Alternative Dispute Resolution
The legal conflicts that businesses most often face are contract disputes, financial disputes, and employer-employee issues. If your business is facing such a conflict, it will be encouraging for you to know that most of these disputes can and are resolved without going to court. Alternative dispute resolution (“ADR”) can save your business a lot of time and money if you utilize it as a means to resolving your legal issues. There are many kinds of ADR, but the most commonly used are negotiations, mediations, and arbitrations.
In a negotiation, the parties involved in the dispute, or their attorneys, communicate directly with each other to try reaching a mutually agreeable resolution.
In mediation, a neutral third-party (the mediator) serves as a middleman in a confidential process. Each party spends time alone with the mediator engaged in a discussion aimed at finding a way to resolve the conflict. The mediator switches between the parties communicating possible resolutions until an agreement is made. A mediator generally does not have the power to decide the case if an agreement is not reached.
In arbitration, a neutral arbitrator is the one that makes the final decision after reviewing presentations from both sides. The presentations usually include documents and witness testimony related to the dispute. If the arbitration was set up by a court, the arbitrator’s decision may be binding, meaning that the case will not proceed to trial. If the arbitrator’s decision is non-binding, however, the parties will still have the option to take their case to trial.
Alternative Dispute Resolution can be used instead of filing a lawsuit, or if a lawsuit has been filed, it can help avoid trial. Unless mandated by a court, the parties can usually pick which type of alternative dispute resolution to pursue. In addition to resolving a dispute faster than is possible in court, alternative dispute resolution has many other benefits. It is often less costly and time intensive, it is usually confidential, and it can help preserve relationships through better communication.