Solving a business dispute can be a long and frustrating process. Though there are a number of benefits that come with using litigation as a surefire method of solving your disagreement, it isn’t always the best way to solve an argument. Litigation can be quite costly and time-consuming. For those dealing with minor (yet seemingly unsolvable) disputes, or for those without large sources of money, reconciliation may be more easily reached through alternative dispute resolution (ADR).
ADR is typically considered to be a cheaper and quicker process than litigation. Most of the time, the involved parties are granted confidentiality, as well. And, in general, the decisions reached during the alternative dispute resolution process are legally binding.
In general, there are two main forms of alternative dispute resolution: mediation and arbitration. While other options, such as collaborative law and conciliation, are available, they are used with much less frequency. The process of negotiation is another available option, but as there is no third party involvement, as with the other choices.
The process of mediation involves three different parties – the two engaged in the dispute, as well as an outside person who serves to facilitate discussion and keep tensions from rising. During this process, these three representatives sit down outside of a courtroom setting in order to discuss their disagreements and attempt to reach a resolution together, without using litigation.
The third party, also known as a mediator, does not hold any bearing in the outcome of the ADR process. This person serves the sole purpose of helping the two disputing parties communicate effectively and come to a solution. It is up to them to reach a fair agreement.
The process of arbitration is similar to mediation, although it has a couple of significant differences. As with mediation, the disputing parties sit down, outside of the courtroom, with an outside third party – this time known as the arbitrator. The arbitrator listens to both parties’ stories, takes the time to examine the situation in detail, and determines a fair (and legally binding) outcome. Both parties enter the arbitration process knowing that they will not determine the resolution, and they agree to accept whatever the arbitrator decides.