What Is Alternative Dispute Resolution?

Conflict is a natural occurrence. Disputes over property, wills, trusts or other inheritance rights and obligations, partnerships, business or employment relationships, claims against professionals or building contractors and even car accidents are commonplace. However, when they take on the added weight of emotional overlay or involve cross-cultural interests, reasonable resolution may seem remote or even impossible.

The court system has historically stood as the ideal way to determine fair and lawful resolutions. But traditional litigation carries with it several problems. First, there is the obvious financial cost, which typically includes court fees, attorney fees, whether hourly or on a contingency basis, and a myriad of other expenses. Secondly, traditional litigation takes time because it must comply with strict court processes that offer little flexibility. Because many civil courts face overwhelming backlogged dockets, litigation cases generally involve yearlong delays before the judge or jury even hears the case. Next, there is the inevitable emotional cost to parties simply thinking and worrying about the dispute, spending precious time in their own or the other side’s attorney’s offices or in court, instead of in their own workplaces, business or with families. Lastly, traditional litigation is not confidential, with most trials taking place in a public forum, often resulting in broken relationships, embarrassment or destroyed reputations. In short, litigation is often a truly destructive process!

ADR as the Solution to Traditional Litigation

Alternative dispute resolution (ADR), either eliminates completely or greatly reduces the problems associated with traditional litigation. In essence, ADR refers to several different methods of resolving legal conflicts without going to court.

These methods include mediation, binding and non-binding arbitration as well as neutral evaluation, and in a typical ADR process, the parties play a greater role in resolving their disputes. Because of this flexibility, ADR is now associated with creative solutions, long-lasting outcomes, increased satisfaction, and improved relationships.

Mediation, in particular, has proven so successful in resolving disputes (statistics show over 90 percent of pending lawsuits that go through mediation end in a pre-trial settlement), that many courts strongly encourage mediation, and attorneys are increasingly recommending mediation to their clients, either before litigation is commenced or once litigation has started and sufficient is known about the dispute to make settlement negotiations meaningful. 

The Job of the Mediator to Reach a Settlement

Mediation is known to be the most effective method of resolving disputes. Unlike trials or even arbitration, mediation allows parties to reach a mutually agreeable settlement through the guidance of a third-party, experienced mediator.

Especially in cases where cultural diversity, gender and personality, for example, impact the perception of rights and obligations, a trained mediator with subject matter experience and well-honed negotiation skills can facilitate cross-cultural and personal exchanges to ensure resolution and to avoid costly trials.

To promote communication between the parties, in a collaborative and confidential setting, as opposed to the formal presentation of witnesses and evidence in open court, a mediator’s job is to be a good listener, sensitive to the needs and interests of the parties, and totally neutral as to the outcome of the negotiations.

But this also means that mediators must guide conversations toward reasonable settlement offers. For this, a mediator must facilitate open discussion, look at both sides of the issue, sometimes even be evaluative, prompting the parties to consider “what ifs,” and by offering reality checks, identifying risks and exploring settlement options, encourage disputing parties to creatively shape their own solutions without deepening resentment.

Binding and Non-binding Arbitration

Where mediation resembles a facilitated negotiation where parties reach their own settlement with the help of the mediator, arbitration mimics the processes of a trial, but is generally less formal. In arbitration cases, the disputing parties can call witnesses, present evidence and argue the merits of their case to one or more arbitrators.

The main difference between mediation and arbitration is that the arbitrator listening to both sides of a case renders a decision afterwards. In binding arbitration, the parties must adhere to the arbitrator’s decision, which is final and, in most instances, non-appealable. For non-binding arbitration, parties unhappy with the decision can request a new trial in court.

In fact, because of the similarities between trials and arbitration, many jurisdictions order arbitration especially when claims are below specified dollar amounts. In most courts, however, civil litigants can decide to arbitrate disputes regardless of dollar amount. Many modern real estate, business and commercial contracts make arbitration and even mediation mandatory.

Arbitration proves beneficial in many cases because, unlike the court process, arbitration is generally quick, confidential and less expensive, although the arbitrator’s fees are usually paid by the parties. Moreover, the parties involved in arbitration can mutually agree on the arbitrator.

Cases that can benefit from arbitration include contract and co-owner disputes, inheritance disputes, construction defects, tort and real estate claims, title and escrow disputes, landlord-tenant disputes and many others.

ADR’s Benefit in Regards to Emotionally Heavy Disputes

Whether using mediation, arbitration, neutral evaluation or any other ADR processes, it is important that the professional neutral have specialized knowledge in the subject area of the dispute. Also, because of cross-cultural differences or emotional overlay defining many cases, modern mediators and arbitrators must have competency in recognizing and validating social customs and understand the dimension of how cultural diversity impacts disputes and their resolution.

ADR endures as a simple and straightforward process used to bring disputing parties together in an informal, settlement-orientated atmosphere, and its benefits regarding money, time, and privacy greatly outweigh the trial court process.