Arbitration, ADR Alternate Dispute Resolution (ADR) Frequently Asked Questions

The following are frequently asked questions with answers about alternative dispute resolution, which includes arbitration, mediation and conciliation.

What does the term "alternative dispute resolution" mean?

Alternative dispute resolution (commonly abbreviated as "ADR") means the use of a different or alternative method to resolve a conflict than a lawsuit that will be litigated in a courtroom. Alternative methods to a lawsuit include mediation, arbitration, and other tribunals or hearings that involve a neutral third party who assists in the process of resolution of the matter.

What are the three most common forms of ADR?

Alternatives to having a formal trial include negotiation, mediation, and arbitration. These three common forms are favored because the process can be significantly less costly, involved, and less traumatic than the traditional trial form of litigation. It is often a more relaxed and informal process than in court and consumes far less time to resolution.

What is involved in mediation?

The steps in mediation begin with all parties being informed that a controversy exists and that the parties will begin to negotiate privately. If private negotiation fails, the next step is to meet with a mediator who assists the parties towards potentially reaching a settlement. The mediator will help all parties involved to identify, clarify and discuss the controversy, as well is determining the relevant and primary facts involved. The mediator will also help the parties try to find potential compromises and solutions to help them reach an agreement. Sometimes mediation can be a precursor to arbitration or a lawsuit.

What about arbitration?

An attempt to solve a controversy can involve an arbitrator, a person who may be a lawyer or other professional that is appointed in a position to act in a similar manner as a judge. Parties to a contract may often choose to an arbitration process because, like mediation, the rules are relaxed and issues such as technical defects in a case may not be considered fatal for the purpose of resolving the dispute.

How is arbitration, mediation, or a lawsuit started?

Many contracts will include a provision which states that the parties agree to use mediation and/or arbitration in the event that a dispute arises. In addition, the clause may specify who the arbitrator may be and the location where the hearing may be arbitrated. Low cost online communications technologies available to all, such as Zoom, Microsoft Teams and other video communications, make the locale less important in the present day.

Some circumstances may dictate that arbitration or mediation may be an optimal course of dispute resolution. For example, divorce and child custody cases can be particularly emotionally challenging. Proceedings in court may not only increase the level of conflict between parents but also result in prohibitive additional cost. The mediation process, which is handled by a professional who can appreciate the element of human nature and conflict, encourages cooperation and communication and may lead to reduced hostility, mutual progress, and help make a co-parenting solution more palatable to the parties.

Arbitration, mediation, or lawsuits are often commenced when an attorney for an aggrieved party presents a demand letter to the opposing party which informs them that there is a controversy to be addressed resulting from a harm suffered and caused by the opposing party. If the controversy does not arise out of a contract or joint agreement to arbitrate, the option to arbitrate may arise after a demand letter is sent which threatens a lawsuit, and results in a compromise in the process to arbitrate.

What happens if informal negotiation fails to resolve the controversy?

If there is a failure to resolve the controversy by informal negotiation, there is usually an invitation to participate in arbitration or mediation. Each party can decide if they want to participate in this manner to achieve their goal. When both parties agree to arbitration or mediation the process will commence.

Where do you find mediators or arbitrators and must they be licensed?

Referrals to arbitrators and meditators can often be obtained from state bar associations. Amont the most well-known are the American Arbitration Association, National Academic for Distinguished Neutrals, and the JAMS Foundation. While no national licensing requirements exist specifically for arbitrators or mediators, some states or organizations may require arbitrators to become certified or have specific qualifications for certain types of cases or to join their rosters.

Is mediation or arbitration always the best way to handle a controversy?

Whether mediation or arbitration is suitable for a particular conflict depends upon the facts, circumstances, and priorities of the parties. The mediation or arbitration process can sometimes be more complicated and provide less predictable results than traditional litigation.

Who pays for ADR?

The parties involved pay for alternative dispute resolution forums. Traditional litigation in court is primarily provided by federal and state government funding.

How are civil lawsuits different from criminal cases and arbitration?

Criminal cases differ significantly from civil lawsuits. A criminal case can only be brought by a government prosecutor, who represents the people. The prosecutor (such as a District Attorney) decides within their discretion whether sufficient evidence exists to bring a criminal case that would likely meet or exceed the burden of proof required to successfully convict a criminal defendant.

A civil lawsuit on the other hand involves one party suing another party over a non-criminal matter and can commence litigation in a court of law at will, provided it meets the judicial requirements. For example, in some courts the amount in controversy must be below or exceed a certain dollar amount, primarily concern an issue covering a specific legal issue (such as bankruptcy, taxes, or other specific legal topic) and the location or jurisdictional requirements of the court.

An ADR is different than a lawsuit because the process typically involves agreement by both parties to use ADR and the arbitrator or mediator who helps the parties find an agreement to their dispute.

What factors are useful whether to file a case in court or use ADR?

There is no absolute answer to the question of whether litigation or ADR are preferable. The specific facts of a dispute as well as the characteristics of the parties will help provide perspective that may lead to the most appropriate answer. An experienced attorney can assist if there is a choice that can be made and will often revolve around the following factors:

• Whether a contract or agreement specifies ADR must be used
• The nature of the dispute
• The availability of evidence
• The relative strength or weakness in your case and of the opposing party
• The resources of both parties
• Which court is available to file suit
• Whether any court precedent may benefit your case
• The length of time it will take if you go to trial
• Who your adversary is
• Who the attorney is for your adversary

It is not uncommon for parties to reach settlement out of court, and most disputes are resolved in this manner. Since the COVID-19 pandemic, many US courts have been highly congested and backlogged. As a result, settlement and ADR are often highly recommended.