Alternative Dispute Resolution (ADR)

Alternative dispute resolution (ADR) is a blanket term that refers to a number of different procedures for settling disputes that do not rely on litigated judgments. The hallmark of ADR is that all parties voluntarily accept a third party who assists with the process and/or the substance of the dispute.

The court system is designed to resolve serious disputes. Trained lawyers use an adversarial approach to make their case before a judge and jury. The hearings are formal in that there are strict rules about acceptable evidence and procedure. There is usually a public record of a case, and rulings may serve to set policy or precedent. Litigation is often expensive, time consuming, and leads to judgments where a win for one side represents a loss for the other. Court cases are particularly effective when there is a need for a clear ruling on a particular matter or when they involve distributing resources between rival claimants. However, the vast majority of disputes in America are resolved outside the courts. Sometimes this is because settlement talks produce agreement prior to the case being heard. Many cases are resolved by various means of ADR. The incentives for moving to ADR may include the potential for a resolution that is less expensive, less time consuming, more predictable, or one that may be customized to the particular details of the conflict. ADR is appropriate in cases where there is a continuing relationship between the parties, and the issues are not limited to allocation. Thus, a violation of worker safety [Page 67]standards or establishing a payout of assets after a bankruptcy may benefit from formal adjudication, whereas ADR is useful in cases such as contract negotiations or settling a dispute between neighbors.

ADR encompasses a number of processes that range from the parties framing their own settlements to private systems that echo what goes on in court. The kinds of ADR are quite flexible and may be adapted as the parties see fit. They include arbitration, mediation, hybrid mediation/arbitration, early neutral evaluation, minitrials, and summary jury trials. Parties may choose to engage in ADR instead of going to court or may undertake it concurrently with regular court procedures, so that they have the default of litigating if ADR is unsuccessful.

The two most common forms of ADR are arbitration and mediation. Arbitration involves a neutral party who hears evidence and decides on an outcome that is then imposed on the parties. Essentially, it is a form of private judgment that echoes the court system except that it has more relaxed rules on procedure and evidence and takes place in an informal setting. In contrast, a mediator is more of a negotiation expert who assists the parties to come to a settlement of their own. Legal precedent and findings of right and wrong take a minor role in mediation because the mediator's job is to help the parties find an outcome that satisfies their interests to the greatest extent possible. Some institutions have integrated internal ADR functions into the office of the ombudsperson.

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