Understanding Alternative Dispute Resolution
Alternative dispute resolution arose from the frustration of clients, lawyers and judges with the high cost, low speed, and adversarial nature of litigation, the traditional method of settling legal disputes. ADR is becoming increasingly popular in resolving conflicts involving commercial and labor disputes, divorce, motor vehicle accidents, medical malpractice, and other issues that would otherwise likely end up in court. Due to its current popularity, some commentators have noted that ADR may be understood to stand for appropriate, rather than alternative, dispute resolution, because there is no longer anything alternative about ADR.
Although some ADR methods, like mediation and arbitration, are well established and frequently used, ADR has no fixed definition, and there are no limits to the methods that may be used to resolve a conflict. Clients, lawyers, and judges are continuously adapting ADR methods or devising new ones to meet the unique needs of particular legal disputes. Also, ADR is not always a replacement for traditional litigation, but can be used in conjunction with litigation when the parties wish to explore other options while retaining the right to return to the traditional court processes at any time. The one requirement for making any of the available methods work is that the parties and their attorneys understand and agree to the same process.
All ADR processes motivate the parties and their lawyers to prepare for resolution of the conflict before them. As with traditional litigation, the parties have their day in “court,” or a hearing in which they have the opportunity to present their perspectives and their ideas of a fair resolution. Possibly for the first time, the parties witness a capable presentation of the other side’s case, and then have an opportunity to identify common interests and points of agreement, which can lead to mutually acceptable settlement options. Many people prefer ADR because they view it as a more creative process that is focused on problem solving, unlike litigation, which can foster an adversarial relationship. ADR is most effective when both sides are in comparable bargaining positions (i.e., they are approximately equally sophisticated and financially situated), and when the parties respect each other and are relatively objective and open-minded. ADR may be preferable when time is of the essence, such as in a business dispute involving products undergoing rapid technological change; when an inexpensive resolution is desired, such as when the costs of litigation would exceed the amount that could be recovered; when confidentiality is important and publicity should be avoided, because the issues are sensitive and personal or could involve divulging trade secrets or competitive information; or when the issues involved are highly technical and can be best understood by someone with specialized expertise.
In some states, courts have adopted rules that require lawyers to inform their clients of the alternative methods for resolving their conflicts. Clients must now decide how to proceed, and choose the type of ADR that will be most effective in resolving their disputes. ADR decisions can best be made, however, with the advice and counsel of the parties’ lawyers, whose enthusiastic participation is an essential element of any successful dispute resolution process.
Arbitration involves the competitive presentation of evidence to a neutral decision-maker selected by the parties to make a win/lose decision. The arbitrator is often selected based on his or her subject-matter expertise. The hearing is held according to rules of procedure and evidence chosen by the parties. Arbitration decisions usually cannot be appealed, except in cases of undue influence, bias, duress, or the like.
International dispute resolution is typically an arbitration-type procedure, as discussed above, used to resolve disputes between companies doing business internationally. One of the main benefits is avoiding the uncertainties of being subject to a foreign country’s unknown judicial system.
Mediation refers to facilitating communication geared toward compromise, in order to resolve a past dispute or create agreement for the future, with the assistance of an impartial mediator. In mediation, the parties always hold the decision-making power. Mediation may be entered into voluntarily or ordered by the court.
Mini-trial involves the abbreviated presentation of evidence to one or more expert neutral facilitators in the presence of the executives or top management of the companies involved in the dispute. Following the presentation of evidence and a questioning period, the decision-makers and facilitator(s) meet for confidential settlement discussions.
Private judging is a process provided for in the statutes or court rules of most states that allows the parties to appoint any person, usually a retired judge or person with expertise in the subject matter of the dispute, to hear the case and make a decision. The private judge’s decision is entitled to entry as a judgment and may be appealed.
This publication and the information included in it are not intended to serve as a substitute for consultation with an attorney. Specific legal issues, concerns and conditions always require the advice of appropriate legal professionals.