April 23rd, 2023
April 23rd, 2023
Alternative Dispute Resolution, also known as ADR, is the use of methods such as mediation and arbitration to resolve a dispute rather than litigation. ADR is a way to settle disputes without having to engage in an often long, confusing, and complicated court process. Using ADR methods can help parties avoid the acrimony that often accompanies extended trials and allows parties to understand each other's position as they craft their own solutions that work for both of them. This guide will explore the various forms of ADR and will examine which methods would be most useful under which circumstances.
Alternative Dispute Resolution (ADR) describes processes that offer alternatives to litigation (filing and proceeding with a lawsuit in court) and provides opportunities for early and fair resolution of conflicts with the parties having control over the final outcome. Methods of ADR include, but are not limited to, mediation, arbitration, facilitation, early neutral evaluation, and settlement conferences. The purpose of ADR is to facilitate settlements and agreements on issues defined by the parties themselves.
Despite historic resistance to ADR by many, ADR has gained widespread acceptance among both the general public and the legal profession in recent years. In fact, some courts now require some parties to attempt ADR of some type, usually mediation, before permitting the parties' case to be tried. The rising popularity of ADR can be explained, in part, by the increasing caseload of traditional courts, the perception that ADR is less costly than litigation, a preference for confidentiality, and the desire of some parties to have greater control over the selection of the individual or individuals who will decide their dispute.
In traditional litigation, after a lawsuit goes all the way through trial, even the winners may feel that they have lost. The costs and time commitment on both sides may be enormous. Sometimes, neither side is satisfied with the result. Relationships that may have existed between the parties are likely to have been severely strained. On the other hand, ADR may help parties settle all or part of their dispute much sooner than a trial while helping them reach a mutually acceptable solution that a court might not have the power to order. ADR can also save the parties time and money. This all results in increased satisfaction and results in a long-lasting resolution that both parties can have an easier time accepting and sticking to.
ADR also creates more flexibility, control, and participation. In formal litigation, the court is limited in the procedures it must follow and the solutions it can reach. ADR processes are more flexible and permit parties to participate more fully in a wider range of ways. They give parties more control by providing opportunities to:
In traditional litigation, the parties may stop communicating directly. Often, it is only after a significant amount of time and expense that the parties come to understand how their dispute can be presented in the legal system. ADR can expedite the parties' access to information and can help them obtain an earlier and better understanding of the legal aspects of their case. It may:
Due to its adversarial nature, litigation can increase the levels of tension, and often hostility, between parties. These escalated barriers to communication can hamper chances for a settlement. In contrast, the neutrality of ADR may:
The most common forms of ADR for civil (non-criminal) cases are facilitation, mediation, and arbitration.
Facilitation is one of the least formal types of ADR procedures available. In facilitation, a neutral third party works with both sides to reach a resolution of their disputes. Facilitation assumes that the parties would like to reach a settlement with each other and are entering into the process with that shared goal. The negotiations are often done through telephone calls, written correspondence, and/or email. Facilitation is sometimes used by judges at settlement teleconferences exploring alternatives to taking a dispute to trial.
Mediation is more formal than facilitation but still leaves control of the outcome to the parties. In mediation, an impartial party, known as the mediator, helps the parties try to reach a mutually acceptable resolution to their dispute. The parties control the substance of the discussions and any agreements they reach. A typical session of mediation begins with each party telling their story and expressing their point of view. The mediator listens to the parties at this time and helps them identify the key issues in the dispute, offering options for resolution, and assisting them in crafting a thorough settlement that is agreeable to both of them. Though the mediator works to guide the conversation, they do not decide the outcome; that is up to the disputing parties. The mediator focuses on assisting the communication between the parties, helping them to clarify their issues, identifying their interests, and creating options that meet their needs.
Mediation can take many forms, depending on the needs of the parties, such as:
Mediation should be considered when the parties have a relationship they would like to preserve. For instance, it is particularly useful in divorce and child custody disputes, business disputes, neighborhood and community conflicts, and landlord/tenant disagreements. So, when family members, neighbors, or business partners have a dispute, mediation may be the best form of ADR to use. Mediation is also effective when emotions may get in the way of finding a solution that all parties will find agreeable. A mediator can help the parties communicate with each other in a non-threatening and effective manner. Mediation is also available to parties at any point during the litigation process, including during the appeal. So, parties that have already gone to court can agree to sit down with a mediator and come to a solution rather than continuing with their litigation. Most judges are more than happy to sign off on an agreement reached during mediation, as long as both parties can attest to its sufficiency.
Mediation may not be effective when one party is unable to negotiate or fully participate in the process due to substance abuse, psychological impairment, physical or emotional abuse by the other party, or ignorance. It can also be ineffective when one party is only interested in getting revenge on the other party.
