What is ADR, and its advantages and disadvantages?

3 mn read

When disputes can’t get settled between the parties, they go for ADR or courtroom litigation. Many people often neglect ADR, as they don’t know what ADR is and its advantages.

People often opt for courtroom litigation despite the long, time taking, and expensive process. ADR tends to be a better option for people who seek the resolution in a quick time.

Here we will focus on ADR and why one should or shouldn’t opt for the ADR method.

What is ADR?

ADR (alternative dispute resolution), a means to settle disputes or conflict, does not involve courtroom litigation. In the United States, parties involved in the debate have the freedom to choose for ADR.

In some instances, when the lawsuit gets pending, courts encourage the litigants to use ADR and settle the disputes. Click here to know more about what is ADR.

Types of Disputes that can get Resolved through ADR

A wide range of civil disputes involving individuals and organizations can get resolved through ADR. The arguments may apply to disputes belonging to :

  • Family Law Disputes:

Disputes related to child custody, divorce, child support, and visitation order modification can get resolved through ADR.

  • Neighbor and housing Disputes:

Frequent noise ordinance violations and issues with the owner can get resolved through ADR.

  • Workplace Disputes: 

ADR helps resolve issues of the workplace, including wage, hour dispute, and workplace harassment.

  • Business Disputes:

Through ADR, contract disputes and business debt also get resolved.

  • Personal Injury Disputes:

Compensation claims in case of medical malpractice cases and motor vehicle collision cases often get resolved through ADR.

  • Consumer Contract Disputes: 

alternative dispute resolution helps to resolve product liability and warranty claims.

  • Environmental Disputes:

Toxic waste dumping and air pollution can get included in environmental disputes.

Types of ADR:

Some of the common types of ADR include:

  • Negotiation

It’s the simplest ADR method to resolve disputes. In this type of resolution, the parties meet, explore options, and find a standard solution. No neutral third party participates in the negotiation.

  • Mediation

In mediation, an impartial person (mediator) hears the stories of both parties and helps them find a solution. The mediator has no control over the outcome.

  • Arbitration

A neutral person(the arbitrator) listens to the argument from both parties and decides the outcome.

  • Binding arbitration: the arbitrator’s decision is the final decision of the dispute.
  • Nonbinding arbitration: In case of disagreement with the arbitrator’s decision, either party can seek a court trial.

Though arbitration and mediation seem to have the same process, yet they have some differences.

The main difference between arbitration and mediation is that- mediation does not require evidence, but arbitration does. Arbitration involves more cost than mediation. Check out more about the difference between arbitration and mediation.

  • Neutral Evaluation

The evaluator, an authority on the topic of the dispute, provides different options to resolve the conflict.

  • Settlement Conferences

In this type of ADR, the disagreeing party with their lawyers meet the neutral third person (the settlement officer) and discuss the settlement options.

The settlement officer helps both parties evaluate and negotiate the settlement.

Settlement conferences get chosen by the disagreeing party or mandated by the court before trial.

Advantages of ADR:

  • Control over outcome

In ADR, parties have some control over the resolution of disputes. In mediation, both parties have some control in negotiating the outcomes. The case is the opposite trial process. Through mediation, both parties get a flexible settlement.

  • Time-saving

The litigation process may take months or years to resolve the dispute. But through mediation and other ADR forms, the conflicts get resolved quickly.

  • Cost-effective

The cost in ADR mostly gets far less expensive than litigation. In ADR, both the parties agree and settle, so it involves less cost.

  • Flexibility

Both the parties involved in the dispute have flexibility in choosing what rules to apply in the resolution.

  • Confidentiality

In ADR, the parties have the option to keep the activity private.

  • Preserve Relationship

The parties involved in the dispute settle for their choice. So, in ADR, it’s less likely for parties to bitter their relationship.

Disadvantage of ADR

  • Good for financial Disputes

The forms of alternative dispute resolution get best for financial disputes. Disputes of emotional differences and criminal cases cannot get resolved through ADR.

  • No Guarantee of Resolution

ADR doesn’t need to resolve the dispute. There’re chances when either of the party may not get ready for the settlement.

  • Less chance of modification

In binding arbitration, the parties get bound to follow the decision of the arbitrator. The parties cannot appeal for the decision.

Summary:

Though, the importance of the court in decision-making can’t get overlooked. But, knowing the benefits of ADR and what ADR is, one can save time and money instead of going for litigation. ADR involves the process of resolving civil disputes without going to the courtroom.

The different forms of ADR mentioned above have some similarities, but there’re many differences as well. The process used in ADR helps parties chooses the ADR type for their situation. Though ADR comes with certain disadvantages, its advantages are enough to resolve a dispute.

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