Alternative Dispute Resolution

Alternative dispute resolution (ADR), as the name implies, is an alternative to resorting to litigation to resolve a legal dispute between parties. The most common forms of ADR are mediation and arbitration.

Since ADR is an alternative to litigation, disputing parties do not have to begin a lawsuit prior to using any form of ADR. Also, filling a lawsuit does not preclude the use of ADR in conjunction with the litigation. Some courts, such a family court, often encourage or require parties to undertake some form of ADR prior to moving forward with litigation.

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Transcript

Advantages of ADR

The effective use of ADR offers several distinct advantages:

· costs—ADR may reduce the costs associated with litigation for the disputing parties. This is probably the most common reason for including an ADR clause in a contract or agreeing separately to submit a dispute to ADR.

· no jury—Businesses generally prefer ADR to litigation because it avoids allowing a jury to decide a dispute. ADR, unlike a jury trial, generally involves the use of one or more knowledgeable professionals to either decide or assist in resolving the dispute. This is far more practical than letting a random group of jurors resolve the issue.

· privacy—Another reason to use ADR is that it is a private process; whereas, litigation and court records are open to the public. Individuals concerned with public knowledge of the dispute harming the company’s brand or reputation strongly prefer the use of ADR to resolve disputes.

· business relationship—ADR can preserve the ongoing business relationship between the parties, where litigation often destroys the relationship.

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