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What is Alternate Dispute Resolution (ADR)?
Alternative Dispute Resolution includes any process, agreed to by the parties in dispute, in which they use the services of a neutral party to assist them in reaching an agreement and avoiding litigation. The goal of ADR is to provide a forum for the parties to work towards a voluntary, consensual agreement, as opposed to having a judge or other authority decide the outcome.
The tools used for resolution of a dispute include arbitration, collective bargaining, mediation and negotiation. These are often referred to as Alternative Dispute Resolution (ADR). Arbitration and collective bargaining are usually associated with regulatory oversight and union disputes. Mediation usually is the platform for community, family and employment disputes as well as local and state court including Civil, Housing and Small Claims cases.
ADR Tools
Arbitration is a process where a panel or an impartial third party hears each side of a dispute and issues a decision. Arbitration is more formal process than Mediation and resembles a simplified version of a trial involving limited discovery and simplified rules of evidence, but hearsay may be admissible in an arbitration. The parties may agree to either have the decision be binding or non-binding. An Arbitrator does not have to be an attorney, parties can select arbitrators from other fields that they consider more suitable for the resolution of the dispute. For example, parties can choose an arbitrator with an investment-related background to arbitrate an investment-related dispute.
Collective Bargaining is the process in which unions, usually on behalf of their members, negotiate contracts with employers to determine terms of employment, including pay, benefits, hours, leave, job health and safety policies, ways to balance work and family.
Mediation is an informal process and is an alternative to litigation. It brings opposing parties together and attempts to work out a settlement or agreement that is acceptable to both parties. Mediation is the most common form of ADR in use today. A neutral individual, the Mediator, attempts to assist the parties to find a compromise acceptable to both. Distinguished from arbitration because it concentrates more on the search for terms acceptable to both parties and less on the legal resolution of their disputes. Mediators can not force parties to settle their disputes.
Negotiation gives parties maximum control over the outcome. They direct the give and take necessary to reach a settlement. Thus, the result is most likely to meet their individual needs. Negotiation works best when disputants are willing and able to talk about their dispute and to compromise on their differences. As with mediation, negotiation is based on the voluntary disclosure of information and good faith participation of the parties. It is the preeminent mode of dispute resolution. The major disadvantage is that the parties need to deal with the issues related to the dispute with each other. Negotiation may not be appropriate if one of the parties is in a position of power or control over the other.
