HOW ALTERNATIVE DISPUTE RESOLUTION (ADR) WORKS
Conventional litigation has become extraordinarily time-consuming, expensive, and inefficient. Alternative Dispute Resolution (ADR) is now widely recognized as a desirable alternative to the traditional litigation process. ADR, in its present form, has been used for several decades and has proven to be an effective method of bringing disputes to a conclusion through a process that respects privacy, acknowledges the dignity of the parties, and attends to respective legal positions with an open mind and usually without prejudice.
There are basically two types of ADR, mediation and arbitration.
By recommending ADR, or by including an ADR clause in a contract, we are considering the ongoing costs that you are likely to incur in the litigation process and the potential savings that ADR offers, both in economic terms, emotional strain, and time commitments.
The mediation process in its traditional form consists of a voluntary and confidential procedure in a private setting that is non- binding on the parties. The Mediator facilities negotiation through private caucuses with each party and identifies key issues of fact and law that will ultimately be considered by the trier of fact if the mediation process fails to result in resolution.
The goal of a Mediator is to assist the parties in reaching an agreement. The Mediator does not impose his will or opinion on the parties, but provides suggestions for alternative resolution that may not have been considered by either side of the dispute. A successful mediation in large part depends on the expertise and assistance of the parties’ legal counsel, who provide their respective clients with an assessment of the risks and benefits of arriving at a resolution through the mediation process versus the alternative of arbitration or litigation.
When parties enter into the mediation process understanding that compromise, at some level, will be necessary in order to resolve the matter, the majority of mediation sessions result in dispute resolution and a significant economic saving to each side.
The arbitration process is more formal than mediation, and is typically legally binding. Arbitration has become so well recognized and accepted that an arbitration provision for dispute resolution is now common in contracts of many types.
In an arbitration, the parties mutually choose and Arbitrator or a panel of Arbitrators. The qualifications and experience of the Arbitrator(s) selected Is critical. An Arbitrator should be educated and experienced in the relevant area of law.
The Arbitrator conducts a formal hearing similar to a court trial (a trial without a jury). The Arbitrator hears all of the evidence introduced by each party through their lawyers. Evidence is typically produced according to the rules of evidence, or as agreed upon by the parties.
After hearing the presentation of evidence, the Arbitrator prepares a formal ruling and renders a legally binding and enforceable decision. The proceeding may be kept largely confidential.