Alternative Dispute Resolution, or ADR, can be defined simply as the settling of any legal-related disputes outside the courtroom. There are several different forms of ADR including evaluation, negotiation, conciliation, mediation, and arbitration, which we will expand on throughout this article.
There are several pros with ADR. It is generally less time-consuming, less costly, and less formal. As time goes on, more and more states have started to experiment with ADR programs; some are mandatory and some are voluntary.
Evaluation is a form of ADR that involves each party having the opportunity to present the case at hand to an unbiased, neutral person deemed the ‘evaluator’. The evaluator, after hearing each party’s side of the story, provides each side insight into their evidence and arguments. At this time, the evaluator makes recommendations on how to dispute can be agreed upon and resolved. More often than not, the evaluator has intimate experience and knowledge of the dispute’s subject matter. Each party typically uses the evaluator’s opinion as a basis in order to move towards rectifying the situation and coming to an agreement.
Evaluation may be appropriate in cases where technical issues come about that require intimate subject matter expertise. It may not be appropriate in cases where emotional or personal barriers cloud the ability to resolve the dispute in an equal manner.
Usually attempted first to resolve a dispute, negotiation allows the parties to meet in an attempt to come to an agreement and resolve a dispute. It’s the renowned mode of dispute resolution and often referred to as the most popular type of ADR. The main advantage of this form of dispute agreement is that it allows the parties themselves to control the process and the solution, which can be hit-or-miss, depending on the scenario at hand.
Negotiation is commonly explored in the attempt to avoid prospect litigation. Negotiations can take place over one day, or several days, depending on the specifics of the case. If an agreement is reached between two parties, it’s typical that the case will be placed into a contract. The contract is managed by each party’s legal representatives, who become binding all parties involved.
There are several details of negotiation that many consider advantages including:
As mentioned above, negotiations can be concluded in as short as one day, unlike litigation. This would result in not only a faster turnaround of a conclusion which is invaluable to many.
Negotiations usually only involve each party’s legal representation and the parties themselves, as opposed to litigation cases that involve several others. This, along with a shorter conclusion turnaround will likely result in lower start-to-finish costs.
Because negotiations are often carried out with or without each client present, many choose to go this route. Due to well-versed representatives on each side of the spectrum, the playing field is maintained equally.
Freedom to exit the process
If one of the parties is not content with how to negotiation has been carried out, they’re free to exit the process with no penalties, as long as they’re current on any charges that may have incurred up to that point. At that point, they’re able to explore other types of ADR or litigation.
Along with the advantages of negotiations, there are a handful of disadvantages including:
Lack of time constraints
Because negotiations don’t have any formal time constraints, they can drag on for months if an agreement is not reached. This can arise as a serious issue for those who are on strict timelines.
Lack of an unbiased third party
Lacking a mediator could result in each party being caught off-guard. In other words, each party could very well come to an agreement that is beneficial, but not considered the best option from an unbiased third-party expert.
Involving the resolution of disputes that involve negotiations between parties, conciliation is assisted by an individual deemed a conciliator. Conciliators are independent and neutral on the dispute at hand. Typically used as soon as a dispute or misunderstanding surfaces, conciliation is utilized in a preventative manner. The main goal of conciliators is to reach a mutual agreement as opposed to favoring one side of the equation. Unlike the other forms of ADR, the parties involved in the dispute generally do not meet in-person to carry out communication. Instead, each party meets with the conciliator privately and separately to move forward with resolving the dispute at hand.
By improving communication, interpreting issues in the dispute, and looking at things from each party’s’ point of view, the conciliator plays an integral role in reaching a mutual agreement. Unlike the role of a mediator, the conciliator takes on additional responsibilities of advising each party from a legal standpoint. They’re able to make consultive comments regarding the legality of the dispute during their communication with each party. Although the conciliator is unable to make a binding decision on the parties, if the parties come to an agreement, the conciliator is able to draft up and provide an agreement binding.
There are numerous advantages to conciliation, and, at the same token, many disadvantages. A few of the advantages include:
No face-to-face aspect
When two parties have an uncomfortable and hostile relationship with one another, they’re likely not going to want to talk in person, which is why conciliation is a common and fitting option for many.
Often considered one of the most significant advantages of conciliation, many enjoy and value the relaxed nature of not adhering to traditional methods.
