How Does Alternative Dispute Resolution (ADR) Work?

These are the two most popular forms of alternative dispute resolution (ADR).

Mediation:

A neutral third party is appointed to help reach a mutually acceptable agreement. The mediator does not decide who is right but instead helps to create structure in communication between disputing parties, so they can hopefully get a solution.

Circumstances Where Mediation May Be Appropriate

Mediation can be beneficial for parties who want to maintain a close relationship. It is a good option for those who conflict with their family, friends, or business partners. Mediation can also help if emotions are interfering with the resolution. Mediators can effectively listen to both sides and help them communicate effectively. 

Circumstances Where Mediation May Not Be Appropriate

Mediation can be ineffective if one party is unwilling to compromise or cooperate. It may also not work if one party has a significant advantage over the other. Mediation may not be the best option if there is a history of victimization or abuse.

Arbitration:

An arbitrator is an impartial party who listens and gathers evidence to decide the outcome of a dispute. The arbitration may be binding or not. If it is binding, the decision is final and binding. If not, it signifies that the arbitrator’s rulings are advisory and will only be binding if both parties agree.

Circumstances Where Arbitration May Be Appropriate

Online arbitration works best in cases where the parties do not want a judge to rule on their case but still wish to avoid the expense, formality, and time of a trial. The arbitration may be appropriate in complex circumstances where the parties need a decision-maker with training and experience in the area of the dispute.

Circumstances Where Arbitration May Not Be Appropriate

Arbitration, especially binding arbitration, cannot be used if the parties wish to retain control of how their dispute is settled. The arbitrator’s decision in binding arbitration is final and binding. There may be penalties for a party who requests a trial but does not receive a favorable outcome at trial.

Neutral Evaluation

Each party has the opportunity to present their case to an impartial person, called an “evaluator.” The neutral evaluator will then give an opinion about the strengths and weaknesses of the evidence and arguments presented by each party and suggest ways to resolve the dispute. The evaluator can often be considered an expert on the topic of the conflict. An evaluator’s opinion is not binding, but the parties often use it to try and resolve the dispute.

Circumstances Where Neutral Evaluation May Be Appropriate

A neutral evaluation is most appropriate when there are technical difficulties that need a specialist to resolve, or where the only concern in the case involves the number of damages.

Circumstances Where Neutral Evaluation May Not Be Appropriate

A neutral evaluation may not apply when there are significantly emotional and personal barriers to the resolution of the dispute.

Settlement Conferences

The parties to a settlement conference are accompanied by their lawyers and a neutral person. This impartial person can either be a judge or a settle officer. They discuss the options for settlement. The judge or settlement agent doesn’t make the final decision. Still, they can help the parties assess the case and negotiate settlements. The settlement conference can be chosen by the parties involved in the dispute or mandated by a judge before a trial.