Alternative Dispute Resolution

Alternative Dispute Resolution (or “ADR”) refers to opportunities for dispute resolution outside of the traditional court system. While there are many ADR techniques available, most fit into three broad categories: negotiation, mediation and arbitration. Invaluable for small businesses, ADR could save you and your business money and time spent on litigation. It is also a way to address disputes privately, effectively, and can be less damaging for relationships. The parties have more opportunity to control and contribute to the dispute resolution process and therefore have higher incidents of satisfaction, empowerment and closure.

ADR Techniques

In negotiation, parties of a perceived dispute work towards a solution that everyone can accept. This involves compromise and establishing common ground while trying to protect the underlying interests. Mediation is similar to negotiation but a neutral third party facilitates the process. A little less control is left with the parties than with negotiation but a mediator cannot impose a decision on them and a party can choose to walk out at any time. Mediators are excellent at facilitating discussion, narrowing issues, and engaging in a principled analysis. Most like court, arbitration involves a neutral third party who can impose a binding decision on the parties. Arbitration tends to be more restricted in the kinds of solutions available to parties but it does guarantee that the process will result in a decision.

Lawyers recognize the opportunities provided by these techniques for dispute resolution and help their clients choose whether a traditional court proceeding or ADR is the best option.

The Formal Justice System: Cost

The formal justice system is criticized for excessive cost and delay. Not only is this an access to justice issue across the board, it means that a person’s or company’s wealth can have a serious impact on the type of experience the justice system offers. One effect of high litigation costs is the increase in self-represented litigants. Without legal training, self reps often struggle with the technical and procedural elements of litigation and disputes can face even more unnecessary cost and delay.

The Formal Justice System: Adversaries

While useful for searching out the truth, the adversarial system puts parties in opposition to one another. This can exacerbate negativity between the parties and can encourage feelings of victimization and vindication.

The Formal Justice System: Results

The options available to judges settling disputes are limited. One party wins while the other loses and there is no real opportunity for tailored outcomes or dynamic problem solving.

The ADR Difference

Various ADR techniques can go a long way in alleviating these problems. In many respects, ADR allows for the parties to control the outcomes. It attempts to keep party interests and principles at the forefront while allowing more flexibility and creativity for dispute resolution. To top it all off, ADR is much more efficient and affordable than traditional litigation.

If your business becomes a party to a dispute – consider alternative dispute resolution. It could mean all the difference.

This article is intended for information purposes only and is not intended to be legal advice.  We suggest you contact a lawyer for advice on your particular business and circumstance.