Alternative Dispute Resolution
Alternative Dispute Resolution consists of different methods of resolving disputes that often serve as an alternative to litigation. There are different forms of Alternative Dispute Resolution, including or implicate neutral evaluation, negotiation, conciliation, mediation, and arbitration. Negotiation is generally the first method used to resolve a dispute, but if the disputing parties aren’t both satisfied with the negotiation outcome another method may be needed. Arbitration and mediation are the most common forms of ADR.
Mediation involves a neutral mediator(s) actively listening to the participants in a given dispute who helps the latter find a structure to work together to find a resolution that both parties can agree on; or if that is not then possible, to identify with clarity the areas of disagreement between them. Mediation is a useful option for disputes where the parties wish to preserve their relationship and the parties.
Arbitration is a more formal proceeding in which a neutral arbitrator or an arbitral panel establishes a procedure to in which parties present evidence and the arbitrator or the panel decides issues and renders a final award. Arbitration is usually binding and unless the parties mutually agree otherwise is subject to only limited grounds for review and appeal.
Advantages of Alternative Dispute Resolution:
- Overall Cost:
The overall cost of a dispute resolution is generally lower than litigation due to more limited discovery procedures, faster hearing times, and less formal presentation of evidence. Again, the parties may agree to procedures that affect the level of discovery, grounds for appeal and how they wish to present evidence.
- Save Time:
Alternative Dispute Resolution is usually a faster process than litigation, and generally results in resolution of disputes in weeks or months as opposed to the potential years spent in the courts.
- Preserve Relationships:
Preserving working relationships between parties is an important aspect to consider with any dispute resolution. ADR creates an environment that allows disputing parties to keep a good working relationship while resolving the dispute in a way that is satisfactory to everyone.
Subject to certain exceptions arbitration awards and opinions are generally not part of the public record, and are kept private between the arbitrators and the disputing parties. Please note that it is a good practice to inquire of the parties if they wish to agree to confidentiality of the proceeding, evidence, outcome, and other information (e.g., Trade Secrets or other confidential business information) since the parties are, unlike the arbitrators, not automatically subject to confidentiality.
When to consider taking advantage of ADR methods
Disputing parties may find an advantage in choosing ADR over court proceedings, because ADR is generally a faster, confidential, less expensive alternative to formal litigation. It is also a more final process. given the limited rights to appeal (unless the parties agree to expand and take advantage of the appellate rules and procedures that are now offered by most providers. Also, under the terms of the New York Convention, arbitral awards rendered in a given jurisdiction are generally recognized and given effect in foreign jurisdictions in which enforcement of such is sought.