What is Alternative Dispute Resolution?
Alternative dispute resolution, or ADR, is any method for resolving disputes other than litigation. Although one can petition a public court to review the validity of ADR procedures, courts are generally unwilling to reverse a decision reached through ADR where the disputing parties agreed to be bound by the results. Common forms of ADR include arbitration, mediation and negotiation (collaborative practice). Usually, parties will attempt to negotiate a mutually agreeable resolution before advancing to other methods.
Collaborative Practice – Negotiating Your Resolution
Businesses have gravitated toward the collaborative approach for many reasons, mainly because it enables the parties to retain a great deal of control over the dispute resolution process.
Parties begin the process by hiring lawyers with collaborative practice experience. A good collaborative practice lawyer will be committed to helping their clients reach an optimal settlement from the outset. In the event a settlement is not achieved, a lawyer can help you withdraw from the process and pursue an alternative method of dispute resolution.
The parties take the lead during negotiation sessions. Depending on the nature of the dispute, it may be to a party’s advantage to hire additional specialists to resolve their case, including accountants or financial consultants.
The Arbitration Process
Arbitration is an informal, simplified version of a trial. An impartial third party, called an arbitrator, hears each side’s arguments and then issues a decision or arbitral award. When there is more than one arbitrator, this is referred to as an arbitral panel. Panels are generally comprised of one individual chosen by each party to the dispute, and a third member who has been mutually selected by either the parties themselves or their arbitrators.
Hearings usually last between a few days to a week. Parties can agree in advance whether the decision will be binding or non-binding. Arbitral opinions are closed to the public.
Advantages of Arbitration
Arbitration may be a more efficient way to resolve disputes than using the traditional legal system. Specific advantages include:
- Less hostile than litigation. Unlike in litigation, where a judge is the ultimate decision maker, in arbitration, parties are encouraged to formulate a resolution.
- Less expensive than litigation. Although arbitration is considered cheaper than going to court, it is becoming more expensive. Experienced arbitrators may charge $3,000 to $4,000 per day for their services. At McOmber & McOmber, P.C., we provide cost effective representation in arbitration matters, seeking to streamline the process as much as possible.
- Quicker than litigation. This can reduce costs significantly.
- A more flexible schedule. During litigation, your case must be scheduled around the (often overbooked) calendar of a judge. Arbitration hearings can be held on evenings, weekends or whatever else is convenient and can be mutually agreed upon by the parties.
- Streamlined discovery. Discovery, the collecting of evidence through interrogatories, depositions and requests to produce documents can draw out a court case. Arbitration eliminates the discovery process.
- Privacy. When you go to court, records of your litigation will usually become a public record. Hearings are open to the public and can be attended by the press. Arbitration is usually held in private and the resolution is kept confidential. This is particularly desirable if the dispute is bad for business.