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What are the benefits of ADR versus litigation?


For centuries, the standard avenue for resolving a civil dispute has been to file a lawsuit in the public court system. Even lawyers, however, realize that lawsuits are not always the most practical method for reaching a settlement. Alternative dispute resolution (ADR), sometimes called arbitration or mediation, is a widely accepted alternative to civil actions in public courts.

Arbitration and mediation factor into the resolution of thousands of disputes in the United States every day. Sports fans may be familiar with the concept of arbitration as a means of settling salary disputes between star players and their teams. Mediators and arbitrators are often brought in to handle negotiations between unions and large employers or industry groups.

Alternative dispute resolution can be employed in the negotiation of any type of settlement between two or more opposing parties, however. ADR offers a number of important advantages over traditional litigation.

Conventional litigation is notoriously subject to a litany of paperwork-heavy procedural requirements. These requirements consume a great deal of time and resources, all of which are usually billed at typical hourly law firm rates.

A litigated civil dispute can take months or even years to work its way through the court system, draining both disputing parties of resources while each waits for a settlement in his or her favor. ADR strips dispute resolution of this procedural overhead, dramatically reducing manpower needs and commensurately reducing the cost of the dispute resolution process to all parties.

The court system subjects participants to a great deal of chance. There is no way to ascertain or control which judge will preside over one’s case, and cases that require jury selection introduce additional human elements whose education, expertise, and other background factors are largely unknown.

Alternative dispute resolution effectively sidesteps most or all of the institutional uncertainty that attends litigation.

The parties to an ADR case have nearly unlimited freedom to select their own arbitrators or mediators. That gives everyone with a stake in the case an opportunity to ensure that the people empowered to resolve the dispute have the experience and subject matter proficiency to make an informed and equitable decision.

Similarly, the arbitrators’ decision-making process is open to active participation by the disputing parties. If the parties are willing to cooperate under the arbitrators’ guidance, a settlement agreement can be drafted with the mutual participation of all opposing sides.

An additional reason to select ADR over litigation is that it offers the parties to a dispute an opportunity to avoid the courtroom itself. No matter the nature of the dispute, a courtroom and its attendant formal settings are an inherently adversarial forum for negotiation between parties. Relatively small differences between opposing positions can take on exaggerated importance once those positions have taken up the plaintiff’s and defendant’s sides of a courtroom. Too often, one or both sides become willing to spend a disproportionate amount of time and effort seeking the other’s concession on incremental disagreements over matters such as monetary compensation. The ADR format, on the other hand, facilitates more amiable settlements.

The potential for increased antagonism isn’t the only risk posed by the courtroom. Except in unusual circumstances, all civil court proceedings and their associated legal filings are matters of public record. As such, they have the potential to appear in background checks, media reports, and other avenues that can expose personal affairs to the public.

Provided all parties to the dispute agree to participation in the ADR process, the decisions reached through that process are virtually always legally binding. With few exceptions, a decades-old federal law prevents courts from overturning or otherwise interfering with settlements that have been negotiated through ADR.

If your client is considering a lawsuit, discuss the option of ADR services, as well. That option may better serve all concerned.