Alternative Dispute Resolution (ADR) Generally

 

Alternative Dispute Resolution, or ADR, has come to encompass a broad class of methods for resolving disputes outside of the courtroom -- the traditional arbiter of disputes.  Aimed at saving time, money and the underlying relationship between the parties, ADR can be a valuable surrogate to filing suit.  The most well known forms of ADR include negotiation, mediation and arbitration.  It is important to note as well that, with the legal and public communities' acceptance of ADR, these extrajudicial "alternative" methods are also finding their way INTO the courtroom.

 

Arbitration

 

Arbitration, though similar to litigation in terms of structure and finality, allows the parties more flexibillity than court-based proceedings, including permitting the parties to choose their own judge, (or arbitrator, as the person is known), their own timetable and own procedural rules.  With multilateral conventions opening the way for the use or arbitration and the enforcement of arbitral awards, the inclusion of this method of dispute resolution in international contracts is crucial to a successful representation.

 

Mediation

 

Mediation is a method for extrajudicial dispute resolution which utilizes a neutral party (the mediator) to help facilitate settlement or compromise.  The structure or format for the mediation is largely left to the parties.  If the parties agree to the mediator's recommendation(s), they may sign a settlement agreement, which can then be enforced as a contract.  While Mediation can benefit the parties (by keeping costs down, speeding up the resolution process and by permitting the parties to continue their relationship), its major drawback is the lack of finality.  If one party disagrees with the mediator's decision, the mediation may fail.

 

Negotiation

 

Negotiations are the base method for dispute resolution, the strategic first step, where parties agree to meet and attempt to work out their differences without third party involvement.  Negotiations can be party-to-party, or through representation, such as lawyers.  It's probably a good idea, in most contracts, to include a clause requiring parties to negotiate, in good faith, and attempt to work out a solution to their differences prior to their upping the stakes by heading to more formal disptue resolution, such as mediation, arbitration or even trial.