Alternative Dispute Resolution - Answers✔The resolution of legal disputes through methods
other than litigation, such as negotiation, mediation, arbitration, summary jury trials, minitrials,
neutral case evaluations, and private trials.
Organizations often use ADR to resolve disputes involving contracts, insurance, labor, the
environment, securities, technology, and international trade.
Why might a business prefer to resolve a dispute through Alternative Dispute Resolution (ADR)
rather than litigation? - Answers✔First, ADR methods are generally faster and
cheaper than litigation. Accordingly, the National Arbitration Forum, the average time from
filing a complaint to receiving judgment through litigation is 25 months.
Because ADR is faster, it is usually cheaper.
Secondly, a business may wish to avoid the uncertainty associated with a jury decision.
Third, a business may wish to avoid setting a precedent through a court decision. Many business
prefer ADR because of its confidential nature.
Fourth, because many forms of ADR are less adversarial than litigation, the parties are able to
preserve a business relationship.
Negotiation - Answers✔A bargaining process in which disputing parties interact informally,
either with or without lawyers, to attempt to resolve their dispute.
A neutral third party, such as a judge or jury, is not involved.
To reach a successful settlement, each part must give up something in exchange for getting
something from the other side.
Mediation - Answers✔An extension of negotiation is mediation.
The disputing parties select a neutral party to help facilitate communication and suggest ways for
the parties to solve their dispute.
Advantages of mediation: - Answers✔-Helps disputing parties preserve their
relationships
-Potential for creative solutions
-Parties to mediation have a high level of
autonomy
-Less costly, less time-consuming, less
complicated
Disadvantages of mediation: - Answers✔-informal process improperly creates an image of
equality between the parties.
-We improperly assume that the resulting
agreement between the parties is also equal.
-Some people may abuse the mediation process in
an attempt to simply draw out the dispute.
Arbitration - Answers✔One of the most frequently used method of dispute resolution.
It's the resolution of a dispute by a neutral third party outside the judicial setting.
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