Everything You Need to Know About ADR

With a justice system that cannot accommodate all legal matters placed before it, parties with legal disputes are often encouraged to enter the dispute resolution process. It runs parallel with the court system but presents a quicker, easier way of settling certain matters that would otherwise take up the court’s valuable time.

Alternative dispute resolution (ADR) has become popular among litigants seeking to resolve legal matters without resorting to presenting a case before a judge and jury. You can hire a mediator or an arbitrator who will be ready to help resolve your dispute. Whether you decide to take up the matter on your own and try to strike a deal with the other party or you hire a professional, knowing and understanding how ADR works is important. A good understanding of ADR terminology helps you immensely in achieving your goals. Here are the key pointers that will explain to you how ADR works.

What is ADR?

As mentioned before, ADR is a way of bringing a legal conflict to an end with a resolution that both parties agree to without needing to involve the formal judicial system. It is gaining popularity in particular legal fields, especially family and insurance law. That notwithstanding, ADR can be applied in several other areas, including municipal law violations, housing disputes, and employee-employer conflicts.

ADR has been gaining popularity because it is a speedy, inexpensive mechanism that allows parties to come to a resolution that might be less conventional and more creative than what a court would rule. As the parties engage on a far less formal platform, more understanding of each other’s views is possible, allowing them to make mutually beneficial concessions or compromises.

There are three primary types of ADR

Conciliation, mediation, and arbitration. What follows is a brief explanation of each:

Conciliation

This ADR process is often referred to as facilitation, and the two terms may be used interchangeably. A conciliator is a professional third party who facilitates talks between the parties to achieve a settlement both accept. Having agreed to conciliation, the judicial system appoints a conciliator to discuss relevant issues with each party. They aim to ensure each sees the other’s point of view and will negotiate a successful outcome. Conciliation is popular in settling employment law disputes.

Conciliation is a voluntary process, and a client does not have to submit to it if they do not feel it is in their best interests. However, many attorneys encourage their clients to utilize conciliation as a dispute resolution mechanism. The conciliator weighs each party’s claim and steers them in the direction of a resolution. They may even recommend a fair outcome for both parties to consider. The resolution reached during conciliation is not legally binding until both parties agree to it and have it reduced into a written settlement agreement that they both sign.

Mediation

The mediation setup is similar to that utilized during conciliation. It is popular for contract disputes, divorce and custody matters, and personal injury claims. A mediator is a professional third party with no stake in the case’s outcome, making an objective assessment of each party’s case and its relative merits. A mediator has no decision-making authority and cannot impose any decision unless both parties agree to it.

A mediator listens to both sides of the argument and pinpoints the significant issues arising from a claim. From there, mediators assist parties to find common ground and start thinking about mutually beneficial solutions. This is an example of ADR at its finest: when parties begin seeing each other’s points of view and start collaborating on a potential resolution instead of adopting an adversarial approach.

A mediator does not suggest potential solutions, preferring instead to allow parties to come up with them. Afterward, a written agreement is produced and signed by both parties. The matter is then regarded as resolved.

Arbitration

Arbitration is often the ADR choice for larger claims, such as class actions against companies. These cases involve multiple plaintiffs, multinational corporations, and millions of dollars of potential compensation. Arbitration is an excellent alternative to litigation, which could drag on for years and cost a small fortune in legal fees.

Corporations tend to choose arbitration when they know there is a significant chance that they will be held liable but wish to minimize the damages paid. When such cases go before juries, they tend to rule in favor of the David who is facing Goliath, and often hand out crippling punitive damages amounts.

When entering an arbitration process, both parties waive their rights to a trial, undertake to accept the arbitrator’s decision and understand that an appeal is unlikely to succeed. In many agreements with banks, insurance companies, and other corporations, clients must often agree to arbitration for any disputes arising from their contract. Most arbitrations are binding, meaning that the outcome bears the same weight as a court ruling.

Legal representation

While clients do not necessarily require legal representation during ADR processes, experts advise them to seek it. A lawyer will pick up on an attempt to stonewall a claim or force a client to accept something less than they are owed. With their ADR and legal training, attorneys are better placed to gather evidence and present a client’s case cogently using the necessary terminology and legal principles.