Alternative Dispute Resolution: A Viable Alternative to Litigation
August 20, 2015
There’s more than one way to handle a business dispute.
When a serious dispute arises with a business that cannot be resolved, it may seem like litigation is inevitable. However, there are other alternatives available. Court cases can drag on for months, even years, and they can consume a large portion of your time, money and energy. A better option might be alternative dispute resolution (ADR), which has become an increasingly popular solution in recent years. Depending on your particular situation, ADR could offer you some significant advantages which would not be available through conventional litigation.
What is alternative dispute resolution?
As the name implies, ADR is an alternative to going to court to resolve a dispute. It is actually a combination of different approaches that work in tandem to attempt to reach an outcome acceptable to everyone involved. What is more, ADR may save the parties time and money. There are several different types of ADR from which to choose.
Mediation is one of the most popular types of ADR. In this environment, you and the other party meet with a trained mediator to discuss conflicts and attempt to reach a mutually acceptable solution. The mediator’s job is to facilitate a discussion and to assist the parties in acknowledging and clarifying the relevant issues. The parties play an active role in attempting to negotiate a settlement that is suitable for both sides. Thus, mediation has the potential to provide the parties with more control over the outcome of their dispute.
Arbitration is something of a mix between mediation and litigation. In this atmosphere, you and the other party agree to let a neutral third party decide the outcome based on the information presented. During an arbitration, both sides present evidence and arguments, following which the arbitrator(s) will render a binding decision for the parties. It is similar to litigation, but it may help to avoid high costs and time delays.
3. Neutral Evaluation
Neutral evaluation is similar to both mediation and arbitration with some key differences. In this circumstance, a neutral evaluator will listen to both parties’ claims and defenses, as well as any evidence the parties present in support of their claims and defenses. The evaluator will then offer an expert opinion on a potential path to resolution. However, unlike arbitration, the evaluator’s opinion is not binding. The involved parties can decide whether to accept or reject the advice, in whole. Further, the parties can agree to utilize the evaluator’s opinion to further their settlement negotiations.
An ombudsman can provide ADR solutions for intercompany disputes between an employer and an employee or group of employees. The benefits here include a low-key process and the advantage of keeping everything “in house.” It can also show that the employer has taken a proactive stance toward in-house conflict.
One drawback here is that the employer must have an individual capable of acting as an ombudsman to resolve all of these disputes. This individual must be neutral, intelligent and be reasonably familiar with the employer’s business. They may be recommended to the employer or known by the employer and can be kept on retainer if his services in the initial controversy are deemed satisfactory.
Alternative dispute resolution has become increasingly popular because it offers a more streamlined process to resolve conflict compared to conventional litigation. Additionally, it can prove to be less costly and require less time. For business-to-business disputes, in-house disputes and many other conflict situations, ADR is worth exploring.