What is an Alternative Dispute Resolution?
To avoid going to court, parties might use alternative dispute resolution (“ADR”) techniques.
Alternative dispute resolution (ADR) is a catch-all term for any procedure or set of procedures used to settle a dispute that does not involve the government. Mediation, arbitration, conciliation, negotiation, and transactions are the most well-known forms of alternative dispute resolution.
All forms of alternative dispute resolution (ADR) have a similar feature in that they allow the parties to reach legally binding resolutions to their disputes outside the typical legal/judicial procedures. Still, they do so following distinct sets of rules. Different from mediation and conciliation, in which a neutral third party is brought in to facilitate agreement, there is no such person in negotiation.
The involvement of the neutral third party (the arbitrator or panel of arbitrators) is crucial in arbitration because the arbitrator’s verdict is final and binding on the parties. In contrast, in both conciliation and mediation, the third party does not have the authority to force their conclusion on the parties involved. Since the parties often employ more than one kind of alternative dispute resolution (ADR), comparing and contrasting them is not helpful. Therefore, ADRs function on several levels and are synergistic.
Potential Advantages of Alternative Dispute Resolution
- ADR is quick: Non-adjudicatory dispute resolution techniques are quick, save time, and avoid the inconveniences and uncertainties of adjudicatory proceedings, making them preferable to adjudicatory procedures for resolving legal disputes.
- ADR is cost efficient: This indicates that the expenses expended by the parties in resolving their dispute via ADR will be lower than those incurred through litigation.
- ADR is adaptable since the disputing parties get to choose the norms of procedure that will govern their case, they don’t have to give up the ability to determine their rights to an adjudicator, and they may choose who will act as their mediator or arbitrator. Unlike in court, there are no standards of evidence, no witnesses, and no lengthy delays while using ADR.
- The arbiter a neutral third party in an arbitration proceeding with subject-matter expertise (as befits a specialist in the dispute at hand) and prior experience with the arbitration process. This means that, unlike in the adjudicatory process, where a judge may be unfamiliar with specific technical details of the matter, he will be able to reasonably and efficiently apply the law.
- ADR encourages collaboration since it enables the parties to work together with the impartial arbitrator or mediator to resolve the conflict and reach an agreement on a satisfactory remedy for both sides.
- Another advantage of ADR is that the parties to the dispute may keep the details of the proceedings secret, including any agreements, struck during mediation or arbitration. Since most trials and hearings in an adjudicatory method are public and accessible to the press, this is not practicable. By keeping their conflict private, ADR helps individuals to concentrate on finding a solution rather than worrying about how the public will react.
- All parties in the ADR get a chance to have their say and shape the result of the proceedings. This might entail anything from presenting their side of the story to offering suggestions for a cure. This cannot be obtained via the legal system.
Disadvantages of Alternative Dispute Resolution System
There is no one approach that is entirely free of flaws. One alternative dispute resolution procedure won’t work if the parties pursue that route. Given this, the following are some of the drawbacks of alternative dispute resolution:
- A binding ADR method does not allow for an appeal of the result unless a specific appeals mechanism is included in the agreement or some other exceptional case. One arbitrator “going rogue” might severely restrict your options for resolving a dispute. Likewise, mediation is not legally enforceable, but a lousy mediator might still squander a day or two.
- Lack of trustworthiness: both sides are looking for “neutrals” who would best support their stance, so it’s not surprising that neutrality is somewhat of a moving target. Each party is expected to choose their arbitrator, with the service selecting the panel chair. You can expect that each party’s chosen arbitrators will have a bias toward that party’s stance.
- Settlement discussions and mediation are nonbinding unless the parties agree to use a binding method. It is no guarantee that the process will result in a settlement, and a side is permitted to say “no” or back out of any agreement.
- In practice, the ADR procedure may be slow since getting the parties’ approval before beginning the process takes a lot of time.
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Seppi Esfandi is an Expert Attorney who has over 21 years of practice defending a variety of cases.