Alternate dispute resolution (ADR) involves resolving conflicts outside of the court system. ADR includes the legal techniques of arbitration, mediation and conciliation. To better understand why people might choose one of these options as opposed to litigating their issue through the court system, this article will briefly review the concept of litigation, as well as the two more popular ADR options listed above.

Litigation involves resolving your dispute through the court system. There is a strict and prescribed process that must be adhered to for each and every case. The legal action is initiated with court paperwork which defines each of the parties’ positions. Upon completion of this stage, each party sets off on the lengthy course of gathering as much ammunition as possible, supporting their own position. This part of the proceeding can involve much paperwork, many meetings, and a lot of finance! It is hoped that eventually the parties will be able to reach a settlement, and not have to proceed to trial, which could then lead to a lengthy appeal. Fortunately, over 90% of cases which go down this path end in settlement, but it is likely to be a very lengthy and expensive proceeding to get there.

Arbitration is a legal tool for the resolution of disputes outside of the courts. It is a less formal alternative to litigation, with advantages of saving both time and money, whereby the disagreement is resolved by arbitrators, who are impartial and unbiased decision makers. Both parties agree that they will formally accept the ruling of the arbitrator. The rules abided by in this process can range from being very similar to that of the strict court system to a much more lax set of rules. Parties along with their legal counsel choose how the arbitration will proceed depending on which set of rules is chosen to govern the hearing.

Mediation is less formal than the method of ADR described above. It is a voluntary method of attempting to settle a dispute by hiring an impartial party to resolve differences. Mediation is most common in family disputes; however, it is occasionally used in civil and contract disputes as well. Mediators can be hired for a somewhat significant fee, but this cost generally is much less than the legal costs of litigating the issue.

In addition to saving time and money, arbitration and mediation can often have the added advantage of often allowing the ongoing relationships of parties to continue or at least a greater chance that they may be repaired. As opposed to litigation whereby generally one party wins and the other loses, ADR facilitates more win-win situations. Litigation is a much harsher process and can often, therefore, leave parties feeling uncomfortable to deal with each other in future transactions.

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