Alternative dispute resolution (ADR) is a means of addressing and settling parties’ disputes outside of court’s traditional adversarial setting. Today, alternative out-of-court mechanisms for settling disputes are so effective that courts often require parties to pursue these alternatives before litigating. For example, both mediation and arbitration, the two most common ADR procedures, may be court-ordered. Settling one’s disputes through mechanisms external to the court system may save you time and money.
What are the Different Types of Alternative Dispute Resolution (ADR)?
There are many different ADR types that may involve third party’s help and that may be binding as well as non-binding. The two most common types of ADR are mediation and arbitration; however, each has its own variations, too.
1. Mediation involves the help of a go-between third party, called a "mediator," whose job is to help parties reach some mutual agreement. A mediator cannot force parties to agree and is not even permitted decide the outcome of a dispute. Therefore, while mediating, both parties retain significant control over the course of mediation. Mediation is fully confidential and agreemtns are usually non-binding, so parties may still pursue litigation following the mediation process.
2. Arbitration also involves the help of a neutral third party. During arbitration, an "arbitrator" acts a bit analogously to a trial judge by listening to the parties’ grievances. Unlike a mediator, an arbitrator is not a passive go-between facilitator. After listening to the parties, an arbitrator (often a professional in the party’s subject of dispute) actually pronounces a decision. Arbitration is still less formal than a full-blown trial because many rules of evidence don’t apply to arbitration. Arbitration can either be binding or non-binding.
3. Med-Arb is a mixture of arbitration and mediation that combines the benefits of these two methods. Basically, parties commence with mediation, and if an agreement had not been reached, they move on to arbitration. The same or different third-party neutral may conduct the mediation and the arbitration sessions of Med-Arb.
4. Mini-trial is a mechanism for the parties to test their case and shed light on settlement discussions. In a mini-trial, each party’s attorney presents an abridged version of the case. The information is presented to a panel of representatives chosen by both parties. The panel representatives actually decide a mini-trial outcome. Unlike other ADR mechanisms, mini-trial is unique in that it often occurs after commencement of formal litigation.
5. Summary Jury Trial (SJT) is essentially a mock trial with a neutral jury that produces a verdict. It is similar to a mini-trial but is ordered by the court rather than being stipulated by the parties. After hearing the verdict, the court usually requires parties to attempt settling their case before litigating in court.
6. Early Neutral Evaluation (ENE) usually occurs when a case has just been filed. The early neutral evaluation may be conducted by a judge-appointed evaluator from whom provides parties learn insights about the case. For example, after case examination, an evaluator may educate parties about their arguments' relative strengths, chances of winning, and settlement options.
7. Negotiation is exactly what it sounds like: parties negotiate with each other to achieve a compromise. Although obvious, this form of ADR is often overlooked. Negotiation does not typically involve any go-between neutrals and is as informal and open-ended as parties wish to make it.
Is Alternative Dispute Resolution Right for Me?
All forms of alternative dispute resolution present a number of key advantages over formal litigation. For example, ADR is much quicker and far less costly than litigation. Also, ADR may lead to a higher degree of confidentiality. Given these advantages, one should nearly always consider ADR prior to initiating formal litigation.
Should I Seek an Attorney’s Help with Alternative Dispute Resolution?
A business attorney may clarify which method of ADR is most appropriate to your case. As discussed above, ADR may occur when parties had already retained their attorneys in preparation for litigation. Further, some types of ADR require the presence of attorney. A consultation with attorney may shed light not only of benefits but also on nuanced drawbacks of each ADR method in the specific context of your case.