What is Alternative Dispute Resolution?
When you are engaged in a dispute that cannot be resolved cooperatively, litigation may be an option, but it will often be an expensive one. Under rules established for civil actions, there are specific time frames for many of the steps in the process. In addition, because of the sheer number of lawsuits in the courts, you will likely wait months or even years before your case reaches trial. In the interim, you may spend vast sums of money gathering and evaluating the evidence in the case. Because of the costs-time, expense and emotions—of litigation, a number of other methods have developed for resolving civil disputes. These processes are collectively known as alternative dispute resolution.
Technically, alternative dispute resolution refers to any means of resolving a dispute without going to trial. The most common forms of alternative dispute resolution (ADR) are arbitration and mediation. In recent years, a number of states have experimented with or implemented what is known as the collaborative approach to dispute resolution.
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Arbitration is a version of a trial involving no discovery and simplified rules of evidence. Either both sides agree on an arbitrator or each side selects an arbitrator and the two arbitrators elect the third to comprise a panel. Arbitration hearings usually last only a few hours, and the opinions are not public record. Arbitration has long been used in labor, construction and securities regulation but is now gaining popularity in other business disputes.
Title 9 of the U.S. Code establishes federal law supporting arbitration. There are, however, numerous state laws on alternative dispute resolution. Forty-nine states have adopted the 1956 version of the Uniform Arbitration Act as state law. The act was revised in 2000 and subsequently adopted by 12 states. Thus, the arbitration agreement and decision of the arbiter may be enforceable under state and federal law.
Mediation is an even less formal alternative to litigation. Mediators work exclusively as third party neutral facilitators, trying to bring opposing parties together to attempt to work out an agreement. Mediation is used for cases as diverse as divorce and family law disputes and federal government negotiations with Native American tribes. Mediation also has become a method for resolving disputes between investors and stock brokers.
In the collaborative process, the parties each retain their own counsel, but agree at the beginning of the process to work with each other (and with their attorneys) to resolve all matters without the intervention of the courts. Frequently, the parties to a collaborative approach will agree on third party experts (family counselors or financial planners in divorce cases, for example), and will defer to the judgment of those experts with respect to some of the issues involved. If, for any reason, the parties cannot resolve all matters without court intervention, they must retain new counsel to represent them in any proceedings before a judge and jury.
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