When both parties agree on a solution, the agreement may be put in writing by the parties, the mediator, or a lawyer. If the parties are unable to reach a mutually satisfactory solution in mediation, they still have the option of taking their dispute to court.
Arbitration is the most formal of the types of ADR procedures and takes the decision-making away from the parties. In arbitration, an arbitrator hears the arguments and evidence from each side and then decides the outcome of the dispute. Arbitration is less formal than a court trial and the rules of evidence that must be followed in court are usually considerably relaxed. Each party is free to present proof and arguments at the hearing. There is not, however, any facilitative discussion between the parties during this process. Unlike most other forms of ADR, the final decision is usually supported by a written opinion from the arbitrator, though the parties can agree that no written opinion will be issued.
Depending on the state, the arbitration can be binding or non-binding. Binding arbitration means that the parties have waived, or given up, their right to a trial in court, agree to accept the arbitrator's decision as final and, usually, there is no right of appeal of the decision. If there is a binding arbitration clause in a contract, any and all disputes must go directly to arbitration and there is no trial. Non-binding arbitration means the parties can request a trial if they do not accept the arbitrator's decision. Some courts will impose costs and fines if the court decision is not more favorable than the decision that was handed down by the arbitrator. Non-binding arbitration is becoming increasingly rare.
Arbitration is good for cases where the parties want a third person to settle their dispute for them, but also would like to avoid the cost of money and time that is involved with hiring a lawyer and going to court for a trial. It is also appropriate when the parties want a decision-maker who is experienced in the specific subject matter of the dispute. For example, in a dispute involving a scientific patent, the parties might prefer to have an arbitrator with a background in science make the final decision to settle the dispute rather than a judge who is unfamiliar with scientific research or the scientific principles involved in the patent.
Although facilitation, mediation, and arbitration are the most common forms of ADR, there are other forms of ADR that are used in special circumstances or in particular states or cities. Here are a few alternative forms of ADR.
Med-ARB is a combination of mediation and arbitration. It works best when participants have an equal amount of experience with bargaining and negotiation. It can be used when a negotiated but quick settlement is necessary. In med-ARB, a neutral and impartial third party serves as both the mediator and the arbitrator. This third party tries to facilitate communication between the parties as in mediation. If this fails, testimony is given by the parties, and then the neutral third party issues a binding decision. In situations where the parties have an ongoing relationship with each other, such as family or labor disputes, this method can help the parties preserve their relationship by promoting voluntary communication and settlement, with arbitration only being used to decide those issues that the parties find it impossible to agree upon.
Neutral evaluation, also known as early neutral evaluation, is an ADR procedure wherein each party presents their case to a neutral third party who gives an opinion on the strengths and weaknesses of each parties' evidence and arguments and how they believe the dispute should be settled. This form of ADR is most effective and useful when the subject matter of the dispute requires an expert in the field, such as in a patent case. Neutral evaluation is best for cases with technical issues that need an expert and where there are not significant emotional or personal barriers to reaching a settlement. The evaluator's informed opinion is then often used to negotiate a settlement rather than proceeding to a court trial or binding arbitration.
In a settlement conference, the parties meet with the judge or a referee who works for the judge to discuss a possible settlement of their dispute. The judge will not make a decision at this time but will assist the parties in evaluating the strengths and weaknesses of their case. The settlement conference is often the last chance for the parties to come to an agreement amongst themselves without giving up control of the outcome to the judge. Settlement conferences are most useful when the judge's knowledge of the case will be beneficial to the parties. It is also a good choice when problems exist with the exchange of information between the parties and it is important to keep the pressure of an upcoming trial date. Settlement conferences may be voluntary or mandatory depending on the judge. Settlement conferences can be used in simple or complex cases and can be combined with mediation. Judges often recommend a settlement conference when it seems the parties might be open to coming to an agreement with each other but a referral to a different ADR process might unduly increase costs to the parties or delay the resolution of the case.
Many states and cities have community dispute resolution centers or programs. These are staffed by trained community volunteers who provide low or no-cost mediation as an alternative to lengthy and costly court procedures. This form of ADR is tailored to handle an increasingly wide range of private and public civil conflicts, such as landlord/tenant disputes, business dissolution, land use, public education, or adult guardianships/conservatorships. Most of the cases are referred to these programs by the courts themselves.
ADR is becoming more and more popular with courts across the country. The main reason many parties prefer ADR to court proceedings is that, unlike with adversarial litigation, ADR proceedings allow the parties to understand each other's positions and create a solution that works for them without taking away their agency or control over the outcome.
About the Author: Malissa Durham is a Legal Templates Programmer and Attorney at Wonder.Legal and is based in the U.S.A.