
Negotiation gives parties maximum control over the outcome. They direct the give and take necessary to reach a settlement. Thus, the result is most likely to meet their individual needs. Negotiation works best when disputants are willing and able to talk about their dispute and to compromise on their differences. As with mediation, negotiation is based on the voluntary disclosure of information and good faith participation of the parties. It is the preeminent mode of dispute resolution. The major disadvantage is that the parties need to deal with the issues related to the dispute with each other. Negotiation may not be appropriate if one of the parties is in a position of power or control over the other.