Alternative Dispute Resolution- What is It and When to Use It

Alternative Dispute Resolution, or ADR, is a collective term which encompasses a variety of methods for dealing with disputes and conflicts. However, the most distinctive feature of ADR is the act of resolving disputes without taking matters to court. 

The ADR process steers clear of litigation and instead utilizes negotiation, mediation and arbitration as methods to resolve disputes. In addition to be less of a hassle and a quicker route to resolution than going through the court system, ADR is also less costly. 

Companies and individuals are seeing the wisdom of using Alternate Dispute Resolution, for both professional and personal matters. ADR helps people to resolve matters in house before they become matters of public record. 

Another benefit of using ADR rather than litigation is that it allows for a more collaborative approach. ADR helps parties understand each other better, let go of the animosity, protect each other’s position and reach a mutually beneficial agreement. 

By opting for ADR, parties have the liberty to arrive at more creative solutions than one may reach via a court decision. Let’s look at the terms that are a part of the Alternative Dispute Resolution processes. 

ADR- Common Terms and How They Work 

ADR procedures involve an impartial third-party who facilitates the settlement of matters outside of the court system. If two parties wish to resolve their conflict without going to court, they may mutually decide to allow the involvement of an impartial third party to help solve matters. That third party may utilize one of the methods listed below:

    i. Arbitration 

In arbitration, the parties appoint an arbitrator who steps in to hear both the parties out, collects evidence concerning the dispute and makes a decision once they have reviewed all of the evidence. This process of ADR is quite similar to a court ruling however, the parties can decide on a non-binding or binding arbitration as they please. 

In case of a binding arbitration, both parties have to adhere to arbitrator’s decision as the enforceable and final one. In case of a non-binding arbitration, both parties consider the arbitrator’s ruling as advisory and may or may not agree on it. 

    ii. Mediation 

Mediation is when a third-party steps in independently to help resolve a dispute between two parties. The goal of mediation is to arrive at an outcome that is mutually acceptable for both disputing parties. 

The mediator in this situation does not make a ruling or decision about who is right and wrong in the matter. Rather, the primary role of a mediator here is to add structure and to facilitate the interaction between the parties concerning their dispute. The mediator assists the parties in reaching a mutually acceptable resolution.

Alternative Dispute Resolution - When to Use it

There is no established timeline during which the disputing parties must use ADR. Parties can choose to use ADR any time they wish to. In fact, even in court cases a mediation may be suggested as an approach before the court case begins. 

It is greatly beneficial to try resolving matters first through ADR before pursuing costlier and lengthier legal processes. Moreover, it helps protect the reputation of both parties because ADR is a more private proceeding. The public hardly gets to hear the outcome of ADR proceedings. 

ADR is also a way to save vital business relationships. If parties that have a conflict will continue to have a business relationship after the conflict is resolved, ADR may help them come to a mutually agreeable decision about how to proceed which would salvage their working relationship in the future. 

Final Thoughts 

Alternative Dispute Resolution is a less formal, less costly and less rigid way of dealing with disputes for the parties who are experiencing a conflict. ADR creates a neutral environment, involving an impartial third-party person or panel to resolve workplace or personal disputes that helps parties to reach mutual resolutions. 

The use of ADR to resolve disputes has become more common now around the world as it provides many advantages and creative solutions to parties who need help resolving conflicts.