Typically, at the launch of a conciliation, parties enter agreements to ensure any negotiations are carried out privately and confidentially.
As opposed to going through a lengthy and tedious court process, conciliation is considered more efficient for those who have busy schedules. Some cases have been known to reach mutual agreements in as short as one week.
Lack of binding agreement
If one of both parties are not content with the way the conciliation has been carried out, they’re able to exit the process after they pay any cost incurred up to that point. This is beneficial to many who dislike long-term commitment and value independence.
Legal consultative support
Many people value the legal guidance and insight that conciliators are able to provide respectively. This also ensures that each party adheres to legal standards at all times.
Along with the advantages, conciliation also has some factors that you may consider disadvantages including:
Lack of binding decisions
If each party invests time, money, and effort into the conciliation process resulting in no formal agreement, they will be left exactly where they started. This can be considered a risk and disadvantage to many who are in need of a timely agreement.
As previously stated, the conciliator is supposed to be unbiased and impartial which, in cases in the past, has not been the case. This has lead to skepticism of many who are considering conciliation as an option.
Also an unofficial alternative to litigation, mediators assist each party in an attempt to mutually resolve a dispute by aiding in the communication between parties. With a goal of working out a settlement or agreement that each party will accept, mediators can be for a wide spectrum of case-types ranging from federal government negotiations to cases of the juvenile court. In the last decade or so, mediation has also become a crucial technique for rectifying arguments between investors and their stock brokers.
Carried out with the assistance of a third party, the mediator has no power to urge a solution on the parties, unlike the arbitrator or a judge. Instead, the mediator guides each party through the dispute, advocating for clear, professional, and emotionally expressive exchanges of information. They deal with each parties’ discrepancies in a conversational manner, providing unbiased expertise in hopes of resolving the dispute or disputes at-hand. Business-related disputes submitted to professional mediation services have had a settlement rate of approximately 80 percent. Mediation may be appropriate in scenarios where emotions are interfering with resolutions, or when each party has a relationship they’re yearning to preserve. On the other hand, mediation will likely be ineffective if one of the parties is not willing to compromise and cooperate, or if one party has more power and say-so than the other.
In arbitration, an unbiased person is deemed an ‘arbitrator’. They hear each parties’ arguments and evidence before determining the outcome of the dispute at hand. Considered a simplified version of a trial that involves sparse discovery and paraphrased rules of evidence, arbitration can be considered binding or nonbinding. Binding arbitration is defined as the waving of rights to trial mutually by each party, agreeing that the trial’s outcome is final. Nonbinding arbitration, on the other hand, is defined as each party being free to request a trial if one party doesn’t agree with the arbitrator’s final decision.
Typically, arbitration is divided into several steps including deciding whether to file a claim or not, filing a complaint and fee, dealing with a filed response from the opposing party, the process of choosing arbitrators for each party, prehearing, discovery, finding an expert, the formal hearing, the deliberation amongst arbitrators where awards are granted and fees are assessed, and, last but not least, enforcing the awards agreed upon.
Arbitration hearings are headed and decided by an arbitral panel. Panels are built in two ways. Either each side chooses and agrees on one arbitrator, or each side chooses their own arbitrator. If each side decides to choose their own arbitrator, those two respective arbitrators will huddle together to agree on and choose the third arbitrator.
There are some cases where arbitration may be appropriate, and somewhere it may not be. For example, if two parties want an unbiased person to decide the outcome of their dispute, but yearn to do so in an informal, time-efficient, and cost-effective manner, arbitration may be appropriate. On the other hand, if one or both parties want to retain control over the outcome of their dispute, arbitration, particularly binding arbitration would not be an appropriate option.
Lasting anywhere from a handful of days to an entire week, panels tend to meet for only a few hours each day of the hearing. During said hearing, the panel purposes and issues a written verdict or arbitral award. Commonly used in construction, labor, and securities regulation, arbitration has become more prevalent in business disputes as well. Whether you have questions relating to the Title 9 of the U.S. Code or the Uniform Arbitration Act, The Doyle Law Offices is here to help any way we’re able to.
For two decades, attorney Hank Doyle has been representing clients in civil litigation cases. Whether you have been sued or need to file a lawsuit, The Doyle Law Offices, P.A. has wide experience in handling many different kinds of civil law and litigation cases in Wake and surrounding counties.