Q: How does alternative dispute resolution work?

-Leery of litigation

A: Dear Leery:

Alternative dispute resolution (ADR) is a process of settling disputes without resorting to litigation. ADR can be used in disputes of all kinds: employer/employee, business/consumer, and business/business. In some cases, courts require parties to use ADR before the matter can be brought to trial.

The two most common types of ADR are arbitration and mediation. During arbitration, an impartial third party hears each side of the dispute and makes a decision that the parties agree to abide by. Mediation is less adversarial, with the impartial third-party working together with the parties to come to a mutually agreeable solution.  

ADR has several advantages over litigation. For one, it’s typically much cheaper and faster than trial. ADR proceedings also allow the parties much greater participation in the resolution and provide more control over the outcome. Additionally, ADR is often far more flexible, allowing the parties to come up with more creative solutions than a court would be legally allowed to impose.

Most ADR processes do not require you to have an attorney represent you, though many people hire attorneys to serve as counselors and/or advocates in ADR proceedings.

Consult with a Family Business Lawyer® to see if ADR is an appropriate solution to your company’s dispute.