"Alternative dispute resolution," commonly referred to as "ADR," refers to a variety of methods for resolving disputes between parties without traditional legal representation or lawsuits. Instead, ADR involves a third party, a neutral individual, who works with both parties to the dispute to resolve their differences.

ADR is conducted in a manner that is more businesslike and less adversarial than a traditional lawsuit. Each party tells their side of the story to the third party in a setting that's usually less formal than a court proceeding.

Saving Time and Money

As an alternative to traditional litigation, many forms of ADR have the potential to save both parties significant time and money:

• ADR has the ability to start the process of working out disagreements and differences without waiting for the often-overburdened civil courts to hear the case
• Unlike court trials, dispute resolution methods can reduce or eliminate the need for costly "discovery" where each party's counsel tries to gain information held by the other party

Common Methods of ADR

Arbitration is a kind of "private trial" and requires both parties to submit the dispute to one or more impartial persons, with the goal of a final and binding decision.

The arbitrator(s) may be attorneys or business professionals with expertise in the field. They decide the issues to be resolved, the possible awards, and what the process will be. Unlike a court hearing, arbitration can be less formal. Decisions reached by the arbitrators are usually final and not reviewed further by the courts.

Mediation involves a neutral person helping two or more parties to reach a voluntary settlement. The mediator's role is to advise the parties and offer suggestions on how to resolve the differences. Both parties involved have an active role and ultimately decide the final outcome of the dispute with the assistance of the mediator.

Privacy

Arbitration, mediation, and other forms of ADR are not processes open to the public, unlike court disputes. The hearings and awards are completely private and confidential and are not disclosed.

Who Uses ADR?

Virtually every type of dispute that can be resolved through a lawsuit can also employ alternative dispute resolution methods. Disputes involving business, insurance, labor relations, environment, public policy, divorce, securities, technology, employment and international trade have been resolved through mediation or arbitration.

ADR Agreements

Before using ADR to resolve a dispute, the parties should agree on the procedures to be followed such as:

• Timing
• The extent of recovery allowed
• Confidentiality
• Cost sharing
• Selection of neutral third party participants

Business contracts often include provisions on how disputes are to be resolved. So, if your dispute involves a contract, check the contract to see if you have already agreed to arbitrate disputes instead of going to court.

ADR Resources

Listed below are several alternative dispute resolution resources which are available to guide you in deciding the best route for your particular circumstance.

American Arbitration Association
1633 Broadway, 10th Floor
New York, New York 10019
Toll Free: 1-800-778-7879
Web site: www.adr.org

International Institute for CPR
575 Lexington Avenue, 21st Floor
New York, NY 10022
Phone: 212/949-6490
Phone:212/949-6490
Fax:212/949-8859
Web site: www.cpradr.org

American Bar Association Section on Dispute Resolution
740 15th Street, N.W.
Washington, DC 20005
Phone:202/662-1680
Fax:202/662-1683
Web site: www.abanet.org/dispute/home.html

If you have legal questions about arbitration, contact a small business lawyer in your area.

Questions for Your Attorney

• If my dispute goes to arbitration and the arbitrators make a decision that I really disagree with, can I file a civil lawsuit in court on the same matter?
• Can I get an arbitrator disqualified from hearing my dispute if I find out that he has a conflict of interest?
• If the dispute involves two different states, can the parties agree to which state's laws will apply in arbitration?

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