Alternative Dispute Resolution (ADR)

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What is Alternative Dispute Resolution (ADR)?

Alternative Dispute Resolution (ADR) is a term for any procedure by which a dispute is resolved without going resorting to litigation. Simply put, it is a way to settle a conflict or claim outside the courtroom. Both parties must agree to an ADR before pursuing it. Methods of Alternative Dispute Resolution (ADR) usually involves the use of a neutral third party to help arrive at a solution. 

What kind of disputes or conflicts can be managed by Alternative Dispute Resolution (ADR)?

Alternative Dispute Resolution (ADR) is useful in a wide range of civil disputes, conflicts, or claims. Some examples of topics include but are not limited to the following:

Is it common to use an Alternative Dispute Resolution (ADR)?

Alternative Dispute Resolution (ADR) has been around for a long time and is widely used by individuals, groups, and organizations. In the United States, individuals who do not want to go into court over civil matters commonly opt for an ADR. In some cases, courts can encourage using ADR especially for lawsuits that have been pending for quite some time. Although reasons for resorting to ADR vary from person to person, using ADR instead of formal litigation is generally more cost-effective and time-saving. 

What are the advantages of Alternative Dispute Resolution (ADR)?

Compared to formal litigation, resorting to Alternative Dispute Resolution (ADR) can be beneficial to all parties. In general, the following are the perceived advantages of ADR:

What are common types of Alternative Dispute Resolution (ADR)?

Different states in the U.S. have different laws regarding ADR. It is important to note that rules and guidelines about ADR may vary, depending on the location. 

The following are the most common methods or types of ADR:

Negotiation

Negotiation is almost always the first ADR method to be used. It is simple and straightforward where both parties meet to settle the conflict or dispute. There is no involvement of a neutral third party. During the negotiation process, the disputing parties meet to identify the problem and explore possible avenues of resolution before coming up with an agreement. They handle the negotiation themselves. It allows both parties to have more control over the negotiation process and outcome.  

Mediation

In this type of ADR, both parties still work to settle their conflict. However, there is an impartial or neutral person who acts as a “mediator”. The mediator does not have any say or opinion on the outcome of the matter. The mediator’s responsibility is to help both sides communicate. Each party has the opportunity to voice their side and discuss how they can arrive at a solution themselves. Mediation is useful for disputes between family members or business partners where there is a relationship to be preserved.

Arbitration

Arbitration is similar to mediation in that there is a neutral third party involved. However, the difference is that the neutral person or “arbitrator” is the one who decides what the outcome will be. Even if there is a third party who will decide, arbitration is less formal than courtroom litigation. The arbitrator hears the arguments and concerns from both sides and considers all presented evidence before coming up with a decision. 

The arbitration may either be “binding” or “non-binding”. In binding arbitration, both parties must accept the arbitrator’s decision as final. There is no chance for an appeal. On the other hand, a non-binding arbitration means that each party is allowed to request a court trial if they do not agree with the arbitrator’s decision. 

Neutral Evaluation

A neutral evaluation involves a neutral third party who is usually an expert on the topic of the dispute called an “evaluator”. Both parties each have the chance to present their arguments, concerns, and evidence to the evaluator. Afterward, the evaluator then offers an opinion on the strengths and weaknesses of each disputing side. Additionally, the evaluator also suggests possible ways to resolve the conflict or dispute. The evaluator’s opinion is not binding. It is used by both parties to help them in settling their dispute themselves. 

Settlement Conferences

In a settlement conference, both parties, together with their lawyers, meet with a neutral person or a judge who is called a “settlement officer”. The settlement officer does not decide on the outcome. Instead, the officer assists both parties in weighing the strengths and weaknesses of the case and in negotiating a settlement. This type of ADR can either be voluntary or mandatory where it is mandated by a court before a trial starts.

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