Using Alternative Dispute Resolution
UPDATED: December 13, 2019
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Alternative dispute resolution (ADR) involves using a system, other than the courts, to resolve issues that would normally be resolved through litigation. Alternative dispute resolution takes several different forms, and can be a faster and less expensive manner of addressing legal matters. However, there may also be some downsides to alternative dispute resolution or “alternate dispute resolution,” as it is sometimes called.
Alternative dispute resolution takes several different forms. The most common include:
- Arbitration: This is a binding form of alternative dispute resolution where an independent third party arbitrator hears arguments from both sides and makes a decision on the issues. The parties must abide by the arbitrator's decision, although the decision may be appealed to the appellate court only if there were procedural errors or procedural bias in place. An arbitration clause is commonly included in contracts and courts will usually enforce these clauses and require the parties to arbitrate, unless the contract or terms of arbitration are grossly unfair. Arbitration may also be used by people in a divorce if they do not want all of their private financial information to become public record.
- Mediation: This is generally optional, and the parties can walk away at any point in time. The mediator's aim is not to make any kind of binding decision, and in fact, he will make no decisions at all. Instead, the mediator just helps the parties to try to come to an agreement among themselves.
Advantages and Disadvantages of ADR
There are plenty of advantages to alternative dispute resolution. Disputes can be resolved more quickly and usually less expensively than in the courts. Further, when the dispute is about something technical, it can be submitted to an arbitrator with a greater understanding of the issues than the court might have. However, there are some disadvantages to alternate dispute resolution as well. The main disadvantage is, when arbitration occurs with a company, there may be an inherent bias for the corporate party over the individual since the corporation is a repeat customer. Another disadvantage may be that the remedies are more limited.
If you are resolving a legal issue through alternative dispute resolution, you should have a lawyer on your side to make sure your legal rights are protected.